The State as Accomplice

The state promotes innovation. That is the official narrative. The reality is more complicated — and harsher. The state does not fund inventors. It funds projects that capital has already deemed worthy. Those who find no investor receive no state funding. Those who find an investor receive the funding on top — as a bonus that benefits the investor, not the inventor. This is not failure. This is system logic.

I. The Procrustean Bed

Procrustes was an innkeeper in Greek mythology who laid his guests in a bed — and then either shortened their legs or stretched their bodies until they fit. The bed was the measure. The human had to adapt.

State funding programs operate on the same principle. Every program has a tightly laced corset of criteria: company size, sector, founding date, legal form, project volume, technology readiness level. These criteria are not a means to an end — they are the end. Absolute compliance is more important than any substantive criterion. An invention of fundamental importance can be rejected because the inventor had been self-employed for six months too long. A reviewer at the Federal Ministry for Research and Technology said exactly that in a telephone conversation: the invention was fundamentally important, the project fully convinced him. But the application criteria left no room for discretion. The date was wrong. The application had to be rejected.

Procrustes was cruel and made his guests fit. The state is humane — it simply ignores the inventors who don't fit.

This encounter reveals the actual pathology of the system: not malice, but the systematic elimination of judgment. The reviewer had the judgment. The system did not allow it. Criteria are easier to administer than decisions. Those who reject on the basis of criteria are not liable. Those who exercise judgment are. So no one exercises judgment anymore — and inventions fail on data points that are objectively completely meaningless.

II. “Find Yourself an Investor”

Those who survive the Procrustean bed — who despite all formal obstacles find their way into the relevant ministries — are confronted with a different obstacle: institutional abdication.

Finding one's way into a ministry is itself an ordeal. It rarely succeeds directly. It succeeds through networks, through members of parliament, through personal assistants, through months of correspondence. When an MP intervenes, when an aide mediates, when a meeting finally takes place — it ends with a sentence that says everything: “Find yourself an investor — and then come back.”

This sentence is not a rejection. It is a redefinition of the state's task. The state, the implicit message runs, does not select. It follows. It reinforces what capital has already decided. The selection it leaves to the market — that is, to capital. In doing so, it also leaves to capital the question of which market-ready products Germany will have in ten years — to capital, which pursues the fastest possible return on investment.

That is not efficiency. That is abdication.

There is something further that is rarely stated: the state funding that the inventor never received appears on the investor's ledger as a bonus. The funding exists not because the inventor invented something. It exists because the investor invested. The investor receives the funding as a bonus on his own decision. The inventor receives nothing — except the dependency on the investor that made this funding possible in the first place. This is the complete circle: the state funds the investor who exploits the inventor who had the idea the state claimed to want to promote. The investor who says: we have enough money, we don't want or need state funding — that investor does not exist. Capital always presents itself as scarce in public, even when an investor has accumulated vast sums and is desperately seeking investment opportunities. Everyone takes subsidies on favorable terms. For the investor they are always good — as a bonus. And he takes no real risk, since financial losses can be written off against tax.

III. “We Don’t Need Inventions — We Need Innovations”

The same ministry representative formulated the state philosophy in its purest form in a telephone conversation: “We don't need inventions — we need innovations.”

This sentence must be read slowly. The distinction between invention and innovation is not merely ministry jargon — it is established in economic theory and deeply embedded in the language of the innovation system. The invention is the discovery: the new, the raw material, the first step. The innovation is the market launch: the moment when an idea becomes a product that earns money. In this reading, only the investor creates the “real value” — the innovation. The inventor merely supplies the raw material.

What this distinction conceals: that inventors are systematically and fundamentally prevented from carrying out the transformation process from invention to innovation themselves. Not because they couldn't — but because the system is built so that they fail and the investor steps in. The missing capital, the funding criteria, the obligation to make additional contributions, the silence — all of this is not accidental obstacles. It is the mechanisms by which the transformation process is shifted away from the inventor and toward the investor.

This conceptual shift has historical depth. In the 2010s, start-up romanticism reached its peak. Disruption, platform economics, scalable business models counted as innovations. Uber, Airbnb, Zalando — all innovations, even though no technical invention lay behind them, merely the digital reorganization of existing markets. The term innovation was stretched so far that it became meaningless. Those who invent something that makes new use of physics no longer fit any category.

The result: the state preferred to fund what already worked. It funded exploitation. Creation it left to chance — or to the willingness of individual inventors to keep going at their own expense for years.

The worldview behind this sentence was formulated by a man who had become a millionaire through indescribable frugality and shrewd speculation — with the job of a social worker — in a single sentence: “Ideas are a dime a dozen.” That is the capitalist epistemology in its purest form: ideas are worthless. Value arises only through capital. The inventor is interchangeable. The investor is irreplaceable. This worldview the ministry has internalized — even if it does not formulate it so bluntly.

