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Perspective and innovative companies in Europe are the background of resilient, diversified and modern single market. The EU is trying to use all its potentials in improve “innovation climate” and its quality in the global innovation race. However, statistical account in the newly published innovation scoreboard, as well the complicated nature of innovation, needs some comments…
Background
The new European innovation agenda, launched in 2022, is aimed at bridging the innovation gap among the EU member states and neighboring countries by accelerating the development of cutting-edge technologies and fostering a dynamic environment for startups and established businesses. Substantial efforts have been made in carrying forward initiatives under the Agenda’s key priorities, such as implementing new directives in the financial sector, introducing new mechanisms and funds to encourage venture capital, and providing training opportunities for deep tech talent.
The European Innovation Scoreboard-2024 published recently shows that the EU states’ innovation performance is constantly improving: i.e. since 2017 it increased by ten percent; specifically, with a growth rate at 0.5 percent between 2023 and 2024. According to the 2024 edition of the scoreboard, most EU states have boosted their innovation performance; however, the increase is very diverse among the member states.
Innovation scoreboard
The European Innovation Scoreboard, EIS is an annual publication by the European Commission that provides a comparative assessment of the research and innovation performance of EU member states, neighbouring European countries and selected global competitors.
The scoreboard aims to support policymakers, researchers, and stakeholders in understanding the innovation landscape, finding strengths and weaknesses, as well as formulating evidence-based policies to enhance innovation across Europe; the scoreboard is published annually since 2001.
The EIS is based on 32 indicators covering the economy, business and entrepreneurship, innovation profiles, governance and policy framework, climate change and demography.
The EIS-2024 covers all EU states, 12 neighbouring European countries (including Moldova for the first time) and, with a smaller set of indicators, another 11 global competitors.
The EIS 2024 categorizes the EU states in four innovation groups based on their scores:
= Innovation leaders (4 states with the performance above 125 percent of the EU average: Denmark, Sweden, Finland and Netherlands),
= Strong innovators (8 states with 100-125 percent of the EU average: Belgium, Austria, Ireland, Luxembourg, Germany, Cyprus, Estonia and France),
= Moderate innovators (9 states with 70-100 percent of the EU average: Slovenia, Spain, Czechia, Italy, Malta, Lithuania, Portugal, Greece and Hungary), and
= Emerging innovators (6 states with innovation performance below 70 percent of the EU average: Croatia, Poland Slovakia, Latvia, Bulgaria and Rumania).
Most EU member states have increased their innovation performance since 2017; although all states, except Luxembourg, have experienced an increase in their innovation performance; though the extent of improvements varies strongly. On the one hand, Romania, France, Ireland, Slovakia, Latvia, Bulgaria, Germany, Portugal, Austria and Slovenia displayed increases of less than 5%-points over the period 2017-2024. On the other hand, 11states experienced faster performance growth than the EU’s average over the same period, with Cyprus and Estonia displaying the most notable improvements (+39%-points and +27%-points respectively).
The EIS-2024 is accompanied by an updated and revamped interactive tool which offers customized comparisons visualizing country profiles and showcasing relative strengths, weaknesses and trends, as well as exploring correlations between indicators.
Main achievements in innovation
Between 2023 and 2024, innovation performance increased in 15 EU states while it has declined for another 11 states (Croatia remained stable). Compared to the last edition, Denmark remained the most innovative EU country followed by Sweden, which led the EU-wide rankings during 2017-2022. Two countries now belong to a different performance group: i.e. Estonia became a “strong innovator” following a steady growth pattern since 2017; Belgium, which was an “innovation leader” in 2023, moved down to the “strong innovator” category, although it maintained its fifth position in the overall ranking.
A broader analysis, including other European countries and selected global competitors, shows a changing international landscape: Switzerland as the most innovative European country and South Korea as the most innovative global competitor in 2024, while China has surpassed Japan and is progressively closing the EU average with about 110 percent.
In the global context, as the Commission acknowledged, the EU maintained a “robust position, demonstrating strong performance in most indicators including in SMEs introducing product and process innovations and environment-related technologies”. However, the EU still faces challenges compared to its main global competitors in areas such as intellectual assets, collaboration among innovative SMEs and R&D expenditure in the business sector.
References to the Commission’s press release in: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3666
Grades in innovation performance
There are four main “grades” in the EU-wide innovation performance: the states with the so-called innovation leaders’ grade have particularly attractive research systems and are strong in digital transition. The “strong innovators” demonstrate significant strengths in their innovation systems, concerning product and business innovations.
Among the EU states with the “moderate innovator” grade, there is a range of positive trends, in particular the development of collaboration in research; whereas “emerging innovators” have shown an overall positive trajectory in innovation performance, but they are still lagging the “moderate”.
