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European Innovation Losing Out to Japan, US

DW staff / AFP (dre)January 16, 2006

Scandinavia is the best when it comes to innovation in the EU 25, but offers no competition to worldbeaters America and Japan, according to a new study. The EU's executive arm is concerned.

For all of Europe's ambition, it's still far behind its competitorsImage: AP/Bayer

The Nordic countries are the most innovative in Europe but most of the economically embattled continent is failing to catch up with the United States and Japan, the European Commission said Thursday.

Denmark, Sweden and Finland lead Europe in innovation while Germany and Switzerland also got high marks in the latest scoreboard from the European Union's executive arm.

The study, the fifth of its kind by the commission, ranked most European countries as well as the United States, Japan and Turkey according to 26 criteria such as research spending, access to venture capital and the number of trademark registrations.

Worrying trend, increasing gap

Most of the EU's older member states were lumped in the middle of the ranking neither falling behind nor making much progress advancing up the innovation ladder. Europe's poorer eastern countries, many of which joined the EU in 2004, put in a mixed performance.

Fan Dänemark: EM 2004 in Portugal, Tschechien gegen Dänemark in Porto
Scandinavians lead Europe in innovation, but are still far behind America and JapanImage: AP

The Czech Republic, Cyprus, Greece, Hungary, Latvia, Lithuania, Malta, Portugal and Slovenia were seen catching up while Bulgaria, Estonia, Poland, Romania, Slovakia, Turkey but also Spain were losing ground. But the commission warned that Europe was broadly not catching up with the United States and that action needed to taken to boost innovation.

"Should the trend continue in terms of innovation in the 25 European Union member states the innovation gap we have been seeing in the last year between Europe and United States for example will not close," commission spokesman Gregor Kreuzhuber told journalists.

"This is obviously something which is in political terms a very clear message and a clear analysis that we have to take very seriously in terms of drawing the necessary and correct political conclusions," he added.

Japan could bring serious competition

The study showed that although the innovation gap between the United States and Europe was wide overall it was not getting any wider.

Japan Ausstellung in Lübeck
Japan could rise againImage: AP

However, that was not the case for Japan.

"Japan has been moving its innovation on, and if they get their economy moving again they will be a very aggressive competitor for us and we need to be prepared for that," said the head of the commission's industry department, David White.

EU policymakers have been struggling for years to live up to their dreams of boosting Europe's capacity to innovate and catch up with Japan and the United States, which plows a third more into research than the European bloc.

Ambitious program, but results lacking

Last year, EU members states watered down an ambitious programme to boost the EU's competitiveness after they consistently failed to meet the original targets when it was launched in 2000 in Lisbon with the aim to make the EU the most competitive economy in the world.

Jose Manuel Barroso stellt sein Team vor
European Commission president Jose Manuel Barroso won't be pleased with the resultsImage: AP

The commission says that it is doing its part with its limited means but that member states have to do more.

"We are trying to do on the European Union's end as much as we can but on the other part is what the member states have to on their end," the commission spokesman said.

The commission unveiled an "action plan" last October that proposed refocusing state aid, improving intellectual property rights, setting up specialized business clusters, drumming up more funds for research and boosting university-industry partnerships.