How does the UK stack up against the EU on innovation?

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The EU’s annual Innovation Union Scoreboard shows that the UK’s innovation performance improved in 2015, but we still have further to go.

Looking at the EU as a whole, the overall region has seen very little change in innovation performance in 2015. However, within this, the performance of 13 countries declined and the performance of 15 countries improved.

The good news is that the UK was one of the improvers. However, we remain an “innovation follower” – so while our innovation performance outpaces the bulk of countries in the EU, it's still not enough to enter the top group of “innovation leaders”, which includes Germany, Finland, Denmark and Sweden.

It’s certainly not time to beat ourselves up. There are a few areas where the UK really excels. These include:

  • Highly skilled people: The UK is a high-performer when it comes to ‘human resources’ – with a high proportion of the population achieving tertiary-level education and large numbers of doctorate graduates relative to the rest of the EU.
  • An excellent science base with global reach: The UK is in the top for EU countries for ‘open, excellent and attractive research systems’ – due to the globally-recognised high standards of UK research, and the international engagement of UK researchers. When we say we’ve got great science in this country, we mean it. We even outperform innovation leaders Germany in this area.
  • Innovative SMEs collaborating with other businesses: there’s a high degree of collaboration between UK companies. Our Innovation Monitor 2014/15 showed that UK manufacturers particularly focus on working with their customers to develop new products and services that best meet their needs.

However, unlike the top countries we don’t excel in every area. As the Innovation Scoreboard report puts it:

“The most innovative countries perform best on all dimensions: from research and innovation inputs, through business innovation activities up to innovation outputs and economic effects.”

Some of the key areas where the UK underperforms are:

  • R&D expenditure by the public sector and R&D expenditure by the business sector. These two are closely linked: state spending can crowd in business spending on R&D. It’s a key reminder of the important role that government play in this area.
  • The number of SMEs bringing product and process innovations to market. It’s long established that the strength of our science base hasn’t always translated into commercialisation in the UK.

But even in here there is good news, especially with regards to SMEs bringing new innovations to market. The proportion of SMEs bringing product and process innovations to market has risen over time. As has the proportion of SMEs bringing marketing and organisational innovations to market – something that we picked up on in our Exec Survey in January.

The UK has much to build on when it comes to innovation. There are a number of areas where we perform very strongly, and much of this has to do with stable and improving government support, such as the ring-fencing of the science budget and policy mechanisms to improve collaboration. But it’s also clear that companies themselves are upping the ante when it comes to innovation.

The UK can be up there with the best. To do this we must enable the continued success of the science base, and build on the improvements in innovation support, to put the UK on the path to becoming an innovation leader.



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