Innovation leadership. Is it time for a European DARPA?

Research Paper (undergraduate), 2020

20 Pages, Grade: 1,3


Table of contents

List of abbreviations

List of figures

Referencing details

1 Intro
1.1 What is innovation leadership?
1.2 Working definition

2 Current situation
2.1 Germany
2.1.1 Agency for Disruptive Innovation in Cybersecurity (ADIC)
2.1.2 Agency for Leapfrog-innovations (SprinD)
2.1.3 Cyber Innovation Hub (CIH)
2.1.4 CODE.
2.2 Europe
2.2.1 Joint European Disruptive Initiative (JEDI)
2.2.2 EU institutions and initiatives European Innovation Council (EIC) European Research Council (ERC) Research Executive Agency (REA) European Defence Fund (EDF)

3 Possible solution
3.1 Outcomes
3.2 Concept, implementation, oversight
3.2.1 Concept
3.2.2 Implementation
3.2.3 Oversight

4 Conclusion


List of abbreviations

Acatech Deutsche Akademie für Technikwissenschaften

ADIC Agency for Disruptive Innovation in Cybersecurity

AI Artificial Intelligence

ARPA Advanced Research Projects Agency

a.o. amongst others

BMBF Bundesministerium für Bildung und Forschung (German Federal Ministry of Education and Research)

BMI Bundesministerium des Innern (German Federal Ministry of the Interior)

BMVg Bundesministerium der Verteidigung (German Federal Ministry of Defence)

BMWi Bundesministerium für Wirtschaft und Energie (German Federal Ministry for Economic Affairs and Energy)

BRH Bundesrechnungshof (German Federal Court of Auditors)

CIH Cyber Innovation Hub (German Federal Armed Forces)

CODE Forschungsinstitut für Cyber Defence

CSDP Common Security and Defence Policy

DARPA Defense Advanced Research Projects Agency

DAX Deutscher Aktienindex (German Prime Standard)

DIU Digital Innovation Unit

DoD Department of Defense (USA)

DPMA Deutsches Patent- und Markenamt (German Patent Office)

e.g. exempli gratia (for example)

EARPA European Advanced Research Projects Agency

EC European Commission

EDF European Defence Fund

EIC European Innovation Council

ERC European Research Council

EU European Union

GCR Global Competitiveness Report

GII Global Innovation Index

GPS Global Positioning System

IIA Israeli Innovation Authority

JEDI Joint European Disruptive Initiative

REA Research Executive Agency

SIPRI Stockholm International Peace Research Institute

SprinD Agentur für Sprunginnovationen in Deutschland

UniBw Universität der Bundeswehr München (University of the German Armed Forces in Munich)

USA United States of America

WEF World Economic Forum

List of figures

Figure 1 - EARPA concept

Referencing details

This document is written in reference to the APA style, regarding citations. The basis for this style was taken from the document ‘A quick Hertie School Library guide for EMPA students’, provided by Hertie School in September 2019 (Hertie School, 2019, pp. 19).

For several definitions and content, Wikipedia is used. This procedure is based on articles by Becher and Becher as well as Rodman (Becher, Becher, 2011, pp. 116; Rodman, 2015, pp. 1).

1 Intro

When looking at innovation capabilities1, Germany is amongst the front-runners in the world, according to different sources and studies. Also, many European countries are ranked in the top tier when it comes to innovation and competitiveness.2 Still, major players and business models in digital innovation and transformation seem to come from the United States (Hanselka et al., 2020, URL; Wikipedia – Global Innovation Index, 2020, URL; Global Innovation Index, 2019, URL; DPMA, 2019, URL; Whiting, 2018, URL; Suhr, 2019, URL; Schwab, 2018, URL; Schwab, 2019, URL).

The topic at hand is whether Europe can become a world leader in innovation and digital transformation in the future by uniting their efforts and pool their capabilities and resources e.g. in a joint institution to gain the top spot globally and also stay there in the upcoming decades. This paper tries to introduce a concept of how Europe can bundle their capabilities, as this poses a significant challenge for Germany as the innovation leader3 in Europe as well as for Europe in general, inheriting so many capabilities in e.g. Switzerland, Sweden or the United Kingdom (Wikipedia – Global Innovation Index, 2020, URL; Global Innovation Index, 2019, URL; DPMA, 2019, URL; Schwab, 2018, URL; Schwab, 2019, URL).4 The paper lays out some definitional foundations, followed by a brief overview of institutions in Germany and Europe and then tries to introduce a possible solution how to unite resources and facilities to strengthen the European path to innovation leadership, followed by a conclusion.5

