Moderate innovator trap – Does convergence of innovative potential occur?

Based on β and σ convergence analysis, we find high persistence of technological gap for international innovation indices reported by the European Commission. Our research confirms the diverging scientific potential across the analyzed economies. On the other hand, estimation provides the evidence of convergence in case of R&D expenses and relative position on global technological frontier. We propose a simple fixed effect panel regression measuring relative innovativeness potential. Our model suggests that current ranking leaders i.e. Nordic countries (Sweden, Denmark and Finland) and Germany are likely to further outpace the United States. Central and Eastern Europe countries are achieving greatest relative gains, but are unlikely to exceed 70% of US potential. Peripheral Europe countries, South Africa, Turkey and Russia are projected to further lose innovativeness position, despite weaker initial position.