Higher marks for EU innovation

Europe is catching up with its main economic rivals – the US and Japan – in innovation performance, according to an EU study.

Switzerland is the leader in innovation, followed by Sweden, Finland, Germany, Denmark and the UK. All six countries have scores well above those of other European countries and of the EU as a whole. EU newcomers had some of the highest rates of improvement – especially Cyprus, Romania and Bulgaria – even though their performances remain below the EU average.

The trends are highlighted in the 2008 European innovation scoreboard. Based on data from before the financial crisis, this study uses 29 indicators to gauge a country’s level of innovation – an essential motor for economic growth and for addressing challenges like climate change. Indicators include the popularity of science and engineering degrees, number of patents, level of spending on research & development (R&D), availability of venture capital for new businesses and strength of high-tech exports.

The EU has made large strides compared with five years ago. Although it still trails the US and Japan, the gap is closing, though, with the US, not as fast as before. The EU has also fared relatively well with respect to emerging economies such as China, India and Brazil.

However, weaknesses persist. The EU lags behind the US in business investment and behind Japan in bringing innovation to R&D and information technology. EU companies are also spending less on non-technological innovation such as training, design and marketing – all important to staying competitive.

The study was published in parallel with a report on the EU’s progress in R&D investment in the EU and on efforts to create a European research area. It shows that Europe’s pool of researchers is growing and the EU is becoming more attractive for foreign researchers and for private R&D investments from the US. But it also reveals that spending on R&D has stagnated at 1.84% of GDP, well below the EU target of 3%.