Innovation in Europe: regional and global. (EIS and RIS 2023)

European innovation in 2023 (EIS and RIS)

We summarize the results of the European Innovation Scoreboard, (EIS 2023), including the European regional analysis, Regional Innovation Scoreboard, (RIS 2023), and the global comparison with other countries.
The latest updates presented on this website were:

Classification by countries:

Member States are classified into four groups, based on their Performance of innovation relative to the EU average.

  • Leaders in Innovation.
  • Strongly innovative.
  • Moderately innovative.
  • Modest innovators.

View image:

Innovation index by EU countries 2023.

The Innovation Index is a value composed of 32 indicators.


For all the details, consult the full report at: https://op.europa.eu/en/web/eu-law-and-publications/publication-detail/-/publication/04797497-25de-11ee-a2d3-01aa75ed71a1

The results are shown in order from least to most and the 4 indicated groups are highlighted:

  • The first group, Innovation Leaders includes five members with a performance above 125% of the EU average. This group includes Belgium, Denmark, Finland, the Netherlands and Sweden.
  • The Strong Innovators group includes six members performing between 100% and 125% of the EU average. This group includes Austria, Cyprus, France, Germany, Ireland and Luxembourg.
  • The third group, Moderate Innovators includes 10 members performing between 70% and 100% of the EU average. This group includes the Czech Republic, Estonia, Greece, Hungary, Italy, Lithuania, Malta, Portugal, Slovenia and Spain.
  • The fourth group made up of Emerging Innovators includes six members who show a level of performance below 70% of the EU average. This group includes Bulgaria, Croatia, Latvia, Poland, Romania and Slovakia.

The graph below shows all scores for EU Member States in 2023, 2022 and the reference year 2016.
Indices are innovation performance values relative to 2016. Colored columns show each country’s index in 2023. Horizontal dashes show 2022. Gray columns show 2016 benchmarks and lines dashed show the threshold values between the different performance groups.

Denmark has become the most innovative EU Member State, surpassing Sweden, which was in the lead for many years.
Spain continues to be among the “moderate innovators”, below the EU average and has fallen to 16th place out of 27. France continues to be among the “strongly innovators” but with a decrease in its index since 2016, along with Luxembourg. Portugal has fallen back from the group of “strong innovators” to that of “moderate”.

Most of the EU Member States have increased their performance.

The EU innovation index has increased by 8.5% since 2016. The strongest increases (more than 20%) were registered by Cyprus, Estonia, Greece and the Czech Republic and it was positive in 25 of the EU Member States, with the exception of France and Luxembourg with negative growth.
The growth of the innovation index between 2016 and 2023 by European EU countries is shown in the following graph:

Between 2016 and 2023, the performance gaps between the 27 Member States have narrowed somewhat.
Compared to last year 2022, the growth rate is slower, with a rate that is reduced to 0.6%. There was an increase in 19 Member States, with the Czech Republic, Bulgaria and Poland at more than 5% and it has decreased in eight States.

Comparison with other European and global countries:

A more extensive analysis, which also includes 11 other European countries, shows that Switzerland is Europe’s innovation leader, and its progress is supported by indicators related to education, patents and scientific publications, and innovation indicators related to the environment-related technologies.
See the graph below:

Globally:

The EU has closed the gap with some of its global competitors.

In international comparison, the EU has a worse index than Korea, which is the highest in the EIS 2023, and is behind Canada, the United States and Australia. On the other hand, the EU leads China and Japan, as well as a group of emerging innovators, which includes Brazil, Chile, India, Mexico and South Africa.

Between 2016 and 2023, the EU’s innovation performance has grown faster than five global competitors (Australia, India, Japan, Mexico and South Africa) and less than six global competitors (China, Korea South, Canada, United States, Brazil and Chile). following graphics:

Impact of external factors on the innovation index

Factors that may have affected the low growth of the index in the EU compared to 2022 include Russia’s war against Ukraine, the resulting energy crisis and the current period of high inflation. In addition, the Covid-19 pandemic had a negative impact on several indicators, such as investments in innovation, innovative sales and venture capital investments, all of which experienced a decline between 2020 and 21.

The report also highlights the contextual differences between the different territorial areas in the global environment.

Innovation by territories and regions in the EU: RIS 2023

The Regional Innovation Scoreboard complements the EIS, and in my opinion, regional analyzes greatly help to understand the development of innovation, thats is usually grouped into regional or specific “clusters” for certain topics, and the vision of regional development that provides more precise information is important.

In general, the most innovative regions tend to be in the most innovative countries. However, regional “pockets of excellence” can be identified in several moderate innovator countries, (such as the Prague region in the Czech Republic, the Basque Country in Spain, Emilia-Romagna in Italy, and Budapest in Hungary) and also in Emerging Innovators, ( such as Grad Zagreb in Croatia, Warszawski Stoleczny in Poland, Bratislavský Kraj in Slovakia and Belgrade in Serbia.
To a more limited degree, there are also regional Moderate Innovators and regional Emerging Innovators in Innovation Leader countries (3) and in Strong Innovator countries (20 in total).

Results by regions the European Union, EU:

The most innovative region in Europe is Hovedstaden in Denmark, followed by Helsinki-Uusimaa in Finland, Oberbayern in Germany, Stockholm in Sweden and Berlin in Germany.

