MEMO/08/87

Brussels, 14^th February 2008

European Innovation scoreboard 2007: Summary of the situation in the 27 Member States

This memo provides a synopsis of the innovation performance of the different Member States. This analysis is taken from European Innovation Scoreboard and thematic papers on Innovation in Services and on Innovation Efficiency. Commissioned by the Directorate-General for Enterprise and Industry of the European Commission, the European Innovation Scoreboard is prepared by the Maastricht Economic and social Research and training centre on Innovation and Technology (MERIT) assisted by the Joint Research Centre of the European Commission.

Overall innovation performance is calculated on the basis of 25 indicators covering five dimensions of innovation (see Table 1):

• Innovation drivers measure the structural conditions required for innovation potential;
• Knowledge creation measures the investments in R&D activities;
• Innovation & entrepreneurship measures the efforts towards innovation at the firm level;
• Applications measures the performance expressed in terms of labour and business activities and their value added in innovative sectors; and
• Intellectual property measures the achieved results in terms of successful know-how.

Based on performance over a five year period, four main groupings of countries emerge (see Table 2):

• Sweden, Switzerland, Finland, Israel, Denmark, Japan, Germany, the UK and the US are the innovation leaders, with scores well above that of the EU27 and most other countries. Sweden is the most innovative country, with the highest score of all countries
• Luxembourg, Iceland, the Netherlands, Ireland, Austria, France, Belgium and Canada are the innovation followers, with scores below those of the innovation leaders but equal to or above that of the EU27.
• Australia, Estonia, Slovenia, Norway, Czech Republic, Italy, Cyprus and Spain are the moderate innovators with scores below that of the EU27.
• Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Croatia, Bulgaria, Portugal, Latvia and Romania are the catching-up countries. Although their scores are significantly below the EU average, these scores are increasing towards the EU average over time with the exception of Croatia. Turkey is performing below the other countries.

As part of the 2007 European Innovation Scoreboard, assessments were made of trends in innovation performance see Table 3 - and the innovation efficiency with which countries transform innovation inputs into outputs (see Table 4).

Country performances

Austria

Austria is in the group of "innovation follower" countries whose innovation performance is above the EU average but below the "innovation leader" countries. Other EU countries in this group which therefore have a similar level of performance are Belgium, France, Ireland, Luxembourg and the Netherlands. Its innovation performance has improved over the last 5 years relative to the EU average.

Within the five dimensions of innovation, Austria performs well above the EU average in the Knowledge Creation and Intellectual Property dimensions, with relatively high levels on indicators of R&D expenditure, patenting and numbers of Community trademarks and industrial designs. However, Austria has relative weaknesses in Innovation Drivers, due to lower levels of tertiary education and lifelong learning, and in Applications stemming from lower employment in high-tech services, and lower shares of new to firm and new to market products. Austria has above average efficiency in transforming innovation inputs into outputs.

Belgium

Belgium is in the group of "innovation followers" and its innovation performance is just above the EU average, but below the "innovation leader" countries. Other EU countries in this group with a similar overall level of performance are Austria, France, Ireland, Luxembourg and the Netherlands. Its innovation performance has declined relative to the average EU growth rate in the last five years.

Within the five dimensions of innovation, Belgium performs above the EU average on the Knowledge Drivers, Innovation and Entrepreneurship, and Intellectual Property. It is below EU average in Knowledge Creation, with a relatively lower level on the indicator of R&D expenditure, and in Applications where it is relatively low on the indicator of exports of high technology products, and sales of new to firm and new to market products. Belgium is above average in the efficiency of transforming innovation inputs to Application outputs but below average for Intellectual Property outputs.

Bulgaria
Bulgaria is included in the group of "catching-up countries", with an overall innovation performance that is below the EU average. Other EU countries in this group which have a similar level of performance are Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Latvia and Romania. Its innovation performance over the last five years has increased relative to the EU average and would converge to the EU average in around 20 years if current trends continue.

