Germany's €4.6-billion (US$5.6-billion) Excellence Initiative has not helped universities to distinguish themselves, according to a briefing (go.nature.com/nsjpca) released on 22 June by the Social Science Research Center Berlin (WZB). The report says that institutions are concentrating on basic research to the detriment of teaching and applied research. “When we talk about excellence, we also have to talk about conditions for excellent teaching,” says co-author Dagmar Simon, head of science-policy studies at the WZB. The scheme to make Germany's university system more competitive is in its second phase (see Nature 487, 519–521; 2012).