This paper examines the origins of a knowledge-based economy in Germany by focusing on the two crucial decades 1867-1887, which saw the emergence of an academic-industrial symbiosis in organic chemistry with unique features, including favorable government policies, that made possible the emergence of a hybrid class of industrial scientists within an institutional network that could sustain both exponential growth in scientific knowledge and systematic product innovation on an unprecedented scale. By 1900 organic chemistry in Germany thus presented the classic model of an industrializing science, but as such it is perhaps somewhat misleading. Though widely envied or imitated in other contexts, it was never duplicated, and indeed by 1914 it was no longer fully applicable even in the field that created it.