Innovation Index Convergence in Europe: How Did COVID-19 Reshape Regional Dynamics?

This study assesses the innovation performance and convergence dynamics across 237 European regions (NUTS 2 level) from 2016 to 2023, explicitly accounting for the structural and behavioural changes triggered by the COVID-19 pandemic. The article provides a novel regional-level assessment of how an unprecedented external shock reshaped innovation trajectories before and after the pandemic. To this end, the analysis combines Principal Component Analysis (PCA), Hierarchical Cluster Analysis (HCA), sigma-convergence measures, and a Difference-in-Differences (DiD) framework within an integrated multi-method empirical approach to evaluate shifts in regional innovation patterns over time. The results reveal a highly uneven distribution of innovation activities, with increasing polarization in the post-pandemic period. Northern and Western European regions strengthened their competitive advantage through robust digital infrastructure, strong human capital, and substantial R&D investments. In contrast, many Southern and Eastern European regions faced heightened structural barriers, leading to a widening innovation gap. Nevertheless, several regions exhibited notable resilience and achieved significant innovation catch-up, providing new empirical evidence on heterogeneous regional adaptive dynamics supported by targeted regional policies and improved local capabilities. The sigma-convergence analysis indicates a general increase in overall disparities, as reflected by rising dispersion in the Regional Innovation Index (RII) during 2020–2023. However, according to the DiD estimation, regions most severely affected by COVID-19 experienced a statistically significant relative increase (approximately 2.17%) in innovation performance, highlighting the pandemic’s role as a catalyst for accelerated digital transformation and innovation adjustment at the regional level.