The EU North-South divide extends to innovation

Wednesday, 8 February, 2012

Sweden is the highest-ranked EU member state in this year’s Innovation Union Scoreboard, revealed yesterday by the European Commission. But Europe’s most innovative nation, Switzerland, is outside the EU, and the Union trails noticeably behind the United States, Japan and South Korea in the innovation race. After Sweden, the three highest EU countries on the list are Denmark, Germany and Finland, emphasizing, once again, the infamous North-South divide that the euro architects so blithely ignored when creating the common currency.

Tellingly, Greece, which is the subject of so much attention these days, is at the back of the field. Indeed, the total lack of innovation and entrepreneurship in the Greek economy is such an elephant in the EU room that it cannot be ignored much longer. In his most recent report, Hugo Scott-Gall of Goldman Sachs wrote that “the competitive advantage of innovation is one that developed markets need to keep” and in the case of European countries that need to find a way to grow, innovation is vital. Unfortunately for Athens, its team performs dreadfully on the innovation-entrepreneurship front. Greece has got the lowest overall patent grant rate, the lowest corporate start-up rate and highest cost of starting a new business. No wonder Merkel & Kroes are starting to feel comfortable with the “letting go” meme. And the rest of the PIIGS who trumpet “We are not Greece!” need to read the Brussels report on where they rank for innovation. Portugal, Spain and Italy are not exactly “Leaders”, and neither is Ireland, for that matter. After studying the report, the political classes in these countries might try to do something about the non-innovation and un-growth that marks their economies before it’s too late to even contemplate catching up with their neighbours.

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