1.1 What is innovation leadership?

As stated in the previous chapter, Germany and several other European countries are in the top tier regarding innovation and competitiveness. However, there are several studies and current articles stating that especially Germany is losing its edge (Schwab, 2019, URL; Rammer, 2018, URL; Andersen, 2017, URL; Gersemann, 2019, URL). Germany is lagging behind in important pillars for maintaining its innovative capacity, particularly in digitization as well as in the innovative strength of public administration, research and education (Hanselka et al., 2020, URL). Next to that, Germany runs the risk of using the wrong strategy to make up for its omissions regarding its Artificial Intelligence (AI) strategy6 as well, as it is a mere attempt to copy the Silicon Valley model, which is not possible and, moreover, not desirable (Hill, 2018, URL). A few months ago, it was reported that US tech company Apple was worth more than the 30 leading German companies listed in the DAX index7. This engrosses the doldrums from leaders in business and policymakers that German corporations need to adapt in order to survive (Marin, 2020, URL). On a greater scale, there is a huge innovation system in Europe “with 44 countries, including 28 European Union8 member states, […] if local innovation ecosystems across the region were to better work together. […] Europe has an abundance of internationally respected universities and STEM graduates, but the market is fragmented by language and local regulation, as well as more subtle cultural differences” (Ziskind, Brack, 2019, URL).

In comparison, there are some countries, which were and are able to adapt very quickly and regardless of the size of the country are competing for the top ranks in the world when it comes to competitiveness, digitalization and innovation leadership.

In Israel for instance, the innovation ecosystem feeds off deep networks from the military, as national service in the armed forces is mandatory. Also, the government is scanning schools systematically to discover the best talents in the country, developing these young people from an early age to become responsible and accountable leaders in the future. Another reason is the concise leadership for innovation by the Israeli Innovation Authority (IIA). The IIA has the approach to understand the challenge an innovation brings first and then sources solutions, therefore working backwards (Embassy of Israel, 2016, URL; Ziskind, Brack, 2019, URL).

There is a reason why especially the USA and US companies are in the lead when it comes to innovation leadership. Major innovations in the digital sphere were enabled by government initiatives and huge public spending, especially through the work of the Defense Advanced Research Projects Agency (DARPA)9 in the 1960s and 1970s, which established the forerunner of the Internet at this time, called ARPANET. This is one of the main reasons for the success and digital technology lead of US companies. Next to that, out of the ten companies worldwide which are spending substantial amounts of money for their research & development activities, seven are coming from the USA (Suhr, 2019, URL; Schwab, 2018, URL; Schwab, 2019, URL; Hill, 2018, URL; Lee, 2014, p. 201).

1.2 Working definition

For this paper, the working definition for innovation leadership is therefore the “consolidated and institutionalized approach to foster and strengthen a trans-regional innovation ecosystem within all sectors especially through focused public spending, establishing an agile innovation culture to enable the development of breakthrough technologies, research advancements and sustainable digital business models”.

2 Current situation

In this chapter and its sub-chapters, some institutions and organizations for digital innovation and transformation are briefly introduced. The paper focuses on Germany and in part on Europe. This is only a selection of institutions and completeness cannot be granted.10

2.1 Germany

The following sub-chapters provide a brief overview of several institutions in Germany which are intended to drive digital and technological innovation.

2.1.1 Agency for Disruptive Innovation in Cybersecurity (ADIC)

The Agency for Disruptive Innovation in Cybersecurity (ADIC)11, currently referred to as Cyber agency, is a joint initiative from the Ministry of Defence (BMVg) and the Ministry of the Interior (BMI). As government expects real digital conflict scenarios, such as hybrid warfare or increased threats from cyber attacks such as cyber crime, cyber espionage and sabotage, the agency has the task to identify and promote cyber security and key technologies for internal and external security with high innovation potential (BMVg, 2018, URL; BMI, 2018, URL).

2.1.2 Agency for Leapfrog-innovations (SprinD)

The Agency for Leapfrog-innovations (SprinD)12 is a joint initiative from the Ministry of Education and Research (BMBF) and the Ministry for Economic Affairs and Energy (BMWi). Due to the fact that new international technology and service companies are increasingly challenging the innovation leadership of the German industry, the agency was established. It shall provide new answers within the German innovation funding system. The agency is intended to be a flexible and rapid government support instrument. The focus lies on supporting and accelerating the breakthrough of highly innovative ideas into the market. The primary goal of the agency is the discovery and further development of research ideas that have the potential for leapfrogging innovation (BMBF, 2019, URL; Bundesregierung, 2019, URL).

2.1.3 Cyber Innovation Hub (CIH)

The Cyber Innovation Hub (CIH) of the German Federal Armed Forces is the interface between the start-up ecosystem and the Armed Forces. Its mission is to promote digital innovations within the Armed Forces by identifying innovative technologies in the international start-up scene and afterwards developing and validating them for the German Armed Forces. A focus lies on disruptive technologies in cyber and information technology as well as digital products and services (BMVg, 2020, URL).

