Reviewing the European Innovation Activities and Industrial Competitiveness

The European Innovation Policy

As it has been broadly described above, innovation is a key factor to determine productivity growth. Innovation helps in understanding the sources and patterns of innovative activity in the economy, as a fundamental prerequisite to develop better policies. As such, innovation assists member states in identifying their own strengths and weaknesses and in designing corresponding policies and programmes. Notably to overcome weaknesses and valorise strengths by identifying policy priorities, providing examples to articulate policy strategies and to measure the impact of those strategies. Figure 1 illustrates that the innovation performance of the US and Japan is well above that of the EU27. The EU27-US gap has dropped significantlyup until 2007, but in the last 3 years the relative progress of the EU27 has slowed down. The EU27-Japan gap has remained stable between 2005 and 2009 although the gap has decreased up until 2008 but has increased again in 2009.

Figure 1.

E.U. Innovation Gap

The 2009 European Innovation Scoreboard (EIS) provides a comparative assessment of the innovation performance of EU27 Member States, under the EU Lisbon Strategy, reporting overall innovation performance as calculated on the basis of 29 indicators covering five dimensions of innovation:

• 1.

  Innovation drivers measure the structural conditions required for innovation potential;

• 2.

  Knowledge creation measures the investments in R&D activities;

• 3.

  Innovation & entrepreneurship measures the efforts towards innovation at the firm level;

• 4.

  Applications measures the performance expressed in terms of labour and business activities and their value added in innovative sectors; and

• 5.

  Intellectual property measures the achieved results in terms of successful know-how.