Bulgaria performs relatively well on the Innovation Drivers dimension, where it is above the EU average on the indicator of youth education attainment level. It has a relatively weaker performance in the Intellectual Property dimension. Bulgaria is also below the EU average in terms of its innovation efficiency in transforming innovation inputs into Applications and Intellectual Property outputs. Bulgaria has a high level of non-R&D innovators (companies that innovate without conducting formal R&D activities).

Cyprus

Cyprus is one of the "moderate innovators" group of countries, with an overall innovation performance that is below the EU average but above the level of the "catching up countries". The other EU "moderate innovator" countries are Estonia, Czech Republic, Slovenia, Italy and Spain. Cyprus' innovation performance has improved over the last five years compared to the EU average and its performance would converge with the EU average in about 10 years if current trends continue.

Cyprus has a relatively strong performance in the Innovation & Entrepreneurship dimension, where it is ranked third in the EU. In particular, it has a relatively high level on the indicators of SMEs innovating in-house, innovative SMEs cooperating with others, innovation expenditure and SMEs using organisational innovation. It has a relative weaker performance in the Applications dimension, with low levels on the indicators of employment in high-tech services, sales of new-to-market products, sales of new-to-firm products and employment in medium-high/ high-tech manufacturing. Cyprus has an above average efficiency in transforming innovation inputs into Intellectual Property outputs, but a below average efficiency for Applications outputs.

Czech Republic

The Czech Republic is among the group of "moderate innovators" with an overall innovation performance that is below the EU average but above the level of the "catching up countries". The other EU "moderate innovator" countries with similar levels of performance are Estonia, Slovenia, Italy, Cyprus and Spain. The Czech Republic's innovation performance has improved over the last five years compared to the EU average and its performance would converge with the EU average in about 10 years if current trends continue.

The Czech Republic has a relatively strong performance in the Applications dimension, and has high levels on indicators of sales of new-to-market products, sales of new-to-firm products and employment in medium-tech/ high-tech manufacturing. It has relative weaknesses in the Innovation Drivers and the Intellectual Property dimensions. The Czech Republic has above average efficiency in transforming innovation inputs into Application outputs, but is below average in the efficiency of transforming such inputs into Intellectual Property outputs.

Denmark

Denmark is amongst the “innovation leaders” with an overall innovation performance well above the EU average. Other EU countries in this group are Sweden, Finland, Germany and the UK. Denmark has a negative trend in its innovation performance over the past 5 years compared to the EU average.

Denmark has the highest position in the Innovation Drivers dimension of innovation, where it is particularly strong on the indicators of population with tertiary education, broadband penetration rate, and participation in life-long learning. It has a relative weakness in the Applications dimension where it is below the EU average, where it is below average on indicators of exports of high technology products, sales of new-to market products, sales of new-to-firm products and employment in medium-high/ high tech manufacturing. Denmark is above the EU average in its efficiency of transforming innovation inputs into outputs (both Applications and Intellectual Property).

Estonia

Estonia’s innovation performance ranks it among the “moderate innovators” with a performance that is below EU average but above the group of “catching up” countries. Other EU countries that have a similar performance as “moderate innovators” are the Czech Republic, Slovenia, Italy, Cyprus and Spain. Estonia’s innovation performance has been increasing over the past 5 years compared to the EU average. It is on track to reach the EU average level of innovation performance within 10 years if current trends continue.

Estonia is ranked fourth in the EU in the Innovation & Entrepreneurship dimension, where it well above average on the indicators of SMEs innovating in-house, ICT expenditures and SMEs using organisational innovation. It also has a relative strength in the Innovation drivers dimension, where it is already above the EU average on indicators of population with tertiary education, broadband penetration rate and youth education attainment level. However, Estonia is relatively weaker in the Knowledge creation dimension, where it scores well below average on indicators of business R&D expenditures, enterprises receiving public funding. It is also relatively weaker in the Intellectual property dimension. Estonia is below EU average in its efficiency of transforming innovation inputs into outputs (both Applications and Intellectual Property).