See in the table: the 25 regions with the highest innovation rate:

For more details see the full report: https://op.europa.eu/en/publication-detail/-/publication/c849333f-25db-11ee-a2d3-01aa75ed71a1/language-en/format-PDF/source-289680093

As by country, the regions are grouped into four groups by innovation index:

  • The Innovation Leaders group includes 36 regions.
  • The Fuertes Innovatores group includes 70 regions.
  • The Moderate Innovators group includes 69 regions.
  • The Emerging Innovators group includes 64 regions.

With a total of 239 regions, the RIS obtains a more detailed breakdown of these groups by dividing each into three subgroups, with the subgroup with the highest index being assigned a ‘+’, and the smallest subgroup a ‘-‘.
The most innovative regions will be ‘Innovation Leaders +’, and the least innovative regions will be ‘Emerging Innovators -‘.

This more detailed breakdown helps to better capture the diversity in the performance of regional innovation systems. For example, 11 countries have regions in four or more different performance subgroups. The graph shows them:

Changes in regional indexes from 2016 to 2023.

Performance relative to the EU average has decreased in 113 regions, including all in regions of Bulgaria, France, Ireland, Romania and Slovenia. For 28 regions, out of nine countries, performance has decreased over time, with the majority of regions located in France (12), Switzerland (4) and Germany (4).

See the summary graph, according to the % growth (green) or decrease:

Apart from the highly innovative regions, the increase in the index in southern European regions (basically Greece and Italy) is notable, with the exception of Spain and Portugal.
Also notable is the decline in the French regions of more than 12%.

Position of Spain by regions, “Autonomous Communities”

Spain is a Moderate Innovator that includes 19 territories called Autonomous Communities.
It shows an innovation index at 89.2% of the EU average, somewhat above the average for “Moderate Innovators”.

Growth since 2016 is positive at 9.7%, somewhat higher than the EU’s 8.5%. In this way it slightly shortens the country’s distance from the EU.

The differences in territorial innovation indices are high. The community with the highest index is the Basque Country, with an index that more than doubles the average of the last five, “emerging innovators”. There is a positive growth between 20216 and 2023 in all regions, being the strongest in the Foral Community of Navarra.

See the following table and graph with all the values:

An analysis of the total indicators shows us some positive factors in the evolution of innovation in Spain, but basically only in four autonomous communities: the Basque Country, Madrid, Catalonia and the Foral Community of Navarra.
It also shows, and repetitively with the analyzes of previous years, negative factors that slow down the growth of innovation.

Some relative strengths

  • Human resources
    • Population with tertiary education
      Continuous education & training
  • Digitization
    • People with general digital skills above basic
    • Broadband penetration
  • Sales of innovative products.
  • Productivity of resources

Resource productivity is expressed by the amount of GDP generated per unit of direct material resources consumed, that is, GDP / DMC in euros per kg. It provides information on whether the decoupling between the use of natural resources and economic growth is taking place. Resource productivity (GDP/DMC) is an indicator of sustainability in the EU for policy evaluation. Eurostat: Productivity of resources

Relative weaknesses

  • Impacts and quality of employment
    • Employment in innovative companies
    • Jobs in “knowledge intensive” activities
    • Business process innovators
    • Investments in innovation per employee
  • Finance and support
    • Government support for business R&D
    • Public sector investment in R&D
    • Investments in R&D in the business sector
    • Innovation expenses per employee
  • Small and medium enterprises (SMEs)
    • Innovative companies in products or services
    • Innovators in business processes
    • Innovative SMEs collaborating with others
  • Intellectual or intangible assets important in innovation
    • Number of PCT patents in relation to GDP
    • Number of new designs in relation to GDP
  • Environment
    • Environment related technologies
    • Air emissions of fine particles
  • Exports
    • Products with a medium-high technological content exports
    • “Knowledge intensive” services exports

Given the positive results in “Digitalization”, it seems that the necessary and important efforts made in “digital transformation” do not produce objective improvements in innovation if they are not accompanied by other initiatives.

Another relatively strong point, such as “human resources” and education, show us that they do not produce the necessary impact on employment or its quality.

These results indicate that the factors that slow down the progress of innovation to the point of becoming barriers, come more from the weak points grouped above:

Quality of employment, which in turn is a circular issue, since the more innovation, the more quality of employment and higher salaries

Financing and support for innovation. Both public and private.

SMEs: The traditional lack of financing has been a target for improvement and risk capital indices have evolved favourably. But other indicators show the low percentage of SMEs with cooperation activities with other companies or institutions on innovation issues, the lack of introduction of new innovative processes, both business and technology processes, and the low percentage of SMEs introducing new innovative products or services on the market. (Eurostat Community Innovation Survey)

Intangible assets and intellectual capital, especially those specified in PCT patents and innovative designs, but also present in other indicators, such as employment quality, lack of investment in R&D and innovation, and small and medium-sized business companies focused on competing in prices and sectors with low added value.

Focus on the environment with greater development of new technologies related to the environment and new energies.

Exports with more focus on those with higher added value, and “knowledge intensive” services

We have previously referenced some of these topics in other articles. See for example:

Removing barriers to innovation

Webinar: Innovation Urgency

Innovation and salaries

Barriers to innovation increase in Spain

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