Innovation Competitiveness Report Warns of Europe's Lag Behind 

European Commission recently published 2011 Innovation Union Competitiveness Report, a detailed report on innovation performance of the European Union (EU) by country and in comparison with some major economies. Innovation Union is one of the seven flagship initiatives of Europe 2020 that defines European Union (EU)'s growth strategy in the decade until 2020. 
According to the report, EU needs major improvements in several areas in order to achieve its targets of smart and sustainable growth. It also warns that Europe is lagging behind the US in terms of innovation competitiveness, whereas China and some Asian countries show signs of catching up.
While slowly advancing toward its 3% R&D target, EU sees a widening gap with its world competitors. Between 1995 and 2008, total research investment in real term in the EU rose by 50%, compared to 60% in the US, 75% in the knowledge-intensive Asian economies of Japan, Korea, Singapore and Taiwan, 145% in the BRIS countries (Brazil, Russia, India and South Africa), and 855% in China. The report foresees that China is set to overtake EU in terms of volume of R&D expenditure by 2014.

Although Europe is still the first producer of peer-reviewed scientific publications in the world, with 29% of the world production in 2009, ahead of the US (22%), China (17%) and Japan (5%), it is, however, losing ground as regards the exploitation of research results. The share of the EU member states' patent applications in the European Patent Office (EPO) has declined from 44.8% in 2000 to 44.2% in 2007, partly attributive to expensive filing and patent maintaining cost in the region.

Notes: (1) US, JP, CN, KR: 2008. (2) KR: (i) There is a break in series between 2008 and the previous years; (ii) BERD for 2000 does not include R&D in the social sciences and humanities. (3) US: BERD does not include most or all capital expenditure.