Finland

Finland ranks behind Sweden as the most innovative country in the EU and is among the group of “innovation leaders”. Besides Sweden, other EU countries with a similar overall performance as “innovation leaders” are Denmark, Germany and the UK. Finland’s innovation performance has decreased over the last 5 years relative to the average EU trend.

Finland is among the top three EU countries in the dimensions of Innovation Drivers, Knowledge Creation and Applications and it is among the top three European countries in the indicators of Tertiary education, Public and business R&D expenditures, Early-stage venture capital, and patenting. Its relatively weakest performance is in Intellectual Property where it is below EU average on the indicator of Community industrial designs. The analysis indicates that it is above average in terms of the efficiency of transforming innovation inputs into outputs.

France

France’s overall innovation performance places it among the group of “innovation followers” with a performance that is above EU average but behind the group of “innovation leaders”. Other EU countries with a similar performance as “innovation followers” are Luxembourg, Ireland, Austria, the Netherlands and Belgium. The trend in France’s innovation performance over the last 5 years is about the same as the EU average trend.

In terms of the five dimensions of innovation performance, France is above EU average on Innovation Drivers and on Knowledge Creation, but marginally below EU average on Innovation & Entrepreneurship, Applications and Intellectual property. The analysis suggests that France is above average in its efficiency of transforming innovation inputs into Application outputs, but below average in transforming such inputs into Intellectual property outputs.

Germany

Germany’s overall innovation performance places it among the group of “innovation leaders”. Other EU countries in this group are Sweden, which shows the highest level of innovation performance, and Finland, Denmark and the UK. Over the past five years, the trend in Germany’s overall performance has been about the same as the EU average trend.

Germany shows relative strengths in the Applications and Intellectual property dimensions of innovation performance, where it has a particularly strong performance on the indicators of Sales of new to market products, Medium-high/ high-tech manufacturing employment as well as a high level on the indicators of patenting. However, it is below the EU average in the Innovation drivers dimension, where it is behind the EU average on indicators of S&E graduates, participation in life-long learning and youth education attainment level. Germany shows one of the highest efficiencies in the EU in terms of transforming innovation inputs into outputs

Greece

Greece has an overall level of innovation performance that places it in the group of "catching-up" countries. Other EU countries in this group with a similar level of performance are Malta, Lithuania, Hungary, Slovakia, Poland, Portugal, Bulgaria, Latvia and Romania. Greece's innovation performance has remained at about the same level compared to the EU average over the past 5 years.

Greece has a relatively strong performance in the dimension of Innovation & Entrepreneurship where it is above EU average on the indicators of SMEs innovating in-house, innovation expenditures, and SMEs using organisational innovation. It is relatively weaker on the Applications and Intellectual Property dimensions. Greece seems to be below EU average in its efficiency in transforming innovation inputs into outputs (both Applications and Intellectual Property).

Hungary

Hungary’s overall innovation performance ranks it in the group of “catching-up countries” with a performance below the EU average. Other EU countries with a similar level of performance as “catching-up countries” are Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Portugal, Bulgaria, Latvia and Romania. Over the past five years Hungary’s innovation performance has increased relative to the EU average.

Hungary has a relatively strong performance in the Knowledge creation and Applications dimensions where it is close to the EU average level. In these dimensions, Hungary ranks above EU average on the indicators of share of medium-tech/ high-tech R&D, employment in high-tech services, exports of high technology products and employment in medium-tech/ high-tech manufacturing. It has a relative weakness in the Innovation & entrepreneurship dimension, with low levels on indicators of SMEs innovating in-house and SMEs using organisational innovation.

