Attracting international companies to locate R&D activities in their home country is top priority for all European investment and promotion agencies. In particular attracting new R&D facilities is of interest since these investments are seen as key to generate growth and high skilled job creation. By promoting their unique innovation capabilities, such as presence of leading universities, unique research facilities, availability of a highly skilled workforce, presence of clusters of excellence and special tax regimes for innovation the European agencies compete not only each other, also other developed countries are competitors. New in this competition for growth are the emerging economies. According to the Innovation Union Scoreboard 2012 published by the EU last week, competition will increase significantly. South Korea already outperforms the EU on innovation performance and China is closing the gap with the EU.
South Korea already ahead of EU
With the annual scoreboard the EU measures its innovation performance. The scoreboard compares the EU countries and its main competitors based on 24 indicators key for stimulation innovation. Of the emerging economies South Korea is best performing on innovation according to the scoreboard 2012 (see Figure 1). In particular the Asian Tiger is outperforming the EU 27 on private R&D expenditure and patent applications.
When will China outperform the EU?
With respects to the BRICS (Brazil, Russia, India, China and South Africa), China is the only one to close the innovation gap with the EU continuously in the last five years (see Figure 2). The scoreboard shows that the EU is still performing better than China in most indicators. The exception is exports of medium and high- tech products, in which China further increased its lead the last years. However, China has decreased its innovation gap on many elements, in particular the numbers of public-private co-publications, numbers of patent applications, license and patent revenues from broad, numbers of international co-publications and private R&D expenditures. Since China has a very strong track record in meeting or even exceeding many of its targets in previous five year plans and boosting R&D and innovation in focus areas like energy, automotive, IT infrastructure and biotechnology, which are key in the 12th Five Year-Plan (2011-2015) we may expect that China will strengthen is innovation performance increasingly the following years. The improvement of its innovation capabilities combined with China’s enormous economic opportunities and Europe’s financial crisis will increase the competition with EU countries for attracting private R&D facilities in the targeted focus industries. These developments make clear that if Europe wants to maintain its competitiveness it needs to boost its efforts to stimulate and speed up innovation.
Arjen Goetheer, CIO Global-Arena.com
