Federal State Innovation Analysis: Ranking compares patent strength, start-up momentum and political innovation strategies
Baden-Württemberg is Germany’s most innovative federal state. This is the result of our latest analysis. Using a scoring system, we examined the number of start-up formations and patent applications per 100,000 inhabitants. In addition, coalition agreements were analyzed through keyword searches to evaluate how strongly innovation is prioritized politically. The results reveal a clear north-south divide: Baden-Württemberg takes first place with an average score of 2.33 points.
With the highest number of patent applications (135 per 100,000 inhabitants) and strong political anchoring in its coalition agreement, Baden-Württemberg ranks first overall. The state also places fifth for start-up formations (4 new start-ups per 100,000 inhabitants). North Rhine-Westphalia takes second place with an overall score of 4.7 points, around 4 start-up formations and 32 patent applications per 100,000 inhabitants. Terms such as “innovation” and “digitalisation” appear on average once per page in the state’s coalition agreement. Hamburg ranks third with five points, driven by an above-average number of start-up formations (11 per 100,000 inhabitants). Hesse follows in fourth place with an overall score of 5.3 points. Bavaria scores highly with a strong density of start-ups (around 6 per 100,000 inhabitants), ranks second in patents (95 patents per 100,000 inhabitants) and secures fifth place overall.
Berlin is the start-up capital but falls behind in patents
While southern federal states dominate technological innovation, Berlin is the center for entrepreneurs and founders. With nearly 17 start-ups per 100,000 inhabitants, the German capital leads this category. However, Berlin ranks only seventh overall (9.33 points), as it performs comparatively weaker in patent applications (12th place) and in the strategic prioritisation of innovation within political documents (15th place). A similar pattern can be seen in the city states of Hamburg (4th place) and Bremen (11th place), which both have dynamic start-up ecosystems but perform less strongly in industrial patent development compared to larger territorial states.
Catch-up potential in the north-east
Eastern German federal states and Saarland occupy the lower end of the ranking. Mecklenburg-Western Pomerania ranks last (16th place) with an average score of 14.67. With only one start-up formation and seven patents per 100,000 inhabitants, the state shows the greatest potential for structural improvements. Brandenburg (15th place) and Saxony-Anhalt (14th place) also reveal a significant gap compared to the innovation hubs in southern and western Germany.
“Baden-Württemberg and Bavaria continue to form the economic backbone of Germany—this is where technical expertise meets the right structural conditions,” comments Dr. Sven Schottmann, Principal and Co-CEO of BSBI. “What is particularly interesting, however, is Berlin’s role: the city may be the birthplace of new business models, but long-term protection through patents tends to happen in industrial centers. To achieve more balanced economic growth and revitalize Germany as a business location, we need to find ways to connect the entrepreneurial spirit of metropolitan areas with the patent strength of the territorial states.”
About the analysis
For the 2026 Innovation Ranking, three central indicators were analysed across all 16 German federal states: the number of start-up formations per 100,000 inhabitants (as of 31 December 2024), the number of patent applications per 100,000 inhabitants, and a qualitative text analysis of current coalition agreements (frequency of relevant innovation-related terms relative to total page count). An average score was calculated based on rankings across these three categories, with a lower score indicating stronger innovation performance.