Prominent feature of the leading innovators is the high level of firm activity in innovative areas, high level of R&D funds in particular.

Last Saturday, I talked about a report on innovation which is published regularly to compare the innovation performance of European Union countries and candidate countries, and “the innovation index” on which the report is based. The distinctive feature of the report and the index is that it assesses innovativeness at three dimensions. The elements comprising these three dimensions constitute the rings of a chain which starts with advanced R&D activities and education to new products.

The first dimension which is called “enablers” involves indicators on education and research, and on the financing of such activities. Naturally, advanced and high-quality research and education are of critical importance, though they are not sufficient alone. To what level firms are able to benefit from the outputs of these activities is also of significance.

With this perspective, the report assesses innovativeness in a second dimension called “firm activities.” Under this heading, the report examines firms’ investment in R&D, non-R&D innovative expenditures, innovative collaboration with other firms, and patent applications.

The importance of allocating large amounts of funds to R&D activities and securing innovations with patent is evident. Yet, it is also necessary to reflect these activities on the production process. This refers to the third dimension of innovativeness that the report addresses. For example, it investigates the share of knowledge-intensive services in exports or the employment in knowledge-intensive activities.

Relative positions of countries in the ranking of innovativeness are also striking. The countries are grouped under four categories on the basis of their innovation performance: innovation leaders, innovation followers, moderate innovators and modest innovators. Remembering the classifications of the post-crisis Europe which read like “troubled southern countries” and “northern countries which were forced to pay for their mistakes”, the list of innovation followers proposed by the report becomes even more interesting: Denmark, Finland, Germany and Sweden. All are northern European countries. Troubled southern economies (Spain, Italy, Portugal and Greece) are among the moderate innovators of the third group. Prominent feature of the leading countries is the high level of firm activity in innovative areas, high level of R&D funds in particular.

Turkey is among the modest innovators, also with a bad ranking within the group. I do not want to repeat this part. Instead, I want to talk about the weakest link in the picture: human resources. It consists of three elements: new doctorate graduates, population aged 30-34 with tertiary education, and population aged 20-24 with at least upper-secondary education.

This commentary was published in Radikal daily on 20.03.2012