European countries must work together on next-generation chip manufacturing, Angela Merkel said, drawing on her 16 years of experience in the highest office to warn that no European country could stay at the forefront of high-tech on its own.

The outgoing German chancellor told Reuters in an interview that the costs of moving to the next level in areas from chip development to cloud and quantum computing and battery production meant that the private sector would need state support.

Merkel herself conducted fundamental research in quantum chemistry in East Germany before entering politics after German reunification in 1990. She pointed to Korea, Taiwan and U.S. President Joe Biden’s stimulus package as examples of what was possible.

“The state will have to play a significant role. South Korea and Taiwan go to show that competitive chip production in the 3- or 2-nanometer range, for example, is essentially impossible without state subsidies,” she said.

The global economy’s current struggle to restore supply chains snapped by resource shortages and the coronavirus pandemic further highlights the need to ensure that Europe has its own production facilities in key areas, she said.

But she also lamented the failure of German companies to capitalise on an outstanding research base.

In particular, she said she was “shocked” at German companies’ lack of interest in quantum computing, even though Germany was a world leader in research in a field that could make computers faster and more powerful than ever before.

NO ALEXA FOR ANGELA

She said her government had made steps towards improving Germany’s innovation and start-up cultures, pointing to a German-led project to create a secure and efficient cloud data infrastructure for Europe, named Gaia-X.

“But in the long term it cannot be the state that drives new developments,” the European Union’s longest-serving leader said.

Germany’s sprawling, decentralised government structure could also be a hindrance to innovation.

Merkel said the presence of an ethics council and data protection officer in each of the 16 federal states put a heavy burden on firms in life sciences, for instance, where Germany had fallen behind.

It was, however, at the leading edge of research in areas such as quantum physics, climate research, physics, chemistry and robotics, she said.

Not that the same could be said for Merkel’s own use of home technology.

“I’m happy enough when I can set up a delayed start on my washing machine, but beyond that, to be honest, I have neither the time nor the inclination to have my whole home remote-controlled,” she said.

“Maybe I’ll develop an interest when I have more time in the near future.”