Ireland

Ireland’s overall innovation performance places it among the group of “innovation followers” with a level of performance above the EU average but below the group of “innovation leaders”. Other EU countries with a similar level of performance as “innovation followers” are Luxembourg, Austria, the Netherlands, France and Belgium. The trend in Ireland’s innovation performance over the last five years has been about the same as the EU average trend.

Among the five dimensions of innovation, Ireland is strongest in Innovation drivers where it is well above the EU average on indicator of S& E graduates. It is relatively weaker in the Intellectual property dimension, where it is below EU average on the indicators of patent applications and Community industrial designs. The analysis suggests that it has above average efficiency in transforming innovation inputs into Application outputs, but is below average in transforming such inputs into Intellectual property outputs.

Italy

Italy has an overall innovation performance that places it in the group of “moderate innovators” with a performance below EU average but above the group of “catching up countries”. Other EU countries with a similar level of performance as “moderate innovators” are Estonia, Czech Republic, Slovenia, Cyprus and Spain. Italy’s overall performance has marginally increased compared with the EU average over the past 5 years.

Italy has relative strengths in the Knowledge creation and Intellectual property dimensions of innovation where it is close to the EU average. Within these dimensions it has an above average level on the indicators of share of medium-tech/ high-tech R&D, enterprises receiving public funding and Community industrial designs. The level of Italy’s performance is relatively lowest in the Innovation drivers and Innovation & entrepreneurship dimensions. The analysis suggests that Italy has a high efficiency in transforming innovation inputs into Intellectual Property outputs, but a lower efficiency in transforming such inputs into Applications outputs.

Latvia

Latvia's overall innovation performance places it among the group of "catching-up countries" with a performance that is well below EU average but increasing towards the EU average over time. Other EU countries within this group and with a similar level of performance are Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Portugal, Bulgaria and Romania. Based on current trends, Latvia would reach the EU average level of innovation in performance in around 20 years.

Latvia ranks relatively highly on the dimension of Innovation drivers where it is above the EU average on the indicator of Youth education attainment level. It performs relatively weakly on the dimension of Applications, where it is well below the EU average on the indicators of Exports of high technology products, Sales of new-to-firm products and Medium-high/ high-tech manufacturing employment. The analysis shows that Latvia is below average in its efficiency of transforming innovation inputs into outputs.

Lithuania

Lithuania has an overall innovation performance that places it among the group of “catching- up countries” with a performance that is well below EU average but increasing towards the EU average over time. Other EU countries within this group and with a similar level of performance are Malta, Latvia, Hungary, Greece, Slovakia, Poland, Portugal, Bulgaria and Romania. Over the past 5 years Lithuania’s innovation performance has increased rapidly and based on this trend it would reach the EU average level of performance within ten years.

Lithuania performs particularly strongly on the dimension of Innovation drivers, where it is above EU average on the indicators of S&E graduates, Population with tertiary education and Youth education attainment level. It performs at a relatively lower level on the dimension of Intellectual property. The analysis indicates that Lithuania is less efficient than EU average in transforming innovation inputs into outputs.

Luxembourg

Luxembourg’s innovation performance ranks it among the group of “innovation followers” with an overall performance that is above EU average but below the group of “innovation leaders”. Other EU countries with a similar overall level of performance are Ireland, Austria, the Netherlands, France and Belgium. Luxembourg’s innovation performance has been on a positive trend in recent years compared with the EU average, and it is close to joining the group of “innovation leaders”.

Luxembourg has relative strengths in the dimensions of Innovation & entrepreneurship, Applications and Intellectual property and it has particularly high levels on the indicators of Enterprises receiving public funding, Exports of high-technology products, Triad patents and Community trademarks. The analysis shows that it is among the most efficient EU countries in terms of transforming innovation inputs into outputs.

Malta

Malta has an overall innovation performance that places it among the group of “catching-up countries”. Other EU countries in this grouping are Lithuania, Hungary, Greece, Slovakia, Poland, Portugal, Bulgaria, Latvia and Romania. Malta’s innovation performance has been increasing in the last five years and if this trend continues it would reach the average EU level of performance in around 20 years.

