This is the conclusion reached by a multi-level cluster analysis based on firm level data from the German Economic Institute’s IW Future Panel. Firms’ economic success and productivity are also linked to their innovative milieu. Firms in highly innovative milieus are more successful and more productive than those in less innovative milieus. The analysis also shows that few milieus ex ploit the potential of digitalisation, which opens up entirely new fields of innovation. If sustained growth in productivity and competitiveness are to be achieved throughout the German business landscape, a much wider range of firms will have to partake in successful innovation. Hence, it is necessary to examine in detail what firms in the various milieus need and what challenges they face in order to develop bespoke (policy) recommendations for the promotion of innovation and thus to strengthen the German innovation landscape.