The importance of universities for a successful transformation process in the economy

The proportion of private universities has increased and complements the higher education landscape with part-time programs. There is also an increasing proportion of universities of applied sciences and international students. The returns on education have remained more or less constant despite academisation.

Despite these developments, Germany is losing ground in global competition. In the last 20 years, Germany has fallen behind ten other countries in terms of R&D expenditure and international patent applications. There are also challenges posed by demographics, digitalisation, decarbonisation and deglobalisation. Against this backdrop, falling numbers of first-year STEM students are particularly problematic.

In a survey, companies cited innovation impulses through knowledge transfer, academic training, research collaborations and start-ups as particularly important. At the same time, university administrators believe that the competitiveness of Germany as a university location is deteriorating.

The correlation between STEM graduates and innovative strength is clear. In Germany, the number of STEM graduates has been declining since 2015, as has the number of first-year students since 2017. In a comparison of the ten countries, Germany is behind countries such as France and South Korea in terms of the STEM replacement rate.

Universities are key cooperation partners for the private sector. Larger companies in particular cooperate more frequently with universities, while SMEs do so less often. In an international comparison, Germany ranks second in terms of the co-operation rate.

Universities are also supporting the transformation process through start-ups and research activities. Between 2020 and 2024, the number of start-ups and employees in start-up support increased. Technical universities play a leading role in research, especially in deep tech areas. In terms of expenditure on university research and patents, Germany is behind Denmark and Switzerland.

The influx of international students has increased in recent years. These students, often with STEM qualifications, are strengthening networks and helping to stabilise the demographically induced decline in growth. Germany ranks third among the ten countries in terms of the number of international students.

Academic training is also required for the transformation, particularly in areas such as AI. Part-time study programs, particularly at private universities, have increased and are viewed positively. Germany is only in fifth place internationally when it comes to formal continuing education. Companies cite a lack of suitable programs as an obstacle to more continuing education.

Expertise in geopolitical challenges and openness to the world are also important for transformation. Studies show that periods spent abroad during a degree program can strengthen these aspects.

In order to increase the impact of universities on innovation and the transformation process, measures should be taken such as strengthening STEM education, higher research spending and better framework conditions for research cooperation. In addition, the immigration of international students should be further promoted. International exchange programs such as Erasmus+ should be expanded in order to strengthen cosmopolitanism and a pro-European attitude.