Competence Centre on Composite Indicators and Scoreboards

For over two decades, the European Commission has been tracking the annual performance of European Union (EU) countries using the European Innovation Scoreboard and for the past 10 years using as well the  Innovation Output Indicator, which focuses on tangible results of an innovation process, such as patents.

According to the most recent edition of the Innovation Output Indicator part of the INNOVA MEASURE V project,  Sweden and Germany top the list in terms of innovation output in 2021, whereas, the EU, as a whole, is still lagging behind the US, South Korea and Japan.

This year’s edition offers an analysis of start-ups and scale-ups and of the global innovation champions in the EU, which are becoming important actors of the European innovation landscape. It shows that start-ups are mainly present in the transportation and information and communication sectors, while scale-ups are more likely among large firms and among those that are part of an enterprise group.

The project also maps green and digital inventions and their relationship with foreign direct investment flows. Around 60-70% of the knowledge sourced for these inventions comes from outside the EU, particularly from the US and Japan, while patenting activity is highly concentrated in a few EU metropolitan areas, such as München, Paris, Eindhoven, and Stuttgart.

Looking further at the relationship between digital technologies and the UN Sustainable Development Goals (SDGs) in scientific publications, the project finds that this stream of scientific research is rapidly expanding. Most of the publications jointly address SDG7 on affordable and clean energy and the Internet of Things, and SDG13 on climate action and artificial intelligence.

“Sound and internationally comparable indicators on innovation are crucial for policy making. INNOVA looks for ways to adequately capture the full and evolving role of innovation in today’s economy” says Michela Bello, principal investigator of the INNOVA project at the JRC.

For more information, please get in touch at jrc-innova-project@ec.europa.eu

The results show how EU regions still need EU support to improve their competitiveness and narrow gaps between them.

Capital city regions are the most competitive in all EU countries except in Germany, Italy and the Netherlands. The gap with the other regions can be wide and is particularly high in France, Romania and Slovakia.

More competitive countries tend to have a smaller gap between their capital city region and the other regions. “This is a timely reminder that the performance of a country depends on all its regions: no team wins when half the players are still in the dressing room. So we must invest in all regions, adapting the policies to their different needs and assets to help them all fulfil their potential, and to stimulate multiple poles of competitiveness and growth and multiple sources of well paying jobs” said Commissioner Elisa Ferreira at the launch event.

Monitoring performance at regional level helps to see patterns that would otherwise be hidden in national averages. At EU level, there are already a few measures that offer a more granular view in issues like innovation, gender equality, social progress or tourism.

But what are the challenges when it comes to measure performance at sub-national level?

It’s an ambitious undertaking, in which data is by far the greatest challenge. In many cases, data is not available and national sample surveys are usually not representative at regional level.

On top of that, at EU level, the change in the Nomenclature of Units for Territorial Statistics (NUTS) also affects the comparability across different index editions.

Nevertheless, the team behind the Regional Competitiveness Index has found ways to overcome some of these issues. Since many official data are not available at regional level, they also rely on survey data, making sure to have an EU oversample so that it is possible to zoom in into EU regions without losing sample representativeness. To ensure comparability between regions across editions, the team back-calculates previous editions of the index. If there are changes in terms of territorial statistics units, the same value is assigned to regions that have been merged in the meantime or vice-versa. There are only very few cases in which regions remain non-comparable.

Lorena also formulates country-specific innovation policy recommendations and participates in related country missions and dissemination events following the GII annual rankings. She lives in a small French village just next to Geneva, Switzerland. She is Mexican by birth, Belgian by heart and loves Sweden thanks to her kids and husband. She enjoys listening to a good podcast or audiobook, and in her free time, she loves running in the countryside and cooking vegan food.

In short, how do you define innovation?

Innovation is about making things differently, creating and implementing new ideas, products or methods that can bring significant positive change to society.

What’s the story behind the creation of the Global Innovation Index?

The GII was created in 2007 to provide a comprehensive framework to measure and rank countries' innovation performance worldwide. The main idea was to go beyond traditional measures of innovation, such as research and development spending, and to include a broader range of factors, such as the quality of human capital, the strength and quality of institutions, the level of market and business sophistication and even softer measures such as creativity and intangible assets.  Nowadays, the GII is a widely recognised tool for policymakers, academics and businesses to benchmark and track innovation progress across countries and regions and to identify areas where improvements are needed to support innovation and drive economic growth.

What kind of reactions do you get to the Global Innovation Index? Was there a particular one that struck you?

Each year, we receive numerous reactions from policymakers in response to the publication of the GII. While many of these reactions relate to how we can improve innovation measurement, we are also seeing an increasing number from the general public. Recently, a high-school professor in India reached out to us after one of his 15-year-old students referenced the GII in class and asked about the factors driving innovation performance in India. For us, this interaction was a gratifying acknowledgement of our efforts to promote and normalise discussions around innovation and raise awareness of its significance in driving economic development. 

Is there anything that you wish to measure better than you can today?

Yes! We are particularly interested in measuring grassroots innovation activity to account better for the innovative activity in developing countries. These innovations can empower local communities and individuals to address their specific challenges and needs and can often be more effective and sustainable than top-down approaches. However, grassroots innovations are difficult to measure globally due to their context-specific and often undocumented nature. To address these measurement gaps, we are currently developing the idea of establishing the GII Data Lab with the aim to develop data experiments and to explore ways to scale up these experiments into possible comparable and replicable indicators that we can eventually include in the GII framework. Other areas of interest include innovation linkages and access to finance by private companies.

What’s your favourite innovation?

In post-pandemic times, “working from home” is my favourite innovation! Of course, technological advances have made it easier to work remotely and connect with colleagues from anywhere in the world. But most importantly, I believe this new way of working will further change the way organisations attract and retain their talent by ensuring we all commit to work without compromising a rich life aside from it. Isn’t that the dream?