2.1.4 CODE

The CODE13 is the research institute for cyber defence at the University of the German Armed Forces in Munich. Its aim is to connect cyber security experts from research, military, corporate world, government authorities and associations. CODE thus forms an interdepartmental cybercluster in which knowledge and skills are bundled and mutual exchange is promoted. The institute provides basic research in the various areas of IT security (UniBw, 2020, URL).

Overall, for this paper, it can be established that there are several institutions in Germany which are driving and promoting technological advancements and enable innovation and digital transformation. Critique comes in a classified report from the Federal Court of Auditors14, stating that Germany already has a whole range of authorities and institutions for digital and cyber innovations. The Court issued six warnings of multiple government funding and sees a risk that the Cyber agency will not be able to be distinguished from other research organizations and that it will have numerous interfaces with the existing state-funded institutions on the research landscape (BRH, 2019, URL).

2.2 Europe

The following sub-chapters provide a brief overview of several institutions in Europe which are intended to drive digital and technological innovation.

2.2.1 Joint European Disruptive Initiative (JEDI)

The Joint European Disruptive Initiative (JEDI) is a pan-european initiative led by German and French visionaries, trying to establish a European DARPA. It was officially founded in 2019 and from a legal structure point-of-view a foundation. It was intended to be set up outside of the classic landscape of national or EU ministries and has the goal to bring Europe in a leadership position in breakthrough technologies. It is the precursor to the European agency for disruptive innovation. The network is powered by 3.700 leaders of the deeptech ecosystem in 23 countries from Europe, including major innovation players like the United Kingdom and Switzerland. The mindset within the organization is specifically set to not differentiate between military applications of technologies and civil applications. The founders believe that there is a deep interconnection between the two fields. The current roadmap for the year 2020 is to start and carry out three to five DARPA-like grand challenges, e.g. the ‘Billion molecules against Covid-19’15 challenge. The foundation is currently funded by endowments and has no public funding, as government administrations are still reluctant because JEDI has not produced any results so far and only started one challenge as of now. The current outlook and plan is to develop JEDI into an intergovernmental agency without losing agility and methodology in approaching these challenges, projected to initiate the transfer in 2022 (Loesekrug-Pietri, 2020, Webinar; JEDI, 2020a, URL; JEDI, 2020b, URL; Kapalschinski, 2020, URL).

2.2.2 EU institutions and initiatives

The sub-chapters provide a brief overview of a selection from institutions and related initiatives in the EU driving innovation and digital transformation. European Innovation Council (EIC)

Introduced by the European Commission (EC), the European Innovation Council is supposed to support the commercialization of high-risk, high-impact technologies in the European Union. The Innovation Council is currently in its pilot phase and will be fully implemented under Horizon Europe16 in 2021 (EC – EIC, 2020, URL). European Research Council (ERC)

The mission of the European Research Council (ERC) is to foster highest quality research in Europe. It is intended to be a pan-European mechanism for funding basic research. The promotion of research and innovation projects is competitive and supporting investigator-driven frontier research across all disciplines. It is based on scientific excellence. The Council supplements national research funding agencies’ funding activities in Europe. It is a component of Horizon 2020 (EC – ERC, 2020, URL). Research Executive Agency (REA)

The Research Executive Agency (REA) is a funding body for research and innovation, established by the European Commission. It manages EU research grants, e.g. for the Horizon 2020 program (EC – REA, 2020, URL; Wikipedia – REA, 2020, URL). European Defence Fund (EDF)

The European Defence Fund (EDF) is a constituent of the Common Security and Defence Policy (CSDP) of the EU. The aim is to increase national investment in the research for defence matters and coordinate these efforts. It also shall foster the interoperability between the armed forced of the nations in the European Union. It shall encourage and facilitate the development of state-of-the-art defence technology and products and lead to innovation and strengthen cross-border cooperation. The goal is also to establish an innovation network between enterprises, research centres, national administrations, international organizations, and universities (EC – EDF, 2020, URL; Wikipedia – EDF, 2020, URL).

Overall, for this paper, it can be established that there are several institutions in the European Union, mainly led and coordinated by the European Commisssion, which are driving and promoting technological advancements and enable innovation and digital transformation.


1 The course focused on technology policy and digital transformation. In a broader sense, the assumption is that innovation cannot happen without digital transformation in these times. Therefore, within this paper, innovation capabilities, digital innovation, digital transformation, and closely similar or related topics and aspects are used synonymous. Of course, every term has its own meaning in detail, but for reasons of simplification for this paper, they are used interchangeably.

