The Federal Report on Research and Innovation 2018, adopted by the Federal Cabinet this summer, confirms that Germany continues to be at the forefront of international competitiveness thanks to its research and innovation (R&I) efforts. To keep up with the stiff and dynamic competition, however, the Federal Government is working out a new research and innovation strategy that aims to more closely intertwine long-term education and innovation policies – with a stress on more cooperation and more speed, especially in application. In 2016, government, business and science devoted a record EUR 92.2 billion to R&D, with two-thirds of that coming from business. Federal R&D spending that year amounted to EUR 15.6 billion, which is 70% higher than the 2005 figure. The Federal Government has also agreed on a target of spending 3.5% of GDP on R&D – together with industry – by 2025, and to use tax incentives to help achieve this goal. The biennial report presents the priorities, objectives and structures of Germany’s R&I policy.