New ‘Innovation Indicator’: Sweden as Europe’s No.1 Economy

Written by | Thursday, November 21st, 2013

Sweden is the no. 1 country in the whole European Union when it comes to getting new ideas to reach the market – according to a new innovation indicator, launched by the European Commission, which measures innovation output, which creates better jobs and makes Europe more competitive. This indicator is based on technological innovation as measured by patents, employment in knowledge-intensive activities as a percentage of total employment, competitiveness of knowledge-intensive goods and services, and employment in fast-growing firms operating in innovative sectors.
As Máire Geoghegan-Quinn, the EU Commissioner responsible for research, innovation and science, has explained, “The European Union must turn more great ideas into successful products and services in order to lead in the global economy. We also have to close a worrying ‘innovation divide’. The proposed indicator will help us measure how we are doing and pinpoint areas where countries need to take action.” The indicator has revealed that, in terms of how much the EU member state’s economy gets out of its innovation investments, Sweden is taking the lead, followed by Germany, Ireland and Luxembourg. If one considers a relatively small population of Sweden, a number of Europe’s most innovative and internationally successful companies come from this Scandinavian country, including furnishing juggernaut Ikea and online music-streaming service Spotify.
The Europe 2020 strategy for smart, sustainable and inclusive growth is underpinned by five indicators, one of them being improving the conditions for Research & Development (R&D). The aim of raising combined public and private investment levels for R&D to 3% of GDP. To complement this R&D intensity indicator, the European Council gave the Commission the mandate to develop a single innovation indicator. In general, the top-performing EU countries all have economies with a high share of knowledge-intensive sectors, fast-growing innovative firms, high levels of patenting and competitive exports. However, the indicator has also highlighted significant differences between EU countries with Bulgaria, Lithuania and Latvia getting the lowest score on the indicator, only around half of the top score. While the EU as a whole performs well internationally, it lags behind some of the most innovative economies worldwide, such as Switzerland and Japan.

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