Malta performs particularly strongly in the dimension of Applications where it is the leading EU country, and where it performs well above EU average on the indicators of Exports of high-technology products, Sales of new-to-market products and Sales of new-to-firm products. It performs at a relatively lower level in the dimensions of Innovation drivers and Knowledge creation.

Netherlands

The Netherlands’ overall innovation performance ranks it among the group of “innovation followers” with a performance that is above EU average but behind the group of “innovation leaders”. Other EU countries in this grouping with a similar level of performance are Luxembourg, Ireland, Austria, France and Belgium. The trend in the Netherlands’ innovation performance has been about the same as the EU average over the last five years.

Among the five dimensions of innovation performance, the Netherlands performs relatively strongly on Intellectual property where it is well above the EU average on the indicator of Triad patents. It has a relatively lower performance on the dimensions of Innovation & entrepreneurship and Applications. The analysis indicates that the Netherlands is above average in its efficiency of transforming innovation inputs into outputs.

Poland

Poland has a level of innovation performance that places it in the group of “catching up countries”. Other EU countries in this group with similar overall levels of performance are Malta, Lithuania, Hungary, Greece, Slovakia, Portugal, Bulgaria, Latvia and Romania. Poland’s innovation performance has increased relative to the EU average trend over the past five years. If current trends continue it would reach the EU average level of performance within twenty years.

Poland has a relatively even level of performance across the five dimensions of innovation. It shows relative strengths in the indicators of Youth education attainment level, ICT expenditures, and Sales of new-to-market products. It is well below the EU average on the indicators of Business R&D expenditures, Early-stage venture capital, and patenting activities. The analysis indicates that Poland is below average in its efficiency of transforming innovation inputs into outputs.

Portugal

Portugal’s overall innovation performance places it among the group of “catching-up countries”. Other EU countries in this grouping are Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Bulgaria, Latvia and Romania. Portugal’s innovation performance has been increasing relative to the average EU trend over the past five years.

Portugal performs best on Innovation & entrepreneurship, in particular on the indicators Share of SMEs innovating in-house, ICT expenditures and Share of SMEs which have introduced organisational innovations. Portugal has relative weaknesses in the dimensions of Knowledge creation and Intellectual property, in particular in the indicators of Business R&D expenditures and all forms of patenting. Despite its lower level of performance in Intellectual property, Portugal is showing a high level of efficiency of transforming inputs into Intellectual Property outputs while the efficiency in Applications outputs is below average.

Romania

Romania has a level of innovation performance that places it in the group of “catching-up countries”. Other EU countries in this group are Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Portugal, Bulgaria and Latvia. Romania’s innovation performance has been increasing significantly faster than the EU average trend over the last five years.

Romania performs relatively well in the Applications dimension of innovation, where it is above the EU average on the indicator of Sales of new-to-firm products. It is relatively weaker in the dimensions of Knowledge creation and Intellectual Property. The analysis shows that Romania is relatively efficient in transforming innovation inputs into Application outputs, but inefficient at transforming such inputs into Intellectual Property outputs.

Slovakia

Slovakia’s overall innovation performance ranks it among the group of “catching-up countries”. Other EU countries in this grouping are Malta, Lithuania, Hungary, Greece, Poland, Portugal, Bulgaria, Latvia and Romania. Slovakia’s innovation performance has been increasing over the last five years compared to the EU average and if these trends continue it would reach the EU average level of performance in around 20 years.

Among the five dimensions of innovation performance, Slovakia performs strongly in Applications where it is above the EU average and performs particularly well on the indicators of Sales of new to market products and Medium-tech/ high-tech manufacturing employment. It is relatively weaker on the dimension of Knowledge creation, in particular due to a lower indicator of business R&D expenditure. The analysis shows that Slovakia is relatively efficient at transforming innovation input into Output applications, but below EU average efficiency for transforming such inputs into Intellectual property outputs.

