This doctoral dissertation illustrates how the typically coordinated market economy of Germany fosters the creation of radical innovation. The findings of this thesis are in sharp contrast with theoretical expectations for the crucial case of Germany. The changes in the German institutional framework, including the labour market, corporate governance, financial institutions and skill creation since re-unification are illustrated. The influence of government policy on institutional change is analysed. Propositions of different approaches to the political and economic theory are discussed in the light of the findings. An enhanced theoretical framework for the support of new and emerging technologies in the coordinated institutional framework of Germany is established.