How to Boost the EU’s Innovation Performance

By: Innovation Management

This year’s Innovation Union Scoreboard shows that most Member States have improved their innovation performance. This allows the European Union to maintain a clear lead over the emerging economies of China, Brazil, India, Russia, and South Africa, but not to close the existing gap with innovation leaders such as the United States, Japan and South Korea. More efforts are therefore needed so as to address the EU’s weaknesses. One area in the spotlight is related to firms’ innovation activities.

The Innovation Union Scoreboard gives a comparative assessment of the research and innovation performance of the Union’s 27 Member States (EU 27) and the relative strengths and weaknesses of their research and innovation systems. Its main purpose is to help European Union countries work out which areas they need to focus on to boost their innovation performance so as to improve their competitiveness in the global economy.

The Scoreboard should be looked at in the framework of Europe 2020, the strategy for the coming decade, which is designed to ensure smart, sustainable and inclusive growth for the EU’s Member States by helping them to achieve objectives in areas such as employment, innovation, education, social inclusion and energy by 2020.

The main results within the EU

According to the Scoreboard, some Member States are already performing extremely well in the field of innovation not only at EU, but also at global level. However, the results are uneven throughout the EU. The analysis puts Member States into the following four country groups:

• Innovation leaders: Sweden, Denmark, Germany and Finland.
• Innovation followers: Belgium, the UK, Netherlands, Austria, Luxembourg, Ireland, France, Slovenia, Cyprus and Estonia with a performance close to that of the EU27 average.
• Moderate innovators: Italy, Portugal, Czech Republic, Spain, Hungary, Greece, Malta, Slovakia and Poland perform below the EU27 average.
• Modest innovators: Romania, Lithuania, Bulgaria and Latvia are well below the EU27 average.

“This year’s results are a clear warning that more efforts to boost innovation are needed. If we want to close the gap with our main economic partners and to overcome the current crisis, innovation deserves all our attention,” said Antonio Tajani, European Commission Vice-President in charge of Industry and Entrepreneurship. “In particular I count on enterprises as they have proven to be the key to success in innovation. But successful start-ups in other parts of the world show that some lessons still need to be learnt in Europe.”

Public-Private partnerships increase innovation

In fact, at the top of this year’s Scoreboard, all of the innovation leader countries have higher than average scores in public-private co-publications. This suggests that there are good linkages between the science base and enterprises. The most innovative countries also excel in the commercialisation of their technological knowledge, as shown by their good performance on license and patent revenues from abroad.

Another key factor that all EU innovation leaders – Finland, Sweden, Denmark and Germany – had in common is that they perform very well in terms of R&D expenditure, including those of firms, and in other innovation indicators related to firm activities.

The top European Union innovation performer Sweden dominates in three out of eight innovation areas: human resources, finance and support, and firm investments. Germany and Denmark were the best performers in two innovation areas each (linkages & entrepreneurship and intellectual assets versus innovators and economic effects).

At the bottom end of the Scoreboard, a common feature of the moderate and modest innovator countries is that they have unbalanced research and innovation systems. In particular, the numbers of SMEs in these countries that are introducing product or process innovations or marketing and organisational innovations is very low.

The EU compared to its major global competitors

On average, the European Union still has a clear lead over the emerging economies of China, Brazil, India, Russia, and South Africa (the so-called BRICS countries) but China is fast catching up.

The European Union lags behind the United States, Japan and South Korea. The lead that these countries have has increased for South Korea, remained stable for the United States and decreased for Japan.

The United States and Japan are well ahead of the European Union on indicators relating to business activity and public-private cooperation: ‘R&D expenditure in the business sector’, ‘Public-private co-publications’, ‘License and patent revenues from abroad’ and ‘PCT patent applications’. South Korea is increasingly outperforming the EU27 and is furthest ahead in R&D expenditure in the business sector.

The area of ‘firm investments’ includes two indicators of both R&D and non-R&D investments that firms make in order to generate innovations. The area of linkages and entrepreneurship’ includes three indicators and measures entrepreneurial efforts and collaboration efforts among innovating firms and also with the public sector. The area of ‘intellectual assets’ captures different forms of Intellectual Property Rights (IPR) generated as a throughput in the innovation process.