Current limitation of Europe’s competitiveness and ability
to face global competition can be overcome also becoming an economic zone that
could generate much more “lead markets”.
The potential economic advantages of the “Lead Market”
Initiative (LMI) for Europe are considerable. Facilitating the growth of lead
markets is an approach to fill the gap between the generation of new
technologies and the market success of innovations. The gains from closing the
gap could include more rapid returns on investments and thus greater incentives
for expanding private investment in R&D; location advantages for R&D
and production facilities; higher productivity, increased exports, ultimately
leading to higher levels of growth and employment. Given the areas identified,
the approach would also generate substantial environmental and societal
benefits (see the LMI Communication).
Two clear themes emerge from the sixth edition of the
European Innovation Scoreboard. The first is that the innovation gap between
the EU and the US has narrowed for the fourth year running. Secondly, national
innovation performances within the Union are beginning to converge as new
Member States move closer towards the EU average.
This snapshot of the state of play of innovation in the
EU25 last year is the result of an analysis of 25 different indicators ranging
from the percentage of the population with tertiary education to the number of
new patents registered. These were grouped into five main families: innovation
drivers, knowledge creation, innovation and entrepreneurship, applications and
Over the past year, the EU improved its relative
performance against the US in almost a dozen indicators. These include new science
and engineering (S&E) graduates, who now make up 13 per thousand 20-29 year
olds in Europe compared to 10 in the US. The EU also leads in employment in
manufacturing industries producing high-tech goods (7% of total workforce
compared to 4% in the US).
However, the EU lags behind in other key areas. Venture
capital investments in the early life of a company are three times higher on
the other side of the Atlantic than in Europe. The share of total exports taken
up by high-tech products is noticeably higher in the US (26.8%) than in the EU
(18.4%) and the US files a lot more patents.
After falling further behind Japan in 2005, the EU has
reversed the trend, making up for the ground lost in the previous four years.
The change in fortunes was partly due to a stronger performance in S&E
graduates and broadband penetration rate.
Within the EU, there are still significant national
differences between innovation leaders, innovation followers, catching-up
countries and those trailing behind. The first group contains Sweden, Finland, Denmark and Germany. These are followed by the UK, France, Netherlands, Belgium, Austria and Ireland, which find themselves basically on a par with the US.
The scoreboard reinforces the key message: in order to
perform well in the innovation stakes, it is necessary to have a strong
all-round performance. Weaknesses in one or more of the five families of
indicators can drag down the whole and must be tackled, but not in isolation.
As the EU's innovation policy becomes more sophisticated,
the emphasis is shifting away from assessing what can be done to improve
innovation performance per se to ways in which imaginative breakthroughs can be
used in practice to achieve societal goals.
This can be seen from the agreement of the December 2006
Competitiveness Council. This acknowledged the critical role that innovation
can play for Europe to respond to the challenges and opportunities of the
global economy and its important contribution to the EU's growth and jobs
strategy. To accelerate the process, the Council agreed a nine-point strategic
priority action plan, which is currently being put into practice. The creation
of a European Institute of Technology is arguably the plan's flagship.