IP/09/112 Brussels, 22 January 2009Substantial progress on innovation in EuropeThe 2008 European Innovation Scoreboard (EIS) published today shows the EU making substantial progress in its innovation performance preceding the financial crisis. The relative innovation gap with the US and Japan was reduced, in particular amid strong progress by many new Member States such as Cyprus, Romania and Bulgaria. Across the EU, particular progress was made in human resources and availability of finance for innovation. However, innovative investments by businesses are still relatively weak especially if compared to the US and Japan. In parallel to this report, the 2008Science, Technology and Competitiveness report provides a more in-depth analysis of trends in public and business R&D,, technological performance and progress in implementing the European Research Area "In a time of crisis, it is not the moment to take a break in research investments and in innovation. They are vital if Europe wants to emerge stronger from the economic crisis and if it wants to address the challenges of climate change and globalisation. The EU does have many assets, notably an increasingly attractive European research area and a continuously improving innovation performance. But there is still work to be done, especially on the relative underinvestment by business. The Commission's initiatives to improve the EU's research efficiency, to stimulate innovation and to develop high tech markets are putting the EU on the right tracks", emphasised Vice President Günter Verheugen, responsible for enterprise and industry policy, and Janez Potočnik, the Research Commissioner. The report shows that European countries form four groupings at different levels of performance, and that virtually all countries have improved their performance although the rate of progress varies:Switzerland, Sweden, Finland, Germany, Denmark and the UK are Innovation leaders, with innovation performance well above the EU average. Of these countries, Switzerland and Germany are improving their performance fastest.Austria, Ireland, Luxembourg, Belgium, France and the Netherlands are Innovation followers, with performance above the EU average. Ireland's performance has been increasing fastest within this group, followed by Austria. Cyprus, Iceland, Estonia, Slovenia, Czech Republic, Norway, Spain, Portugal, Greece and Italy are the Moderate innovators, with innovation performance below the EU average. The trend in Cyprus' innovation performance is well above the average for this group, followed by Portugal. Malta, Hungary, Slovakia, Poland, Lithuania, Croatia, Romania, Latvia, Bulgaria and Turkey are the Catching-up countries with innovation performance well below the EU average. Most of these countries have been catching up. Bulgaria and Romania have been improving their performance the fastest.For individual summaries of the innovation performance of all 27 Member States see MEMO/09/18. Innovation performance (2008 Summary Innovation Index) [ Figures and graphics available in PDF and WORD PROCESSED ] Note: The Summary Innovation Index (SII) is a composite of 29 indicators going from a lowest possible performance of 0 to a maximum possible performance of 1. The 2008 SII reflects performance in 2006/2007 due to a lag in data availability. Closing the innovation gap with the US and Japan The analysis of EU level data shows that there have been substantial improvements both in absolute terms (compared to five years ago), and relative to the US and Japan. A comparison with a broader range of countries also shows that the EU has fared relatively well with respect to emerging economies. There has been a particular progress in human resources for innovation (graduates, tertiary education); broad-band access and in availability of venture capital. However, weaknesses persist in business investment where the EU is behind the US and Japan on R&D and IT expenditures. Also, despite the reports' finding about the importance of non-technological innovation, expenditure by EU companies on such innovative activities (e.g. training, design, marketing, new equipment) has declined. Innovation as a recipe for economic recovery The EIS analysis is based on data that precede the financial crisis. However, they point to existing trends, strengths and weaknesses that need to be taken into account in responding to current conditions. The progress made by the EU prior the financial crisis has put European entrepreneurs in a better position to recover through innovation. However, the persistent business under-investment in innovation as compared to main competitors is a clear weakness which needs to be tackled, including through renewed public support to innovative companies such as the Lead Markets Initiative (see IP/08/12) which fosters market demand for new products and services. Further lessons come from the Innovation Progress Report which was published alongside the EIS and presents independent expert analysis of developments in national innovation policies and governance, building on country reports prepared by independent experts and available on the internet site of the PRO INNO initiative. This shows a trend towards support for innovative start-ups and strategies which address new challenges such as climate change and resource productivity. The findings of the reports will be used by the European Commission to help assess the success of current innovation policies and identify future priorities. Background information: Commissioned by the Directorate-General for Enterprise and Industry of the European Commission, the EIS is prepared by the Maastricht Economic and social Research and training centre on Innovation and Technology (UNU-MERIT) and the Innovation Progress Report by a consortium of experts led by the University of Athens and Technopolis Group. The full reports are available at: http://www.proinno-europe.eu/metricsFor more information, see MEMO/09/18, IP/09/92, MEMO/09/19