Introduction

Development of national innovation performance 

With respect to the situation in Europe, significant national differences are still observed. Figure I shows the Summary Innovation Index (SII) on the vertical axis and the average growth rate of the SII on the horizontal axis. Countries above the horizontal dotted line currently have an innovation performance above that of the EU25. Countries to the right of the vertical dotted line had a faster average increase in the SII than the EU25.
Based on their SII score and the growth rate of the SII, the countries included in the analysis can be divided into four groups or clusters:

• Sweden, Switzerland, Finland, Denmark, Japan and Germany are the innovation leaders, with SII scores well above that of the EU25 and the other countries. The lead of the innovation leaders has been declining compared to the average of the EU25, with the exception of Denmark.
• The US, UK, Iceland, France, Netherlands, Belgium, Austria and Ireland are the innovation followers, with SII scores below those of the innovation leaders but above that of the EU25 and the other countries. The above EU25 average innovation performance of the innovation followers has been declining. Also, the gap of the innovation followers with the innovation leaders has on average slightly increased.
• Slovenia, Czech Republic, Lithuania, Portugal, Poland, Latvia, Greece and Bulgaria make up the group of catching-up countries, with SII scores well below that of the EU25 and the innovation leaders, but with faster than average innovation performance improvement.
• Estonia, Spain, Italy, Malta, Hungary, Croatia and Slovakia seem to be trailing, with SII scores well below that of the EU25 and the innovation leaders, and innovation performance growth which is either below or only just above that of the EU25.

Cyprus and Romania form a separate fifth cluster of fast growing, catching-up countries.  Cyprus being one of the smallest EU countries and Romania starting from very low levels of innovation performance, this cluster is less robust than the other clusters, and is therefore not considered to be a meaningful cluster. Luxembourg, Norway and Turkey do not fit into any of these groups.

The gap between the US and the EU has decreased

The US and Japan are still ahead of the EU25 in terms of innovation performance, but the innovation gap between the EU25 and Japan, and in particular with the US is decreasing (see Figure II). The EU25 has improved its relative performance compared to the US in S&E graduates, tertiary education, business R&D, early-stage venture capital, medium-high and high-tech manufacturing employment, EPO patents, USPTO patents and community trademarks. The EU has improved its relative performance compared to Japan mostly in S&E graduates and broadband penetration rate. For business R&D, the share of medium/high-tech R&D and the employment share in medium/high-tech manufacturing, the EU has experienced a decline of its relative performance.

Figure II: EU25 innovation gap towards US and Japan

The vertical axis represents the difference between SII scores of EU25 and US & Japan respectively.

New indicators

The goal of the 2006 Methodology report was to further explore the different dimensions of innovation and to identify areas that are not covered in the EIS. The report has identified possible indicators of relevance to EU policy for measuring national innovative capabilities. The indicators could come from three sources: 1) existing data sources, including the CIS, 2) by making modifications to future versions of the CIS, and 3) by conducting new surveys to gather the necessary data. Table 3 in section 3.2 summarizes these indicators.

International comparison

The Global Innovation Scoreboard (GIS) report compares the innovation performance of the EU25 to that of other major R&D performing countries in the world: Argentina, Australia, Brazil, Canada, China, Hong Kong, India, Israel, Japan, New Zealand, Republic of Korea, Mexico, Russian Federation, Singapore, South Africa and the US. This comparison is based on a more limited set of 12 indicators rather than the set of 25 indicators of the EIS. The countries are classified first on the basis of their Global Summary Innovation Index (GSII) and then on the cluster results using multidimensional scaling. Based on the latter approach, one can identify 3 clusters including 6 or more countries and 5 mini-clusters including only 2 or 3 countries.

Innovation at the regional level

The Regional Innovation Scoreboard provides an update of the 2002 and 2003 regional innovation scoreboards. The Top-10 performing regions are Stockholm in Sweden, followed by Västsverige (SE), Oberbayern (DE), Etelä-Suomi (FI), Karlsruhe (DE), Stuttgart (DE), Braunschweig (DE), Sydsverige (SE), Île de France (FR) and Östra Mellansverige (SE). The Commission is planning a bi-annual Regional Innovation Scoreboard starting in 2007. Future updates of the RIS will focus on two main possibilities for improvement: improved data availability, in particular from the CIS-4 and an improved methodology.