Although the performance differences have slightly narrowed among the “strong and moderate innovators” during last seven years, they became more pronounced among the “innovation and emerging” ones. There are also strong geographic differences in innovation performance, with “leaders and strong innovators” mainly located in Northern and Western Europe, and many of “moderate and emerging innovators” – in Southern and Eastern Europe.
Main source: https://research-and-innovation.ec.europa.eu/document/download/dbcecc41-f9b1-4e7e-a75f-1be689d811ad_en
Commission’s opinion: citations
= “This year’s European Innovation Scoreboard confirms that the EU is an industrial and research powerhouse. In today’s global race for resilience and competitiveness, it has all it takes to position itself as a standard-setter and technological hub. Now we need to build on this technological edge to be industrial and commercial leaders in the markets of tomorrow. Resilient and diversified supply chains and a modern Single Market will remain at the core of well performing and innovative companies that create jobs for Europeans”.
Thierry Breton, Commissioner for Internal Market
= “The European Innovation Scoreboard-2024 shows that the EU has made significant progress in innovation performance in recent years. However, innovation divide persists among the member states; the EU also has potential to improve its standing in the global innovation race. We must continue our efforts, particularly in striving for more private investment in research and innovation”.
Iliana Ivanova, Commissioner for Innovation, Research, Culture, Education and Youth
Source: Commission’s press release in: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3666
More information in the following Commission’s websites: = European Innovation Scoreboard (EIS) 2024; = European Innovation Scoreboard 2024– Executive summary; = Questions and Answers on the European Innovation Scoreboard (EIS) 2024; = EIS 2024 – Annex B (performance per indicator); = EIS 2024 Methodology Report; = EIS 2024 – EU countries and neighbouring countries database; and = EIS 2024 – EU and global competitors database.
Our comments
Innovation performance statistics needs a thorough understanding as the issue has: first, the global aspects of innovation; and second, its integral components (the so-called anatomy of innovation”), and third, tracing the connections with the national political-economic priorities.
1. On the global innovation path, the “index” is an annual ranking of countries by their capacity for, and success in, innovation, which is published by the World Intellectual Property Organization, WIPO; it measures innovation based on such criteria that include institutions, human capital and research, infrastructure and financial facilities (like credit and investment), as well as some other factors, e.g. creation, absorption and diffusion of knowledge and innovation’s creative outputs.
There are generally five recognized steps for measuring innovation (for any innovation idea): – collecting and tracking the ideas; estimating costs and benefits involved; measuring the implementation; calculating the idea’s added value; and determining the innovation rate in the organization/company and/or state. These indicators measure any company/state’s innovation activities which commonly include R&D coverage, “momentum value”, as well as innovation’s potential, commercial effect and socio-economic influence. Thus, globally, Switzerland has retained presently its first rank for the 13th year, Sweden’s second, followed by the US on the third place.
Source: https://www.wipo.int/global_innovation_index/en/2023/
2. The analysis of innovation has to be complemented by certain integral components: thus, innovation performance and effect include the so-called “innovative climate” in the national scientific community, as well as the level of public support. Science, generally, is divided into two main parts – fundamental and applied; the latter has been subject to fundamental transitions affected by the world-wide sustainable development goals, SDGs and climate mitigation measures, both in effect from 2015-16 (hence, the main time span in assessing present innovation covers the last seven years. The national “attention” to the SDGs implementation greatly facilitates the innovation process: both because of the SDGs “innovative” nature and the scientific efforts in dealing with SDGs and climate mitigation. That explains good ranking of four states among “innovation leaders” -Denmark, Sweden, Finland and Netherlands- each of them with significant impetus into innovative sectors (renewables, digital, environmental, etc.).
3. National priorities are main drivers and great facilitators in the innovation’s progress: thus, the EU states that “explore” the SDGs and contemporary transformations in political economy are getting advances in the innovative scores. Modern approaches to innovation, particularly through the new wave of deep-tech innovation, are based on reducing greenhouse gas emissions, making national economies more digital and guaranteeing the EU-wide food, energy and raw materials security. Therefore, recently adopted EU-wide innovation agenda of July 2022 is aimed at putting the states’ political economies at the forefront of the new wave of deep tech innovation and start-ups’ agenda, and assisting the states in developing new technologies to address most urgent social problems through innovation procurement, modernization of public services with innovative solutions while boosting growth of innovative companies. The states shall support the best “talent work” and the best companies with deep tech-innovation that create innovative solutions in most perspective socio-economic spheres.
More on Innovation Agenda and its five focal directions in: https://research-and-innovation.ec.europa.eu/strategy/support-policy-making/shaping-eu-research-and-innovation-policy/new-european-innovation-agenda_en
Finally, the member states’ innovative activity is part of the EU-wide integration process: thus, e.g. under the Horizon Europe program, the EU-wide innovation projects will contribute to three main innovative agenda’s directions: a) scaling up deep-tech innovative companies; b) enabling innovation through experimentation spaces and innovative public procurement; and c) strengthening innovation systems in the member states and reducing the innovation divide.