Innovation Output Indicator

This report presents the 2024 edition of the Innovation Output Indicator (IOI), a composite indicator published by the European Commission since 2013 to offer an output-focused metric of innovation performance at the country and EU levels. The IOI measures countries’ capacity to derive economic benefits from innovation by tracking the extent to which innovative ideas reach the market, create knowledge-intensive jobs, and increase country technological capability. The report presents the latest results for the IOI composite metric and its underlying indicators for 46 countries, including European Union (EU) Member States (MSs) and selected EFTA, OECD and emerging economies. According to the IOI, Sweden, Ireland and Germany are the best performers in the EU and are followed by Finland and Luxemburg. Sweden outperforms the other EU countries in terms of IP applications, Ireland performs very well in terms of employment in knowledge intensive industries, while Germany performs the best across the EU in terms of its domestic value added content of its knowledge-intensive manufacturing exports. On the other hand, Romania, Latvia and Bulgaria reported the lowest performance among EU countries. The largest improvements in the IOI between 2013 and 2023 were recorded by Lithuania and Estonia, with the majority of EU MSs also showing an improvement in their IOI performance. The EU27 leads Canada, Australia, and China, but it continues to lag behind its main economic partners, namely the United States, South Korea and Japan. The EU27's performance has improved over time, albeit at a slower pace than its main economic partners. This suggests that the United States, South Korea, and Japan are increasing their lead over the EU27, whereas China is rapidly narrowing the gap This IOI report includes also an extension of the IOI to the regional level for the EU27. This first, exploratory edition of the Regional Innovation Output Indicator (RIOI) makes use of established and novel datasets to assess the performance of EU NUTS-2 regions in terms of innovation outputs by providing a snapshot of regional activity in terms of technological and non-technological innovation, regional contribution to value added in trade, employment, and innovation activities. The results for the RIOI showcase the regional divide between centre and periphery of the EU in terms of innovation output performance, with regions of Central and Western EU countries such as Germany, Sweden, Belgium, and Netherlands performing in general better that those of Eastern and Mediterranean EU countries. Exceptions in this pattern are capital and major city regions in the Eastern and Mediterranean Europe, which excel compared to the remaining regions of their country. These results are confirmed by a spatial autocorrelation analysis which showcases the clustering of high-performing regions in Western and North Europe and low-performing regions in the periphery. The five best performing NUTS-2 regions in terms of the RIOI are Stockholm, Oberbayern, Berlin, Praha, and Ile-de-France, while Germany and Sweden showcase respectively eight and four regions in the top 20 performers.