Report Shows U.S., Japan Still Lead EU in Innovation Capacity

The European Commission's 2001 European Innovation Scoreboard, characterizing the strengths and weaknesses in the capacity for innovation of the European Union (EU) and its member states, shows the EU continues to lag behind the U.S. and Japan. 



Released October 1, the scoreboard uses 17 indicators to rate each member state's capacity for encouraging innovative business and improving the competitiveness of their industry through innovation. The aspects of the innovation process measured by the scoreboard are: 



Availability and the use made of people with the right skills, using figures including the supply of new scientists and engineers and the percentage of the workforce employed in technology sectors of industry. 



Creation of new ideas, based on figures for R&D expenditure and patent applications. 



Innovation by firms as measured by statistics such as the percentage of small and medium-sized enterprises (SMEs) that develop product or process innovations themselves or in cooperation with other firms. 



A group of indicators covering a range of issues including the supply of high-tech venture capital, new-to-market products as a percentage of sales by manufacturers, and value-added in high-tech sectors. 



Comparing current EU and U.S. performance, the most significant U.S. advances over the EU include the level of R&D by business (74 percent higher than the EU mean), the amount of new capital raised (73 percent), the level of high-tech patenting (up to 65 percent), and the percentage of the working population with some form of post-secondary education (65 percent). The EU leads only in the supply of new science and engineering graduates (28 percent). 



Japan leads the EU in the level of R&D by business (almost double the EU average) and to a lesser extent in supply of science and engineering graduates and share of the working population with a post-secondary education. The EU leads Japan in the level of public spending on R&D and spending on information and communications technology equipment and services. 



The overall innovation performance of the EU is improving. Trends in the indicators show countries such as Finland and Denmark, whose performance already is considered strong, are moving ahead. Greece and Spain also are approaching the EU average, although from a relatively low level. The three largest EU economies – France, Germany and UK – are improving, but at rates below the EU average. 



Sufficient data on ten of the indicators allows assessment of each indicator's trend over the past four to six years. On average, these indicators have improved by about 30 percent, but three of them show a decline for the EU as a whole: levels of public R&D spending, spending by business on R&D, and value-added from high-tech manufacturing. 



Overall, the gap between the best-performing and weakest-performing member states appear to be growing. For most of the indicators for which comparable data is available, the U.S. and Japan are outperformed by at least one of the member states. 



The European Innovation Scoreboard was requested by the Lisbon European Council of March 2000 as part of its strategy for turning the EU into the most competitive and dynamic knowledge-based economy in the world within the next decade. The scoreboard, to be updated and published annually, is available at: http://www.cordis.lu/innovation-smes/scoreboard/home.html