Innovation is key to European competitiveness. © PhotoDisc

“To maintain and improve Europe's living standards, Europe needs more innovation.” This is how the Commission explains the need for a new Action Plan for Innovation, especially if the Union wants to meet its Lisbon goal of becoming the world's most competitive economy by 2010. As it goes now, the EU still trails its major competitor, the USA, while competition from low-cost countries is mounting, the Enterprise and Industry DG explain on their Innovation Policy website.

The impact of ‘regulation' on innovation, the Commission continues, is important in balancing public concern against commercial opportunities, such as developing genetically modified (GM) agriculture. As for the treatment of ‘knowledge', several issues affect European innovation – among them, intellectual property rights, technology transfer, and how to improve networking between people and companies. ‘Innovation' also needs the right resources for venture capital to be freed up, regional disadvantages to be ironed out, and more investment in skills and lifelong learning, the Commission continues.

Findings that count
Meeting the Lisbon target revolves around a series of EU initiatives and policy decisions, such as the Growth Initiative and reinvigorated industrial policy. The new Innovation Action Plan will be an integral part of this strategy, the Commission comments, which includes the Barcelona plan to boost overall spending on research to 3% of GDP across the EU and the European Agenda for Entrepreneurship preceding it.

Findings from the latest Innobarometer survey, which evaluated public support of innovation from the European business perspective, but also the European Innovation Scoreboard (EIS), support the need for even greater vigour by European policy-makers and industry to remain competitive in R&D and innovation.

From the Innobarometer 2004 survey, we learned that 31% of innovative European firms use at least one form of public/government support for their innovation activities. However, only 12% of the 4 500 managers of small- and medium-sized enterprises (SMEs) in the EU, interviewed last year, use the innovation support measures that they are eligible for. At the top of that list, over 20% of Cypriot and Austrian firms took advantage of the innovation policies available to them. At the other end of the scale, Latvian, Czech and Luxembourg companies used them the least, all averaging below 7.2%.

In general, the survey suggests that EU innovation policy is successful in meeting the needs of innovative firms that, previously, were struggled to turn their innovations into commercial success. But if the goal of policy is to encourage less innovative SMEs to increase their capabilities in this area, “then the results would be discouraging because programme use is much greater among the more innovative SMEs”.

The Innobarometer 2004 was presented together with a special report of the EIS to tie in with analyses of the innovation performance of Member States and Associated Countries. The EIS 2004 confirms that the innovation gap between the EU and the USA has not narrowed since the Lisbon Agenda was adopted. America leads Europe in nine out of the 11 indicators used to compare innovation performance between the two.

“While Sweden and Finland maintain their leadership positions, they have lost momentum somewhat. Germany and Denmark are performing well above the EU average, with Denmark, in particular, moving ahead quickly. Other leading countries, such as the Netherlands, Ireland and France, are slowing down. Most of the new EU Member States are catching up, although from relatively low levels,” the Trend Chart website explains.