Europe’s innovation performance continues to converge

Comparison with the US shows America still an overall lead and the catching up process that was visible, in particular, in information and communication technology investments, broadband penetration, early-stage venture capital and international patenting has recently slowed down.

Commission Vice President Günter Verheugen, who is responsible for enterprise and industry policy, said the continued improvement in innovation performance offers evidence the Lisbon process and the broad-based innovation strategy are working. “But the apparent slowdown in catching up with the US and in particular the increasing gap in public research and development show that reinforced efforts are needed if we are to create more world class innovation in Europe,” he said.

The EIS provides an annual assessment of innovation performance across the EU and with other leading innovative nations. The assessment is based on a wide range of indicators covering structural conditions, knowledge creation, innovation within companies, and outputs in terms of new products, services and intellectual property.

The report shows that countries form four relatively stable groupings based on their performance over a five-year period:

• The innovation leaders, with Sweden as the most innovative country, and other countries including Denmark, Finland, Germany, Israel, Japan, Switzerland, the UK and the US.
  
  
• The innovation followers include Austria, Belgium, Canada, France, Iceland, Ireland, Luxembourg and the Netherlands.
  
  
• The moderate innovators include Cyprus, Czech Republic, Estonia, Italy, Norway, Slovenia, Spain and Australia.
  
  
• The catching-up countries include Bulgaria, Croatia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania and Slovakia. Turkey is currently at a lower level of performance.

Convergence within the EU and with the US and Japan

Within the EU, the report shows there is a strong process of convergence with the moderate innovator and catching-up countries improving faster than average.

The comparison with the US shows that the lead over the EU, although still very significant, has been gradually decreasing over the last five years, particularly in the areas of ICT investments, broadband penetration, early stage venture capital and international patenting.

However, the US is pulling ahead in the areas of public R&D expenditure and high technology exports. Meanwhile, the gap between the EU and Japanese innovation performance has also decreased, particularly in science and engineering graduates and broadband penetration.

Innovation efficiency: transforming knowledge into innovation

The report also assesses innovation efficiency for the first time and finds that most EU countries could make improvements in transforming knowledge inputs into innovation outputs. The most efficient performers are Germany and Luxembourg. All other member states have significant scope to improve through policies that stimulate the generation of innovative applications and intellectual property.