Tax incentives should thus not be targeted to environmental outcomes but rather encourage innovation on a broader base. Finally, as tax incentives tend to encourage mainly marketable innovations rather than projects with a high social value, Germany should maintain direct research funding, notably by using public tenders. Ageing combined with a low level of tertiary education attainment will create significant shortages on the labour market limiting the development of new activities while reducing Germany’s attractiveness as an investment location (OECD, 2012).