1. Executive summary

This is the ninth edition of the European Innovation Scoreboard (EIS), which provides a comparative assessment of the innovation performance of EU27 Member States, under the EU Lisbon Strategy. The methodology for the 2009 EIS is identical to that of the 2008 EIS.

The EIS 2009 includes innovation indicators and trend analyses for the EU27 Member States as well as for Croatia, Serbia, Turkey, Iceland, Norway and Switzerland. Based on their innovation performance across 29 indicators, EU27 Member States fall into the following four country groups [1]:

• Denmark, Finland, Germany, Sweden and the UK are the Innovation leaders, with innovation performance well above that the EU27 average and all other countries. Of these countries, Germany and Finland are improving their performance fastest while Denmark and the UK are stagnating.
  
  
• Austria, Belgium, Cyprus, Estonia, France, Ireland, Luxembourg, the Netherlands and Slovenia are the Innovation followers, with innovation performance below those of the Innovation leaders but close to or above that of the EU27 average. Cyprus, Estonia and Slovenia have shown a strong improvement compared to 2008, providing an explanation why these countries have moved from the Moderate innovators in the EIS 2008 to the Innovation followers.
  
  
• Czech Republic, Greece, Hungary, Italy, Lithuania, Malta, Poland, Portugal, Slovakia and Spain are the Moderate innovators, with innovation performance below the EU27 average. The EIS 2009 Moderate innovators are a mix of 5 Member States which were Moderate innovators in the EIS 2008 and 5 Member States which were Catching-up countries in the EIS 2008.
  
  
• Bulgaria, Latvia and Romania are the Catching-up countries with innovation performance well below the EU27 average. All three countries are rapidly closing their gap to the average performance level of the EU27, and Bulgaria and Romania have been improving their performance the fastest of all Member States.
  

 

Summary innovation performance EU27 Member States (2009 SII) Note: The Summary Innovation Index (SII) is a composite of 29 indicators going from a lowest possible performance of 0 to a maximum possible performance of 1. The 2009 SII reflects performance in 2007/2008 due to a lag in data availability. The grey coloured columns show 2008 performance as calculated backward from 2009 using the next-to-last data for each of the indicators. This 2008 performance is not identical to that shown in the EIS 2008 as not for all indicators data could be updated with one year. The difference between the columns for 2008 and 2009 show the most recent changes in innovation performance. The SII scores are shown in Annex E.

 

This year’s assessment shows that there continues to be convergence amongst the groups, with Moderate innovators and the Catching-up countries growing at a faster rate than the Innovation leaders and Innovation followers.

Germany, Cyprus, Malta and Romania are the EU27 countries displaying the largest improvement within their peer groups (more detail in Section 3.2)
Within each of the country groups there is variation in growth performance, with Finland and Germany showing the best growth performance of the Innovation leaders. Cyprus, Estonia and also Slovenia are the fastest growing Innovation followers. Czech Republic, Greece, Malta and Portugal are the fast growing Moderate innovators and Bulgaria and Romania are not only the fastest growers among the Catching-up countries but also overall.

An impressive average annual growth rate over the last five years has led Estonia and Cyprus to catch up with the EU27 average innovation performance in 2009 (Section 3.1)
Both Cyprus and Estonia have improved their performance from below the EU27 average in the EIS 2008 to an above average performance in the EIS 2009. For Cyprus strong growth in Finance and support, Linkages & entrepreneurship and Throughputs have been the main drivers of its improvement in innovation performance. For Estonia strong growth in Firm investments and Throughputs have been the main drivers of its improvement in innovation performance.

Although the EU27 has been, overall, improving its innovation performance, the economic crisis may threaten this good progress, particularly in lower performing countries having shown high rates of improvement in their innovation performance (Section 3.4 and Section 4)
The EU27 is making overall progress, with particularly strong increases in the numbers of graduates in science, engineering, social sciences and humanities, venture capital, private credit, broadband access, community trademarks, community designs, technology balance of payments flows and sales of new-to-market products. The strong increases in venture capital and private credit most likely do not yet capture the impact of the economic downturn in 2008.
However, the economic crisis may lead to a reversal of the convergence between EU27 countries in innovation performance. The 2008 European Innovation Scoreboard showed a clear process of convergence between EU27 Member States. The 2009 Scoreboard does not capture any possible impacts of the crisis, as most data come from 2007 and 2008. However, data from the 2009 Innobarometer survey suggests that the rapid advances in innovation performance made in many lower performing countries may not be maintained, at least in the short term, due to the severity of the economic crisis.

