EU Business Innovation: in Decline?

The European Innovation Scoreboard 2018, suggests Innovation in Europe “has declined.” The Washington Post reports Europe’s innovation deficit “isn’t disappearing any time soon.” The Centre for European Reform asks whether EU Competition policy may be “an obstacle to innovation and growth.” Europe’s history, asserts The Economist, “explains the (innovation) lag.” This paper examines whether EU business innovation, the key to economic sustainability, is in decline. This paper investigates five likely contributing factors to EU business innovation. First there is the effect of low productivity demand, and any resulting slow-down in growth. Might this be exacerbated by a lack of leadership in science? A second factor considered is the supply of entrepreneurial leaders. A third contributing factor concerns European investment in research and development when this is compared with similar investment in the United States. A fourth factor considers the impact of investment in “zombie” firms, (companies risking default) in contrast to investment in Europe’s “unicorn’ companies (start-up companies valued at over $1 billion). Then the fifth innovation factor may be the impact of European universities efforts to modernize and become entrepreneurial.The methodology used to investigate these five contributing factors is extraction of data from current reports using established performance metrics. The conceptual and operational relevance of the five factors is considered. Data collected for each of the factors is summarized in the paper. The principal data sources include those of the European Union (EU), the Organization for Economic Co-operation and Development (OECD), and the International Monetary Fund (IMF). Deming showed how innovation provides “the foundation of our future.” The paper, in final discussion, sees innovation shaping our work, private life, and social networks. Examples of recent business innovation in Europe call for a positive response to the question on innovation decline