Newsletter July 2021

On 16 and 17 June 2021, the Mannheim Virtual IO Workshop on secrecy and disclosure in innovation was jointly hosted by ZEW Mannheim, the Mannheim Centre for Competition and Innovation (MaCCI), and the Collaborative Research Center (CRC) TR 224 “EPoS” at the universities of Bonn and Mannheim.

ZEW Mannheim has received the TOTAL E-QUALITY award for the third time, this year with an additional award for diversity. The institute was honoured by the jury for its successful gender equality policy, its well-established structures for implementing gender equality and its ongoing commitment to promoting equal opportunities.

Economic experts assess the inflation risk as low and expect the current high rate of price increases to be only short-lived. The forecasts for economic growth in Germany were raised, while the estimates for the euro area remained virtually unchanged. This is the result of the business cycle tableaus by ZEW Mannheim and the German daily newspaper, Börsen-Zeitung.

Family-related leave, part-time work, lower-paid professions – there are many reasons why the gender wage gap exists. In the eleventh episode of the #ZEWPodcast ‘Wirtschaft · Forschung · Debatten’/‘Economy · Research · Debates’, Junior Professor Susanne Steffes, deputy head of the Research Department “Market Design” at ZEW Mannheim, explains the circumstances that lead to the gender wage gap and discusses ways to improve career opportunities for women.

Professor Friedrich Heinemann, head of the ZEW Research Department “Corporate Taxation and Public Finance”, welcomed Ludger Schuknecht to the virtual #ZEWBookTalk on 6 July 2021. He discussed with him his current book “Public Spending and the Role of the State – History, Performance, Risk and Remedies”. Schuknecht, who is currently a visiting professor at the Lee Kuan Yew School of Public Policy, previously held the positions of Deputy Secretary-General at the OECD and Chief Economist at the German Federal Ministry of Finance. For the #BookTalk, he was connected from Singapore.

“Taxation, Venture Financing and State Aid: Using Orbis & Zepyhr Data in Economic Analysis” was the title of an online seminar organised by ZEW Mannheim and Bureau van Dijk (BvD) on 1 July 2021. The seminar focused on the scientific use of BvD’s Orbis and Zephyr databases. By presenting three research projects, scientists from several European research institutions illustrated the many possibilities of using the two databases.

The ZEW Annual Report 2018, which is dedicated to the topic of “Digitalisation”, was honoured in the category “Best of Decade” (2010 to 2020) at the International Creative Media Awards. Along with 28 other reports, it is one of the best works from the first decade of the ICMA Awards in the Annual Reports (online and print) category and is the only report from a research institute to appear in this list.

ZEW Mannheim is pleased to announce the Leibniz Network’s 13th interdisciplinary conference on Real Estate Markets and Capital Markets (ReCapNet). The event is hosted by KTH Royal Institute of Technology and will take place either online or in a hybrid format in Stockholm in mid-November 2021 and is open to all researchers interested in the interactions between real estate markets and capital markets.
 
The conference focuses particularly on “Digitalization and Real Estate”. A list of further potential topics is included in the call for papers. Submissions on these and related areas at the intersection of real estate finance and real estate economics are encouraged. Please submit full papers without author-identifying information in PDF format to recapnet@zew.de no later than 16 August 2021.

ZEW Mannheim and the University of Mannheim are organizing the inaugural conference of the recently co-founded Mannheim Institute of Financial Education (MIFE) from 29 November to 2 December 2021. The MIFE is dedicated to the comprehensive research of financial education issues. In addition to the first two conference days with invited keynote speakers at the MIFE opening, the event offers further opportunities for exchange and networking between representatives from research, politics, and practice.

This includes a workshop for early career researchers from various disciplines. Researchers at the beginning of their careers from economics, household finance, economics and business education, psychology, and related fields are invited to submit their full research papers that have not yet been accepted for publication. Topics may be related to – but are not confined to – the MIFE’s research areas, i.e. sustainable financial education across the lifespan; digitalisation and financial education; long-term financial decisions and old-age provision. In this context, the Deutsche Bundesbank is sponsoring an Early Career Research Prize on Financial Literacy, worth €5,000, which will be awarded to the best paper submitted. The submission of papers (max. 20 pages) to MIFEconference@zew.de is open until 1 September 2021.