IV. The Investor as Controller

Even where the state abdicates, the inventor still has the path to industrial capital. And sometimes doors open that had seemed long closed. A crucial distinction must be made here, one that is almost never drawn in public debate about innovation funding: the distinction between the pure investor and the realizing company.

A realizing company — a firm that can produce, distribute, and further develop the invention — would be a genuine partner. It brings production capacity, market knowledge, technical know-how, distribution structures. With such a company a genuine division of labor would be possible: the inventor invents, the company realizes.

What the inventor almost always gets in practice is the other type: the pure investor. This one brings money — and nothing but money. Realization remains entirely with the inventor. All technical problems, all development risks, all production questions — 100 percent with the inventor. For this the investor has a business plan, a schedule and cost plan, and a list of milestones that he — or his consultant — has created, often on the basis of figures that nobody really knows. This plan becomes the contractual document. The inventor is measured against it.

That development is not plannable — that technology needs its own time, that unforeseen problems arise, that a six-month delay in a three-year development project is normal and not catastrophic — does not interest the business plan. The plan is the plan. Those who miss it have drawn the short straw. The investor has the inventor firmly in his grip.

And then comes the most elegant instrument of exploitation: the obligation to make additional contributions. When the money runs out — and it always runs out, earlier than planned, because the business plan was written by someone with no understanding of the technology — the inventor must either contribute more or give up shares. Since he has no money, he gives up shares. Round by round. Until his own invention no longer belongs to him.

This is not an exception. This is the standard model. The risk distribution is perverse: the investor bears the capital risk — but he has means to cushion it, to diversify it, to write it off against tax. The inventor bears the development risk, the production risk, the market risk — and has no means to cushion any of them. At the same time, with each round of additional contributions, he loses part of the control over what he created. In the end he is an employee in his own invention.

It suffices, incidentally, if the investor can credibly demonstrate to a funding institution that he is wealthy. Whether he understands the technology, whether he is capable of realizing it, whether he treats the inventor fairly — nobody checks. Proof of wealth suffices. The funding flows.

V. The Capitalist Courtesy

Sometimes doors open that had seemed long closed. A director of an international corporate group is interested. He invites to a meeting. There is a second meeting. Weeks later a call: yes, we want to get involved — you should visit us at headquarters. The inventor studies flight schedules.

Then: silence. All renewed attempts at contact lead nowhere. No rejection. No explanation. No answer to calls, no response to emails.

Ten years later, renewed contact with the same man. He is now in early retirement. Why he left the company he does not say. He now works as a consultant. To the question of why he never got back in touch, he answers: “We came to the conclusion that your invention didn't fit our portfolio after all. Business as usual.”

Business as usual. Three words, ten years later. That is the complete description of capitalist courtesy: no malice, no explanation, no apology. Only the notification that the matter was long concluded for one side — while the other was still waiting for an answer.

This form of disappearance has a name: capitalist courtesy. It is the most subtle form of exploitation, because it leaves no trace. Those who reject must justify. Those who remain silent need not. The inventor waited months for a meeting, hoped months for a decision, and receives silence as the answer.

Particularly noteworthy is when even organizations conceived as a countermodel to classical capitalism — cooperatives, solidarity economies, corporate networks — practice the same capitalist courtesy. The legal form changes nothing about the power asymmetry. Those with the resources can afford silence. Those who need them wait.

VI. The Structural Pattern

The five episodes — the Procrustean bed, the institutional abdication, the redefinition of invention as innovation, the investor as controller, the capitalist courtesy — are not isolated cases. They are expressions of a structural pattern that repeats itself, regardless of the people involved, regardless of the quality of the invention, regardless of the inventor's willingness.

The pattern follows a simple logic: the state has delegated the selection of innovations to capital. It acts as if it promotes — but it only promotes once capital has already decided. In doing so it confirms capital's decision, rather than correcting it. The funding programs it establishes are optimized for investability, not for importance.

The state is not a neutral actor in this system. It is an accomplice — not in the sense of conscious collusion, but in the sense of structural complicity. It has helped shape the rules of the game by which capital wins. It has constructed the funding criteria so that they establish capital as the pre-selector. It has redefined the concept of innovation so that invention no longer figures in it.

This is not a conspiracy. It is the result of decades of political influence by those who speak loudest, pay most, and are best organized. That is never the inventors.

VII. The Consultant as Hinge

The state's complicity has an institutional infrastructure. It is called external consulting. Since 2017, the federal ministries have collectively spent more than one billion euros on external consultants. In 2023 alone it was 239.4 million euros — rising. The official justification: the specialist knowledge is lacking internally. So it is purchased. From those who have it.

This is where the Procrustean bed has its origin. The criteria of funding programs are not drafted by civil servants who know the daily reality of an inventor. They are drafted by consultants who know the daily reality of an investor. McKinsey, Roland Berger, BCG — the same firms that advise corporations and investment companies also advise the ministries that set up funding programs. The result is not a conspiracy: it is structural logic. Those who know and understand investors write funding programs that are readable and usable for investors. For inventors they are not. The hollowed-out state purchases the knowledge it no longer carries itself — from those whose interests it is then supposed to regulate.

