The EU has been given a decidedly mediocre ranking by a new study that benchmarks innovation and competitiveness in 44 countries and regions around the world.
In its overall score, the EU comes just 19th, far behind the United States (fourth), South Korea (fifth) and Canada (seventh), although still ahead of major emerging markets like China (34th), Brazil (38th) and India (43rd).
The EU ranks even lower – 31st out of 44 – in the amount of progress it has made since 2009 in becoming more innovative.
Meanwhile, a recent separate study comparing the EU’s 27 member states shows that although Malta has increased its investment in research and development, a main contributor to innovation, even though it is still far behind the EU average.
In the most recent EU innovation scoreboard, Malta was placed in the third out of four benchmark categories of innovation in the EU and its performance last year has been described as moderate and below EU average, together with a group of countries which include Italy, Portugal, Greece and Spain.
The global study, funded by the European-American Business Council, a lobby for transatlantic business, also shows striking differences between individual EU countries, with the Nordics and Finland in particular at the top of the league table, with Mediterranean countries performing more poorly.
The Information Technology and Innovation Foundation, a Washington-based think tank, did the study by collating OECD and UNESCO data for 16 metrics, such as investment in research and development, education standards and worker productivity. The study notes how both the US and EU are losing ground to other countries, including to advanced economies like South Korea, Japan, Australia and Canada.
“Unless they change course, the path they are in is a downward one,” the study says.
The authors are critical of European leaders, accusing them of wanting “the benefits of a knowledge-based economy without the creative destruction that not only accompanies it but is required to achieve it”.
However, one European success was also flagged up in this study.
Finland came second place overall, with only Singapore ranking higher.
According to the study, the Finnish success is a result of a strong political consensus being forged on innovation policy.
One of the report’s co-authors, Robert Atkinson, contrasted the Finnish experience negatively with Italy’s, which registered the least progress on innovation over the past decade among EU countries.
Turning to individual metrics, the EU placed 23rd for the percentage of adults aged 25-34 years possessing third level degrees (31.8 per cent), with South Korea coming first (57.9 per cent).
Among EU countries, Ireland scored highest (45.1 per cent) and the Czech Republic lowest (16 per cent) on this metric. Finland ranked highest overall for science and technology researchers per 1,000 employed, while Cyprus was the lowest-ranked EU country, coming 37th place.
For research and development, the Finns were the highest-ranked EU country for business sector investment, with 2.31 per cent of GDP, while Austria topped the global league table for government-funded research and development, at 0.99 per cent of GDP.
Latvia had the lowest effective corporate tax rate, just nine per cent, while Italy had the highest rate among EU countries, at 29 per cent.
For labour productivity, the top-ranked EU country was the Netherlands, while the bottom-ranked one was Latvia.