Professor Bettina Peters, deputy head of the ZEW Research Department “Economics of Innovation and Industrial Dynamics”, was awarded the Dean’s Teaching Award for Distinguished Lecturers at Pforzheim University on 23 June 2021. The professor of innovation from the University of Luxembourg received the award, which is presented annually, for her teaching commitment at Pforzheim University’s Faculty of Business and Law.

The University of Strasbourg has appointed Dr. Holger Stichnoth, deputy head of the Research Department “Social Policy and Redistribution” at ZEW Mannheim, as honorary professor (professeur conventionné) as of 1 September 2021. In addition to his activities in the context of university teaching, his tasks include scientific cooperation in research projects of the university’s Bureau d’Economie Théorique et Appliquée (BETA).

There is still considerable room for improvement in Germany when it comes to knowledge of economic facts: Although Germans are better informed than average in a global comparison, they are only in the middle of the pack compared to other industrialised countries. Interestingly, misjudgements are usually more pessimistic than the reality. Germany’s economic performance is often assessed too negatively, for instance, with regard to the country’s economic performance, the level of unemployment, the employment rate of women, and inequality.

This is the result of a research project conducted by ZEW Mannheim with the support of the Brigitte Strube Stiftung.

During the coronavirus pandemic, companies in Germany reduced their innovation activities less than anticipated. This is shown by a recent study by ZEW Mannheim on behalf of the Federal Ministry of Education and Research. German companies that participated in the ZEW Innovation Survey from March to July 2020 planned to cut their innovation spending by an average of about two per cent in 2020. “By comparison, during the 2009 financial crisis, companies lowered their innovation spending much more drastically, by an average of eleven per cent,” says ZEW researcher and co-author of the survey, Josefine Diekhof, PhD.

The reform of the European Emissions Trading Scheme (EU ETS) presented today by the EU Commission will reduce the cost of climate protection in 2030 from 2.8 per cent of EU-wide consumption to 1.9 per cent. The proposal, however, does not exploit the full savings potential of 1.1 per cent. A smart distribution of the CO₂ budget could save the EU up to 152 billion euros in economic costs. The Commissions’ current proposal, on the other hand, reduces climate protection costs by only 81 billion euros, mainly by introducing a second emissions trading system.

This is the result of a recent calculation by ZEW Mannheim based on a macroeconomic simulation model.

A more powerful IT infrastructure and government funding options would encourage more companies to use artificial intelligence (AI) applications. The main obstacles preventing companies from making greater use of this technology are the high development and implementation costs and the lack of skilled workers. The companies surveyed still see significant room for improvement for Germany in terms of AI in comparison to other countries. These are the results of a survey conducted by ZEW Mannheim on behalf of the Federal Ministry for Economic Affairs and Energy among more than 950 companies actively using AI or with a potential to use AI.

The ZEW Indicator of Economic Sentiment for Germany decreased in the current July 2021 survey, falling 16.5 points to a new reading of 63.3 points. However, expectations for the next six months still remain at a very high level. The assessment of the economic situation in Germany once again improved strongly and stands at 21.9 points in July, 31.0 points higher than in the previous month. The economic situation in Germany is now rated similarly to how it was at the beginning of 2019, with the corresponding indicator now being back in positive territory for the first time in two years.

In Germany, the COVID-19-related tax relief measures taken so far are not ambitious enough to cushion the impact of the crisis. In their current form, they mainly relieve large companies, while small companies and start-ups hardly benefit at all. Further tax measures are therefore necessary to ensure that German companies are able to weather the crisis well. These are the results of a study by ZEW Mannheim on behalf of the Friedrich Naumann Foundation for Freedom.

A US court has dismissed the lawsuits against Facebook. The Federal Trade Commission and 40 US states had accused Facebook of having monopoly power in the social media market and wanted to force Facebook to reverse its acquisition of the image and video platform Instagram and the messenger service WhatsApp. Professor Achim Wambach, president of ZEW Mannheim and member of the German Monopolies Commission, comments on this matter.

On 1 July 2021, the Communist Party of the People’s Republic of China celebrates its 100^th birthday. It governs a country whose importance for the global economy has grown enormously over the years. For Germany, the People’s Republic is a key export market. However, European companies are increasingly facing competition from Chinese companies.

