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Innovation

 

 

 

July 2001

 
Policy News

INNOVATION POLICY

 


Compare and Contrast

 
    How innovative are European firms? What motivates them to invest in research and development or in new third-party technologies, and what obstacles do their innovation projects encounter? A recent European Commission report goes a long way towards answering such questions.

T he strategic goal set at the European Council Summit in Lisbon in March 2000, "to make the European Union the most competitive and dynamic knowledge-based economy in the world" by the end of the decade(1), necessitates new policy initiatives at EU, national and regional levels to make Europe more entrepreneurial and more innovative.

The efficient development of such policies, as well as the accurate assessment of their impacts, depend on regular collection and analysis of data about the innovative activities of individual firms.

Comparable data

A key tool is the Community Innovation Survey (CIS)(2), which is undertaken jointly by the European Commission and the statistical offices of European Economic Area (EEA) member states. Using a common methodology, CIS gathers internationally comparable data on innovation activities and expenditures at firm level, as well as their impacts on competitiveness. It goes well beyond traditional surveys, examining service as well as manufacturing sectors, and covering investment not only in R&D but also in training, market introduction and the acquisition of machinery, software or other technology.

The CIS constitutes a unique source of information on technological innovation in Europe, as a contribution to the development of effective policies supporting innovation and the spread of new technologies. Published at the beginning of this year, the 2000 edition of Statistics on Innovation in Europe presents an overview of the results of the second CIS (1997-98), by country, sector and firm size.

Key findings

  • Over half of all European manufacturing enterprises (51%) and 40% of those in the service sector are technological innovators, but these proportions vary widely between countries. (The CIS defines 'innovators' as firms which have introduced a technologically new product, process or service during the previous three years.)

  • In manufacturing industry, large firms spend nearly twice as large a proportion of their turnover (4.2%) on innovation activities as do small ones (2.5%). Small and medium-sized enterprises (SMEs) account for 29% of Europe's total manufacturing sales, but for only 18% of sales of innovative products.

  • Even in the low-tech sectors 36% of small, 49% of medium and 71% of large firms are innovators.

  • The acquisition of machinery and equipment is a source of product or process innovation for 60% of small innovators, and for 69% of medium-sized ones.

  • Universities and public research institutes are key sources of innovation information for less than 5% of innovating firms, and patents for only 3% of manufacturing innovators and 1% of those in the service sector.

  • Among collaborating innovators, 84% of manufacturers and 74% of service sector firms work with domestic partners, while 50% of manufacturers and 37% of service sector firms work with partners in other EU countries.


Sales new to market, new to firm,
and unchanged, all manufacturers, 1996

The third Community Innovation Survey (CIS3) will be carried out this year, and the first results are expected to be available towards the end of 2002.

(1) See 'Radical Response to a Quantum Shift', edition 4/00.
(2) See 'A New Breed of European Entrepreneur', edition 2/00.

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