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Young Leading Innovators and EUs R&D intensity gap

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Abstract

Innovation in the European Union remains weak according to a number of key input indicators, especially R&D investment by the business sector, and there are relatively few signs of progress. From a firm-level perspective, Europes innovation gap relative to the US results from an inappropriate industrial structure in which new firms do not play a significant role, especially in new high-tech sectors. This view of a structural EU innovation deficit has many supporters. But it has received little or no thorough empirical investigation. This paper aims to address this evidence gap. We find that compared to the US, the EU has fewer young firms among its leading innovators. But this accounts for only about one-third of the EU-US differential. The largest part of the differential is due to the fact that young leading innovators in the EU are less R&D intensive than their US counterparts. Further unravelling shows that this is almost entirely due to a different sectoral composition. We thus confirm that the EU-US private R&D gap is indeed mostly a structural issue.

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  • Michele Cincera & Reinhilde Veugelers, 2010. "Young Leading Innovators and EUs R&D intensity gap," JRC Working Papers on Corporate R&D and Innovation 2010-07, Joint Research Centre.
    • Handle: RePEc:ipt:wpaper:201007
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    1. repec:dau:papers:123456789/131 is not listed on IDEAS
    2. Bruno Pottelsberghe de la Potterie, 2008. "Europe's R&D: Missing the Wrong Targets?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 43(4), pages 220-225, July.
    3. C. Denis & K. Mc Morrow & W. Röger & R. Veugelers, 2005. "The Lisbon Strategy and the EU's structural productivity problem," European Economy - Economic Papers 2008 - 2015 221, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Florence Jaumotte & Nigel Pain, 2005. "Innovation in the Business Sector," OECD Economics Department Working Papers 459, OECD Publishing.
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    More about this item

    Keywords

    dynamics of firms; age of firms; EU-US R&D gap;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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