The most striking example is the Agenda 2010 — the largest social policy reform program of the postwar era. In restructuring the Federal Employment Agency, Roland Berger and McKinsey were involved with entire armies of consultants. That the same firms that designed the new system subsequently also advised the companies that benefited from the new labor market rules — this is no exception. It is the business model.

The external consultant is the hinge between capital and state. He sits on both sides of the table — offset in time, but consistent in content. He knows what the investor needs. He formulates what the ministry demands. He translates capital's interests into the language of public funding. This is called policy consulting. It is structural influence — legal, expensive, effective.

The inventor does not figure in this constellation. He has no consultant known in the ministries. He has no budget for lobbying. He has no networks in the administrative elite. He has an invention. That is not enough.

VIII. The Well-Oiled Machine

Those who believe the German legislative process is fundamentally slow are mistaken. It is selectively slow. It depends on whose interests are at stake — and who has the power to establish urgency.

October 2008. Hypo Real Estate is at risk of collapse. On 13 October the federal government announces an unprecedented rescue operation. The Financial Market Stabilization Act passes through parliament in an emergency procedure: first reading, committee deliberation, second and third reading — all on a single day. The Bundesrat approves in an emergency session the same day. On 18 October 2008 — just five days after its announcement — the law enters into force. It spans a liability framework of 480 billion euros. For comparison: the entire federal budget of that same year was 284 billion euros.

Five days. For a law that enabled the largest state intervention in the economy since the Second World War — without meaningful parliamentary debate, without public hearing, without stakeholder participation.

And who wrote this law? Not civil servants from the Finance Ministry — they had no contingency planning. The draft was written by the law firm Freshfields Bruckhaus Deringer. The same firm that had previously handled the acquisition of Depfa Bank by Hypo Real Estate — the transaction that contributed substantially to the collapse. The same firm whose clients were among the beneficiaries of the rescue. The Finance Ministry long refused to disclose the fee for this. Only a lawsuit compelled it: 163,744 euros — for a law that mobilized 480 billion, whose authors simultaneously represented the interests of those being rescued.

Against this: the company with asset lock. Under discussion since 2019. Promised in the 2021 coalition agreement — not implemented. Promised again in the 2025 coalition agreement. More than 20 business associations support the concept. The Conference of Justice Ministers and the Conference of Economics Ministers of the federal states have called on the federal government to table a legislative proposal. Three leading economists — Hüther, Fratzscher, Feld — are publicly unanimous in their support, which in Germany is a rarity. In March 2026 a framework concept was presented: not yet coordinated within the federal government, no timetable, stakeholder consultation still pending. Seven years. No law.

The difference between these two processes is not complexity. The bank rescue law was incomparably more complex in its economic scope and legal implications than the creation of a new legal form for medium-sized businesses. The difference is also not urgency in the substantive sense — demographic change makes the resolution of business succession for hundreds of thousands of companies at least as urgent as the rescue of a single bank. The difference is power. The financial industry could threaten the entire system. The medium-sized businesses waiting for the company with asset lock cannot.

The legislative machine is well-oiled. It just needs the right fuel.

IX. What Is Lost

What this system costs cannot be calculated precisely — because what is lost never becomes visible. Inventions that stay in the drawer. Technologies that never reach maturity. Inventors who after years of waiting turn to a different project — not because the first was wrong, but because the system does not support it.

Germany prides itself on its engineering culture, its precision technology, its innovative capacity. What it does not say: how much of this innovative capacity arises despite the system, not because of it. How much rests on the willingness of individual people to continue for years at their own cost and their own risk, while the state tells them to find an investor first.

“We don't need inventions — we need innovations.” This sentence is the most precise description of the problem. It says: we leave what is new to those who can afford to wait. The rest we leave to chance.

X. What Would Be Needed Instead

The solution is not more money. It is a different logic. Funding programs that allow room for discretion — and thereby reviewers who are allowed to exercise judgment without being held liable for it. Evaluation criteria that weight technical significance, not merely formal compliance. Patent law that protects the inventor, not only the later rights holder. Court costs that are affordable even for individual inventors. External consultants who may have no conflicts of interest when designing funding programs — because the same consultants cannot simultaneously advise the investors for whom they are designing those programs. And a definition of innovation that includes invention — rather than excluding it.

That would mean the state once again selects — not capital. That it takes responsibility for the question of which market-ready technologies Germany will have in ten years. That it stops confirming capital's decisions and begins to correct them where they are oriented toward the wrong benchmark — short-term ROI.

That is a political question. It is not technical, not economic, not bureaucratic. It is a question about whom the state serves. As long as the answer is: capital — it is not a promoter. It is an accomplice.

As long as this remains so, Germany will continue to produce inventions — despite the system, not because of it. The question is only how long enough people will be found who are willing to bear these costs alone. And how much is lost in the process, without anyone counting it.