This year's Innovation Union Scoreboard shows that most Member States have improved their innovation performance. This allows the European Union to maintain a clear lead over the emerging economies of China, Brazil, India, Russia, and South Africa, but not to close the existing gap with innovation leaders such as the United States, Japan and South Korea. More efforts are therefore needed so as to address the EU's weaknesses. One area in the spotlight is related to firms' innovation activities.
The Innovation Union Scoreboard gives a comparative assessment of the research and innovation performance of the Union's 27 Member States (EU 27) and the relative strengths and weaknesses of their research and innovation systems. Its main purpose is to help European Union countries work out which areas they need to focus on to boost their innovation performance so as to improve their competitiveness in the global economy.
The Scoreboard should be looked at in the framework of Europe 2020, the strategy for the coming decade, which is designed to ensure smart, sustainable and inclusive growth for the EU's Member States by helping them to achieve objectives in areas such as employment, innovation, education, social inclusion and energy by 2020.
According to the Scoreboard, some Member States are already performing extremely well in the field of innovation not only at EU, but also at global level. However, the results are uneven throughout the EU. The analysis puts Member States into the following four country groups:
"This year’s results are a clear warning that more efforts to boost innovation are needed. If we want to close the gap with our main economic partners and to overcome the current crisis, innovation deserves all our attention," said Antonio Tajani, European Commission Vice-President in charge of Industry and Entrepreneurship. "In particular I count on enterprises as they have proven to be the key to success in innovation. But successful start-ups in other parts of the world show that some lessons still need to be learnt in Europe.”
In fact, at the top of this year's Scoreboard, all of the innovation leader countries have higher than average scores in public-private co-publications. This suggests that there are good linkages between the science base and enterprises. The most innovative countries also excel in the commercialisation of their technological knowledge, as shown by their good performance on license and patent revenues from abroad.
Another key factor that all EU innovation leaders - Finland, Sweden, Denmark and Germany - had in common is that they perform very well in terms of R&D expenditure, including those of firms, and in other innovation indicators related to firm activities.
The top European Union innovation performer Sweden dominates in three out of eight innovation areas: human resources, finance and support, and firm investments. Germany and Denmark were the best performers in two innovation areas each (linkages & entrepreneurship and intellectual assets versus innovators and economic effects).
At the bottom end of the Scoreboard, a common feature of the moderate and modest innovator countries is that they have unbalanced research and innovation systems. In particular, the numbers of SMEs in these countries that are introducing product or process innovations or marketing and organisational innovations is very low.
On average, the European Union still has a clear lead over the emerging economies of China, Brazil, India, Russia, and South Africa (the so-called BRICS countries) but China is fast catching up.
The European Union lags behind the United States, Japan and South Korea. The lead that these countries have has increased for South Korea, remained stable for the United States and decreased for Japan.
The United States and Japan are well ahead of the European Union on indicators relating to business activity and public-private cooperation: ‘R&D expenditure in the business sector’, ‘Public-private co-publications’, ‘License and patent revenues from abroad’ and ‘PCT patent applications’. South Korea is increasingly outperforming the EU27 and is furthest ahead in R&D expenditure in the business sector.
The area of ‘firm investments’ includes two indicators of both R&D and non-R&D investments that firms make in order to generate innovations. The area of linkages and entrepreneurship’ includes three indicators and measures entrepreneurial efforts and collaboration efforts among innovating firms and also with the public sector. The area of ‘intellectual assets’ captures different forms of Intellectual Property Rights (IPR) generated as a throughput in the innovation process.
The Innovation Union Scoreboard identifies the largest gap between the EU27 and its main competitors in the area of business sector innovation. With regard to this, another analytical tool produced by the European Commission, the Industrial R&D Investment Scoreboard, gives some interesting insight, by providing information on the world's top 1,400 companies (400 based in the European Union and 1,000 from outside) ranked by their investments in R&D.
In all, there are 15 European Union companies, 18 United States companies and 13 Japanese companies in the global top 50 companies in terms of total R&D investment.
Volkswagen (€6.3bn) is the highest placed European Union company, in sixth place followed by Nokia (11th with €4.9bn), Daimler (13th with €4.8bn) and Sanofi-Aventis (14th with €4.4bn).
More than two thirds of the R&D investment of companies on the R&D Investment Scoreboard was made by firms located in the three biggest economies of the European Union: Germany, France and the UK.
German companies showed the highest one-year growth (8.1%), mainly because of a few automotive companies (Daimler, Volkswagen and BMW). United Kingdom companies' R&D investment growth was 5.8%, which is close to the European Union average, compared to 3.8% for French companies.
In other Member States, a few large players account for high shares of R&D investment growth. These include Novo Nordisk (27.3%) and Vestas (49.8%) in Denmark and Banco Santander (56.3%), Telefonica (16%) and Amadeus (33.2%) in Spain. Fast growing companies such as TomTom (Netherlands) in the electronic equipment sector, Autonomy (UK) and Gameloft (France) in software and Morphosys (Germany) in biotech, were highlighted as strong performers in 2010.
"The upturn in R&D investment by European Union companies is a positive signal as we seek to boost growth and jobs through innovation in Europe. However, the fact that we are still lagging behind some global competitors shows we have to improve conditions for business further, in line with our Innovation Union goals," said Máire Geoghegan-Quinn, the European Union’s Commissioner for Research, Innovation and Science. "We need quick adoption and implementation of recent and upcoming European Commission proposals on the unitary patent, on standards, public procurement and risk capital," she added.
‘Policy Development for Industrial Innovation’ Unit,
Directorate-General for Enterprise and Industry