Germany is grappling with a scientist "brain drain" as many of the brightest academic minds are moving away, an expert panel has warned in a report to Chancellor Angela Merkel.
"Germany is losing many of the best scientists through emigration," the government's commission of experts on innovation and research cautioned.
Some researchers return to Europe's top economy, but overall Germany is not attracting enough scientists of the same calibre as those who have gone abroad, the report said.
"The German research system doesn't seem to be attractive enough," said the report by a panel of six university professors.
Between 1996 and 2011, more than 23,000 active scientists emigrated, while about 19,500 came to work in Germany.
German scientists make up the biggest group of foreign researchers in many countries, including the US, Switzerland, Netherlands and Belgium, the report said.
To counter the trend, the experts advised the government to implement programs to seduce back leading scientists.
They also called for Berlin to push on with setting up centres of excellence within the German university system.
And they invited German research institutes to step up recruitment of foreign staff and to make every effort to keep them.
The report welcomed the fact that German spending on research and development is approximately at its target of three per cent of gross domestic product.
But it noted that German companies were increasingly spending their research budgets overseas.
Between 2009 and 2011, German companies' research and development expenditure outside of Germany jumped by more than 15 per cent a year, compared to a 5.7 per cent increase in Germany.
The report also criticised Germany's system of providing support to renewable sources of energy, which it said was a failure notably for triggering a sharp rise in costs.
Berlin is currently working on reforming the law that deals with subsidies for electricity production from renewable sources, financed by a surcharge on consumers.
