Innovation: one of the most commonly used words in business, especially in a modern age which is so heavily focused on digital transformation and obsessed with the rise of game-changing new technologies such as generative AI.
Naturally, not all nations are innovating at the same pace. Amid tough economic conditions, a number of countries have seen their performance decline over the past couple of years.
However, as a whole, the European Union continues to close the gap on innovation leaders including Australia, Canada, the Republic of Korea and the US, and even surpassed Japan. Innovation performance has grown by around 10% since 2015, according to the European Commission’s latest European Innovation Scoreboard.
Which EU nations are leading the way?
In producing its innovation scoreboard, the European Commission examines member states and ranks them based on “relative strengths and weaknesses in national innovation performance”.
Nations are compared across 32 metrics, including attractive research systems, investment in research and development, and use of information technologies.
Based on their total scores, countries fall into four performance groups: innovation leaders (performance is above 125% of the EU average); strong innovators (between 100% and 125%); moderate innovators (between 70% and 100%); and emerging innovators (below 70%).
The union’s top performer is Sweden, which scores 135.7% of the EU average and whose innovation lead compared to the rest of the EU is increasing.
Against the aforementioned metrics, Sweden ranks highly when it comes to lifelong learning, digital skills, the number of patent applications and international scientific co-publications.
Just behind its Nordic neighbour in second is Finland, performing at 135.5% of the EU average.
Finland’s performance is increasing at a higher rate than that of the EU (19.5 percentage points compared to 9.9 percentage points), with strengths including public-private co-publications, innovative SMEs collaborating with others and enterprises providing IT training.
Clearly, there must be something in the water in Northern Europe as Denmark takes third spot on the scoreboard thanks to its public-private co-publications and environment-related technologies.
In fact, all innovation leaders and most of the strong innovators are in Northern and Western Europe, while most moderate and emerging innovators are located in Eastern and Southern Europe. The commission has previously pledged to “focus on bridging the innovation divide across the EU and positioning Europe as a leading player on the global innovation landscape”.
The Netherlands and Belgium are in fourth and fifth spot respectively, with both scoring well for their proportion of foreign doctorate students.
How are global competitors faring?
Switzerland is the only European country outside the EU to be classified as an innovation leader. It can boast a performance ranking of 142.4% of the EU average – significantly higher than Sweden, the EU’s top performer.
Other European nations which perform well but do not belong to the EU include the UK (122.3% of EU average) and Norway (117.8% of EU average), although the latter has strong ties to the union given its membership of the European Economic Area (EEA). Both are classed as strong innovators.
Looking further afield, global competitors such as the US, Canada, Australia and Republic of Korea continue to have a performance advantage over the EU.