The European Union (EU) is narrowing the gap with the United States and Japan in innovation, but remains weak in innovative investments, according to reports published on Thursday.
The 2008 European Innovation Scoreboard (EIS) shows that the relative innovation gap with the United States and Japan was reduced in the year, 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 compared to the United States and Japan.
The scoreboard shows that EU countries form four groupings at different levels of performance, and that virtually all countries have improved their performance although the rate of progress varies.
Sweden, Finland, Germany, Denmark and Britain are innovation leaders, with innovation performance well above the EU average. Austria, Ireland, Luxembourg, Belgium, France and the Netherlands are innovation followers, with performance above the EU average.
Cyprus, Estonia, Slovenia, the Czech Republic, Norway, Spain, Portugal, Greece and Italy are the moderate innovators, with innovation performance below the EU average. Malta, Hungary, Slovakia, Poland, Lithuania, Romania, Latvia and Bulgaria are the catching-up countries with innovation performance well below the EU average.
Across the EU, there has been a particular progress in human resources for innovation (graduates, tertiary education), broad- band access and in availability of venture capital, according to the scoreboard.
However, weaknesses persist in business investment where the EU is behind the United States and Japan on research and development (R&D) and information technology expenditures. Expenditure by EU companies on innovative activities such as training, design, marketing and new equipment has declined.
A science, technology and competitiveness report published also on Thursday shows that EU member states are far from reaching its strategic target of investing three per cent of the GDP in R&D.
The report, which examines progress in EU member states from 2000 to 2006, shows that the member states were on average investing only 1.84 per cent of their GDP in R&D.
All EU member states have increased their expenditure in R&D from 2000 to 2006. However, GDP experienced the same rate of growth over the period, which meant that R&D/GDP ratio remained unchanged at around 1.84 per cent since 2005, according to the report.
Between 2000 and 2006, 17 EU member states, mainly those which are catching up, have increased their R&D/GDP ratio. But 10 others, representing almost half of EU's total GDP, have seen their R&D/ GDP ratio decrease.
The report finds that the main reason for the gap between the EU and its global competitors is the difference in business sector R&D financing, which dropped in the EU from 2000 to 2005 while it increased substantially in the United States, Japan and China.
The number of researchers has grown twice as fast in the EU as in the United States and Japan since 2000, even if the share of researchers in the labour force is still lower, shows the report. As regards impact of research, the EU still ranks as the world's largest producer of scientific knowledge -- measured by publications, but contributes less than the United States to high impact publications, according to the report.
The EU has been attracting a growing share of private R&D investments from the United States despite the rise of Asia as a new R&D location. In 2005, US affiliates made 62.5 per cent of their R&D investments in the EU and only 3.3 per cent in China. It has also been attracting a growing number of science and technology professionals from third countries, shows the report.