Yesterday, the European Commission published the 2007 European Innovation Scoreboard.

Overall innovation performance is calculated on the basis of 25 indicators covering five dimensions of innovation:

• Innovation drivers measure the structural conditions required for innovation potential;
• Knowledge creation measures the investments in R&D activities;
• Innovation & entrepreneurship measures the efforts towards innovation at the firm level;
• Applications measures the performance expressed in terms of labor and business activities and their value added in innovative sectors; and
• Intellectual property measures the achieved results in terms of successful know-how.

Based on performance over a five year period, four main groupings of countries emerge:

• Sweden, Switzerland, Finland, Israel, Denmark, Japan, Germany, the UK and the US are the innovation leaders, with scores well above that of the EU27 and most other countries. Sweden is the most innovative country, with the highest score of all countries
• Luxembourg, Iceland, the Netherlands, Ireland, Austria, France, Belgium and Canada are the innovation followers, with scores below those of the innovation leaders but equal to or above that of the EU27.
• Australia, Estonia, Slovenia, Norway, Czech Republic, Italy, Cyprus and Spain are the moderate innovators with scores below that of the EU27.
• Malta, Lithuania, Hungary, Greece, Slovakia, Poland, Croatia, Bulgaria, Portugal, Latvia and Romania are the catching-up countries. Although their scores are significantly below the EU average, these scores are increasing towards the EU average over time with the exception of Croatia. Turkey is performing below the other countries.

In summary, the report shows that:

o there was a continued convergence of innovation performance between Member States
o Germany, the UK and the Scandinavians were the strongest performers
o there was a “persistent but decreasing innovation gap with the USA and Japan”, but an increasing gap with the USA for high-tech exports
o “Most Member States could improve their efficiency in transforming innovation inputs into outputs”

An analysis of the situation in each member state can be found here.