Comparing Innovation Performance in the EU and the USA: Lessons from Three ICT Sub-Sectors

The objective of the study is to document the existence of innovation gaps between the EU and its main competitors in specific ICT sub-sectors namely web services, industrial robotics and display technologies and to explore the role of government policies in Europes future needs for innovation in information and communication technologies (ICT) through a comparison with the USA and Asian countries. Our analysis shows that rather than there being a simple innovation gap with the EU lagging behind the USA, a more nuanced picture emerges in which firms in different countries have strengths in different sub-sectors and in different parts of the value chain. A key lesson from the analysis of the three subsectors is the critical importance of higher education, particularly elite university research, and of local networks as generated by clusters. Governments can also encourage innovation through appropriate intellectual property and competition laws and, more generally, through the development of a business environment conducive to innovation. Finally, Governments can have a very important role through the funding of early-stage innovation