Our publications are available to download in PDF format. PDF files can be viewed using, among others, Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Jan Abrell and Sebastian Rausch
A Smart Design of New EU Emissions Trading Could Save 61 Per Cent of Mitigation Costs

Josefine Diekhof, Bastian Krieger, Georg Licht, Christian Rammer, Johannes Schmitt, and Gero Stenke
The Impact of the Covid-19 Crisis on Innovation

Gunter Glenk, Rebecca Meier, and Stefan Reichelstein
Cost Dynamics of Clean Energy Technologies

Gunter Glenk and Stefan Reichelstein
Energy Conversion and Storage: The Value of Reversible Power-to-Gas Systems

Florian Buhlmann, Michael Hebsaker, and Sebastian Siegloch
Reformvorschläge der Parteien zur Bundestagswahl 2021 – Finanzielle Auswirkungen (Reform Proposals of the Parties Running in the 2021 German Federal Election – Financial Implications)

Verena Dutt, Friedrich Heinemann, Christoph Spengel, and Barbara Stage
Aktuelle steuerpolitische Konzepte und ihre Folgen für den Standort (Current Tax Policy Concepts and Their Consequences for Germany as a Business Location)

Irene Bertschek, Holger Bonin, Rebecca Janßen, Tobias Wenzel, and Sebastian Klump
Einsatz datengetriebener Produkt-und Preisdifferenzierungen und Folgen für den Sozialstaat (Use of Data-Driven Product and Price Differentiation and Consequences for the Welfare State)

Irene Bertschek, Holger Bonin, Jürgen Kühling, Gregor Thüsing, and Tobias Wenzel
Entwicklung eines Konzepts zur Datenallmende (Development of a Concept for Data as a Common Good)

Holger Stichnoth, Lukas Riedel, Claudia Neu, Hanne Albig , Marco Ebert, Lena Göhringer, Paul Kastner, Leo Latscha, Marcel Mikeler, and Fabian Müller
Gesellschaftliche und regionale Bedeutung von Daseinsvorsorge sowie der Versorgung mit Dienstleistungen und Infrastruktur (Social and Regional Significance of Public Services and the Provision of Services and Infrastructure)

Christian Rammer, Janna Axenbeck, Patrick Breithaupt, Jan Büchel, Theresa Geyer, Manuel Lauer, Thomas Niebel, and Mareike Seifried
Herausforderungen beim Einsatz von Künstlicher Intelligenz (Challenges in the Use of Artificial Intelligence)

Theresa Bührle, Leonie Fischer, and Christoph Spengel
Unternehmenssteuern und die Corona-Krise in Deutschland (Corporate Taxes and the COVID-19 Crisis in Germany)

Christian Rammer, Lena Füner, Sandra Gottschalk, Hannes Marks, Thomas Heimer, Heike Nachtigall, and Jerome Treperman
Zusammenhang zwischen der Durchführung von Digitalisierungs- und Innovationsvorhaben im Mittelstand (The Link Between Digitalisation and Innovation in SMEs)

Effective Levels of Company Taxation within an Enlarged European Union and Related Supporting Services – Update 2021

The Effect of Innovation Policy on China’s Competitiveness and the Reaction of Firms in Germany

In order to support the nationwide containment measures against the coronavirus, ZEW is examining to what extent the events listed here can take place virtually. Individual dates may be postponed. The current status of the events can be found in the ZEW Events Calendar. If you have any questions, please don’t hesitate to contact our event team at event@zew.de.

Speakers: Florian Scheuer (University of Zurich, Switzerland) and Wolfgang Schön (Max Planck Institute for Tax Law and Public Finance, Munich)
Location of the event: Online

Speaker: Robert Seamans (New York University, USA)
Location of the event: Online

Speakers: Professor Philippe Aghion, PhD (College de France, INSEAD and London School of Economics) and Professor Achim Wambach, PhD (ZEW)
Location of the event: Online

Picture Credits: news article of 22.07.2021: AdobeStock/Robert Kneschke, Call for papers article 22.07.2021: Universität Mannheim, press release of 19.07.2021: iStock.com/Wavebreakmedia, press release of 14.07.2021: iStock.com/Alija, press release of 09.07.2021: iStock.com/Dilok Klaisataporn, news article of 07.07.2021: PantherMediapressmaste, press release of 02.07.2021: iStock.com/Imagesines, press release of 29.06.2021: Anna Logue Fotografie, press release of 28.06.2021: Anna Logue Fotografie
All further pictures: ©ZEW