The article provides an evaluation of the role of universities for the West German innovation system. It considers both research and education. On the whole, the balance is mixed. The higher education system, although in principle clinging to the ideals of Humboldt, was flexible enough to accommodate rapidly growing student numbers in the 1960s and 70s. Research was not driven out of universities, but universities lost ground in the competition with extra-mural research institutes. The links between universities and industry were stronger in the 1950s and 1960s than in the 1970s and 1980s. Efforts at improving knowledge transfer since the 1970s can be seen as attempts to make up for loosening informal ties. An assessment of the contribution of universities to labour productivity casts doubt on the assumption that a shortage of human capital acted as a break on economic development.