The catching up in the innovation gap with the US and Japan has ceased or even reversed (Section 5.1)
The 2009 EIS includes a separate analysis of the EU27 performance compared with the United States and Japan based on a set of comparable indicators. This shows that there has been a continued improvement in the EU27's performance relative to the US and a stable performance gap relative to Japan. Nevertheless, there remains a significant gap between the EU27 and these two other countries and catching up with the US seems to have flattened out.

 

EU27 Innovation gap towards US and Japan
Performance for each reference year is measured using, on average, data with a two-year lag (e.g. performance for 2009 is measured using data for 2007).

This remaining gap is explained primarily in four areas: international patenting (as measured under the patent cooperation treaty), public private linkages and numbers of researchers (despite the improvements in both these areas), and business R&D expenditures (where both EU27 and US values have stagnated, while Japan's have increased).

 

EU27 innovation lead towards the BRIC countries
Strong and stable lead to Brazil	Declining lead to China
Strong but slowly declining lead to India	Stable lead to Russia
Performance for each reference year is measured using, on average, data with a two-year lag (e.g. performance for 2009 is measured using data for 2007).

From within the BRIC countries, China displays the strongest performance (Section 5.2). The EU27 must continue to find ways to turn this performance into growth opportunities
The EU27 has a strong lead compared to each of the BRIC countries, in particular towards Brazil and India. The performance lead towards Brazil has remained stable and that towards Russia has slightly improved. China and India are both catching-up towards the EU27. The rate of relative improvement for India is more modest than that for China, but China is showing a rapid rate of relative improvement and its performance gap has decreased strongly. Simply extrapolating China’s speed of catching-up over the last 5 years could indicate a closure of the performance gap with the EU27 in the (very) near future.

This year’s thematic reports have dwelled on the subjects of: long term patterns of innovative performance, user innovation, internationalisation and innovation and regional innovation performance [2]. The following highlights emerge from these thematic reports:

There are only small differences in innovation between manufacturing and services (Section 6.1)
A sectoral analysis for 8 major European countries shows that there are only limited differences between manufacturing and services sectors. Whereas for services sectors innovative sales are supported by growing demand and technology adoption, for manufacturing sectors it is firm size which drives innovative sales.

More than half of innovating firms involve users in innovation activities (Section 6.2)
While a substantial minority of innovative firms in the EU27 are involved in product and process modification (about 30%), more than half of these firms involve users in support of their innovative activities. User innovation is more or less evenly spread across industrial sectors and across countries. Innovators engaged in user innovation can be classed as “super-innovators”. Compared to other innovation firms involving users are more likely to introduce new products, processes or services and to perform R&D and apply for patents.

Internationalization and innovation performance closely linked (Section 6.3)
Research suggests that there seems to be a causal relationship between inter­natio­nalization and innovation leading to a cumulative process where innovation and internationalization may affect each other in either a virtuous or vicious circle. This calls for more alignment between policies aimed at supporting innovation and those aimed at supporting firms’ international activities.

Strong diversity in regional innovation performance across Europe (Section 6.4)
The 2009 Regional Innovation Scoreboard (2009 RIS) adopts the European Innovation Scoreboard approach at regional level and provides a richer analysis compared to previous reports due to the availability of more comprehensive regional Community Innovation Survey data. The analysis shows that all major EU27 countries have diverse levels of performance and relative strengths within their regions, and that Spain, Italy and the Czech Republic are the most heterogeneous. The 2009 RIS marks a significant step forward in measuring regional innovation performance although it also shows that more progress is needed on the availability and quality of innovation data at regional level.