Slovenia

Slovenia has an overall level of innovation performance that places it among the “moderate innovators”. Other EU countries in this group and with a similar level of performance are Estonia, the Czech Republic, Italy, Cyprus and Spain. Slovenia’s innovation performance has been increasing relative to the EU average over the past 5 years and if these trends continue it would reach the EU average level of performance in around 13 years.

Regarding the five dimensions of innovation performance, Slovenia performs particularly well on Innovation drivers where it is above the EU average where it performs strongly on the indicator of Participation in life-long learning. It is, however, relatively weaker in the dimension of Intellectual property with lower levers on the indicators of US and Triad patents. The analysis indicates that Slovenia is below average efficiency in transforming innovation inputs into outputs.

Spain

Spain’s overall innovation performance places it in the group of “moderate innovators”. Other EU countries in this group and with a similar level of performance are Estonia, the Czech Republic, Slovenia, Italy and Cyprus. The trend in Spain’s innovation performance has been about the same as the EU average trend over the last five years.

Within the five dimensions of innovation performance, Spain performs relatively well on Innovation drivers where it is close to the EU average and has an above average performance on two indicators: Population with tertiary education and Participation in life-long learning. It is relatively weaker in the dimension of Innovation & entrepreneurship with a particularly low level on the indicator of Innovation expenditures. The analysis of innovation efficiency shows that it is above average in transforming innovation inputs into Intellectual property outputs but below average in transforming such inputs into Applications.

Sweden

Sweden has the highest overall level of innovation performance of all the countries included in the European Innovation Scoreboard. Other EU countries with the most similar level of performance as “innovation leaders” are Finland, Denmark, Germany and the UK. The growth trend of Sweden’s innovation performance over recent years has been below the average trend rate of the EU.

Among the five dimensions of innovation performance, Sweden performs particularly strongly on Knowledge creation and on Innovation & entrepreneurship: in both cases it is the best performing country. It performs at a relatively lower level in the dimension of Applications, although this is still above the EU average. The analysis of innovation efficiency indicates that Sweden could increase the efficiency in transforming innovation inputs into outputs.

United Kingdom

The UK’s overall level of innovation performance places it among the “innovation leaders”. Other EU countries within this group with a comparable overall performance are Sweden, Finland, Denmark and Germany. The trend in the UK’s innovation performance over recent years has been about the same as the EU average growth rate.

Regarding the five dimensions of innovation performance, the UK performs particularly strongly in Innovation & entrepreneurship with a relatively high level on the indicator of Early-stage venture capital. It performs below the EU average in the dimension of Intellectual property with a relatively lower level on the indicators of Triad patents and Community designs. The analysis of innovation efficiency suggests that the UK is above the EU average in transforming innovation inputs into Applications, but below average in transforming such inputs into Intellectual property outputs.

Table 1 - EIS 2007 Indicators

Table 2 Overall innovation performance: the EIS Summary Innovation Index

Note: The Summary Innovation Index is a composite indicator of 25 measures and can range from 0 (worst performance) to 1 (best performance). Countries in green are innovation leaders; those in yellow are innovation followers; orange are moderate innovators; and blue are catching up countries.

Table 3 Convergence in Innovation Performance

Error! Not a valid link.Note: Current performance as measured by the Summary Innovation Index is shown on the vertical axis. Growth of the Summary Innovation Index relative to the EU average is shown on the horizontal axis.

Table 4 Innovation efficiencies in transforming Inputs into Application and intellectual Property outputs

[ Figures and graphics available in PDF and WORD PROCESSED ]

Note: Colour coding conforms with the groups of countries as identified in the EIS 2007: countries in green are innovation leaders; those in yellow are innovation followers; orange are moderate innovators; and blue are catching up countries. The size of the bubble gives the value of the 2007 Summary Innovation Index (SII). The dotted lines give the unweighted average of the efficiency scores for the EU27 Member States.