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Young Leading Innovators and EU’s R&D intensity gap




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, Europe’s 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.

Suggested Citation

  • Michele Cincera & Reinhilde Veugelers, 2010. "Young Leading Innovators and EU’s R&D intensity gap," JRC Working Papers on Corporate R&D and Innovation 2010-07, Joint Research Centre (Seville site).
  • Handle: RePEc:ipt:wpaper:201007

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    References listed on IDEAS

    1. Bruno Pottelsberghe de la Potterie, 2008. "Europe's R&D: Missing the Wrong Targets?," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 43(4), pages 220-225, July.
    2. 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.
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    Cited by:

    1. Francesco Bogliacino & Matteo Lucchese, 2011. "Access to finance for innovation: the role of venture capital and the stock market," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(4), pages 165-183.
    2. Segarra Blasco, Agustí, 1958- & Gombau, Verònica, 2013. "Young innovative firms and R&D strategies: is the Spanish case different?," Working Papers 2072/222200, Universitat Rovira i Virgili, Department of Economics.
    3. Peter Huber & Harald Oberhofer & Michael Pfaffermayr, 2014. "Job creation and the intra-distribution dynamics of the firm size distribution," Industrial and Corporate Change, Oxford University Press, vol. 23(1), pages 171-197, February.
    4. Pietro Moncada-Paternò-Castello & Peter Voigt, 2012. "Projection of R&D-intensive enterprise growth to the year 2020: Implications for EU policy?," JRC Working Papers on Corporate R&D and Innovation 2012-01, Joint Research Centre (Seville site).
    5. Pietro Moncada-Paterno-Castello, 2011. "Companies' growth in the EU: What is research and innovation policy's role?," JRC Working Papers on Corporate R&D and Innovation 2011-03, Joint Research Centre (Seville site).

    More about this item


    dynamics of firms; age of firms; EU-US R&D gap;

    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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