EU Member States Narrowing Innovation Gap With United States

by Ulrika Lomas, for LawAndTax-News.com, Brussels

26 February 2007

The European Commission announced last week that for the fourth consecutive year, the innovation gap between the US and the EU has decreased.

According to the EC, the Nordic countries and Switzerland continue to be the innovation leaders worldwide, while many of the new Member States are steadily catching up with the EU average.

These are some of the main findings of the European Innovation Scoreboard 2006, published on Thursday. The report presents a comparative analysis of the innovation performance of European countries, the US and Japan.

Commissioned by the Directorate-General for Enterprise and Industry of the European Commission, the European Innovation Scoreboard is prepared by the Maastricht Economic Research Institute on Innovation and Technology (MERIT) assisted by the Joint Research Centre of the European Commission.

As in previous editions of the European Innovation Scoreboard, national performances differ. Based on their overall innovation score and their recent historical trend, the authors grouped the countries in four categories, namely:

• Innovation leaders: Sweden, Switzerland, Finland, Denmark, Germany and Japan.
• Innovation followers: UK, Iceland, France, Netherlands, Belgium, Austria, Ireland, US.
• Catching-up countries: Slovenia, Czech Republic, Lithuania, Portugal, Poland, Latvia, Greece, Bulgaria, Cyprus and Romania.
• Trailing countries: Estonia, Spain, Italy, Malta, Hungary, Croatia and Slovakia.
• Luxembourg, Norway and Turkey would not fit in any of these categories.

The European Innovation Scoreboard measures the innovation performance of a country’s economy based on a wide range of indicators, from education to expenditure in Information and Communication Technologies, investment in R&D or number of patents.

Countries with a more homogeneous behavior in all aspects of innovation tend to achieve higher overall scores.

The report suggests that there is a process of convergence in the innovation performance of Member States, which means that catching-up countries are closing the gap with the EU average, and both country groups of innovation leaders and followers are experiencing a relative decline in their innovation lead.

Commenting on the EU's performance in this area in comparison with the United States, the EC announced that:

"While the innovation gap with the US has been decreasing steadily for the last four years, it still exists. This gap can be largely explained by the superior US performance in early-stage venture capital availability, share of population with tertiary education and number of US patents. The gap between the EU and Japan is also decreasing and the factors explaining the remaining gap are similar. "

Recommended