2 The GII is an annual ranking published by Cornell University, INSEAD, and the World Intellectual Property Organization. It ranks countries by their capacity for, and success in, innovation (Wikipedia – Global Innovation Index, 2020, URL). The World Economic Forum (WEF) Global Competitiveness Report (GCR) is an annual report presenting an Index which measures the “set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity” (Wikipedia – GCR, 2020, URL).

3 The assumption is that Germany is the innovation leader in Europe, based on the WEF ranking from 2018, used for this concept paper (Whiting, 2018, URL).

4 In the GII 2019, there were seven European countries listed in the Top 10 ranks, namely Switzerland, Sweden, Netherlands, United Kingdom, Finland, Denmark, and Germany. In the WEF Global Competitiveness Report 2019, there were six European countries listed in the Top 10 ranks, namely Netherlands, Switzerland, Germany, Sweden, United Kingdom, and Denmark (Schwab, 2019, URL).

5 It must be noted that no completeness can be granted (e.g. regarding the compendium of German or European institutions involved in innovation and digital transformation) and that assumptions of simplification have been made for reasons of structure and limitation of length for this paper.

6 The AI strategy of the German government wants a.o. to secure Germany as an excellent research location and strengthen the competitiveness of the German economy. It also has one goal a.o. to exploit the manifold application possibilities of AI in several areas and will focus on the benefits for people and the environment (Bundesregierung, 2018, URL).

7 The DAX (Deutscher Aktienindex) is the most important German share index, inheriting the 30 largest companies from Germany, based on free float market capitalization (Wikipedia – DAX, 2020, URL).

8 Before the United Kingdom left the European Union, referred to as Brexit.

9 The Defense Advanced Research Projects Agency is part of the Department of Defense (DoD) of the United States of America. It is an agency which was established in the 1950s after the Sovjet Union launched the Sputnik satellite and the USA then were committed to never be trailing strategic technological advancements in the future. Originally established as the Advanced Research Projects Agency (ARPA), the focus shifted quickly to breakthrough innovations and technologies for national security of the United States, adding the ‘D’ for Defense. DARPA is obtaining change which is transformational at its core instead of advancing incrementally. The agency is involved in a fertile ecosystem of innovation comprising of academic institutions, corporate players, and governmental and public sector actors, trying to establish novel strategic possibilities and opportunities. This concept and environment have been lively and beneficiary for decades and ensures the vigorous creative and groundbreaking output which DARPA is aiming for and approached to cultivate. As the agency is working with innovation leaders from the public sector as well as the private sector, DARPA has made major advancements in technology and research, specifically in the military sphere by inventing high-precision weapons and stealth technology but also inventions for civil society like the Internet, the Global Positioning System (GPS) or intelligent and automated voice recognition (DARPA, 2019, URL; Hanselka et al., 2020, URL).

10 The author notes that – after considerable research – there was no overall register or overview of all institutions and agencies to this date.

11 In German: ‚Agentur zur Förderung bedarfsorientierter Forschung an disruptiven Innovationen im Bereich Cybersicherheit und Schlüsseltechnologie‘, later renamed to ‚Cyberagentur‘ (BMVg, 2018, URL).

12 In German: ‚Agentur für Sprunginnovationen in Deutschland‘ (BMBF, 2019, URL; Bundesregierung, 2019, URL).

13 In German: ‚Forschungsinstitut Cyber Defence‘ (UniBw, 2020, URL).

14 In German: ‚Bundesrechnungshof‘ (BRH). It is the supreme federal authority for federal audit matters in Germany (Wikipedia – BRH, 2020, URL).

15 The challenge is open to the best scientific & technology teams in the world. The objective is to screen billions of molecules with blocking interactions relevant to SARS-CoV-2 and fast-track the route to a therapeutic treatment (JEDI, 2020b, URL).

16 Horizon Europe is the next research and innovation framework programme and the EC’s proposal for an ambitious €100 billion research and innovation programme to succeed Horizon 2020 (EC – Horizon Europe, 2020, URL). Horizon 2020 is the biggest EU Research and Innovation programme ever with nearly €80 billion of funding available over seven years, starting in 2014. The goal was to drive economic growth and create jobs in the European Union (EC – Horizon 2020, 2020, URL).

Excerpt out of 20 pages


Innovation leadership. Is it time for a European DARPA?
Hertie School of Governance
Technology Policy & Digital Transformation
Catalog Number
ISBN (eBook)
ISBN (Book)
Technology policy, Digital transformation, Innovation leadership, Europe, DARPA
Quote paper
Stefan G. Raul (Author), 2020, Innovation leadership. Is it time for a European DARPA?, Munich, GRIN Verlag,


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