Four country groups have been identified using the average results of hierarchical clustering analysis of their innovation performance (Summary Innovation Index) over a five-year period:

 Innovation leaders: countries with innovation performance well above that of the EU27 and all other countries.

Innovation followers: countries with innovation performance below that of the innovation leaders, but close to or above that of the EU27 average

Moderate innovators: countries wih innovation performance below the EU27 average

Catching-up countries: countries with innovation performance well below the EU27 average, but converging towards the EU27 average over time 

Enablers captures the main drivers of innovation that are external to the firm as:

• Human resources – the availability of high-skilled and educated people.

• Finance and support – the availability of finance for innovation projects and the support of governments for innovation activities.

Firm activities captures innovation efforts that firms undertake recognising the fundamental importance of firms’ activities in the innovation process:

• Firm investments – covers a range of different investments firms make in order to generate innovations.

• Linkages & entrepreneurship – captures entrepreneurial efforts and collaboration efforts among innovating firms and also with the public sector.

• Throughputs – captures the Intellectual Property Rights (IPR) generated as a throughput in the innovation process and Technology Balance of Payments flows.

Outputs captures the outputs of firm activities as:

• Innovators – the number of firms that have introduced innovations onto the market or within their organisations, covering technological and non-technological innovations.

• Economic effects – captures the economic success of innovation in employment, exports and sales due to innovation activities.

  Country performances- Balkan Countries

   

  **Bulgaria is one of the Catching-up countries with an innovation performance well below the EU27 average but the rate of improvement is one of the highest of all countries and it is a growth leader within the Catching-up countries. Relative strengths, compared to the country’s average performance, are in Human resources, Finance and support and Economic effects and relative weaknesses are in Linkages & entrepreneurship and Throughputs.

  Over the past 5 years, Throughputs and Finance and support have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in Private credit (19.8%), Broadband access by firms (22.0%), Community trademarks (69.6%) and Community designs (24.1%). Performance in Economic effects has hardly grown, in particular due to a decrease in New-to-market sales (-5.7%) and New-to-firm sales (-3.1%).

  **For Greece, one of the Moderate innovators, innovation performance is below the EU27 average and the rate of improvement is above that of the EU27. Relative strengths, compared to the country’s average performance, are in Linkages & entrepreneurship, Innovators and Economic effects and relative weaknesses are in Firm investments and Throughputs.

  Over the past 5 years, Finance and support, Throughputs and Economic effects have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in Venture capital (24.1%), Broadband access by firms (35.4%), Community designs (34.2%) and New–to-market sales (32.8%). Performance in Firm investments has worsened, due to a decrease in Business R&D expenditures (-4.5%) and Non-R&D innovation expenditures (-22.7%).

  **Cyprus is a growth leader among the group of Innovation followers, with an innovation performance just above the EU27 average and a rapid rate of improvement. Relative strengths, compared to the country’s average performance, are in Finance and support, Linkages & entrepreneurship and Innovators and relative weaknesses are in Human resources and Throughputs.

  Over the past 5 years there has been strong growth in Finance and support, Linkages & entrepreneurship and Throughputs which have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in S&E and SSH doctorate graduates Broadband access by firms (22.6%), Innovative SMEs collaborating with others (12.3%), Public-private co-publications (22.1%), EPO patents (13.1%) and Community designs (15.3%). Performance in Innovators has worsened (-4.3%)

  **Romania is one of the growth leaders among the Catching-up countries, with an innovation performance well below the EU27 average but a rate of improvement that is one of the highest of all countries. Relative strengths, compared to the country’s average performance, are in Innovators and Economic effects and relative weaknesses are in Finance and support and Throughputs.

  Over the past 5 years, Finance and support and Throughputs have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in Public R&D expenditures (18.0%), Private credit (25.8%), Broadband access by firms (46.7%), Community trademarks (34.5%) and Community designs (37.3%). Performance in Firm investments, Linkages & entrepreneurship, Innovators and Economic effects has increased at a slower pace.

  **For Slovenia, one of the Innovation followers, innovation performance is just below the EU27 average but the rate of improvement is above that of the EU27. Relative strengths, compared to the country’s average performance, are in Human resources, Finance and support, Innovators and Economic effects and relative weaknesses are in Firm investments and Throughputs.

  Over the past 5 years, Finance and support and Throughputs have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in Private credit (15.5%) and Community trademarks (13.1%). Performance in Human resources, Firm investments, Linkages & entrepreneurship and Economic effects has increased at a slower pace.

  **For Croatia, one of the Catching-up countries, innovation performance is well below the EU27 average and its rate of improvement is above that of the EU27. Relative strengths, compared to the country’s average performance, are in Innovators and Economic effects and relative weaknesses are in Firm investments and Throughputs.

  Over the past 5 years, Human resources and Throughputs have been the main drivers of the improvement in innovation performance, in particular as a result from S&E and SSH doctorate graduates (10.7%) and Community designs (11.8%). Performance in Firm investments has worsened, in particular due to a decrease in Business R&D expenditures (-3.5%).

  **For Serbia, one of the Catching-up countries, innovation performance is well below the EU27 average. Relative strengths, compared to the country’s average performance, are in Economic effects and relative weaknesses are in Linkages& entrepreneurship, Throughputs and Innovators.

  Available time series data is too limited to analyse the change in Serbia’s innovation performance over time.

  **For Turkey, one of the Catching-up countries, innovation performance is well below the EU27 average and the rate of improvement is more than three times that of the EU27. Relative strengths, compared to the country’s average performance, are in Finance and support, Innovators and Economic effects and relative weaknesses are in Human resources, Firm investments and Throughputs.

  Over the past 5 years, Human resources, Finance and support, Firm investments and Throughputs have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in S&E and SSH graduates (17.2%), Life-long learning (13.1%), Private credit (17.3%), Business R&D expenditures (28.5%) and EPO patents (15.0%). Performance in the other dimensions has increased at a lower pace.

  This memo provides a synopsis of the innovation performance of the different Member States, as measured in the European Innovation Scoreboard 2009 (EIS). Commissioned by the Directorate-General for Enterprise and Industry of the European Commission, the European Innovation Scoreboard is prepared by the Maastricht Economic and social Research and training centre on Innovation and Technology (MERIT), assisted by the Joint Research Centre of the European Commission.

  Since 2001 the European Innovation Scoreboard has been providing an annual assessment of innovation performance across the EU. The 2009 report follows the methodology established in 2008, with a revised set of indicators which better recognise the importance of service sectors, non-technological innovation and innovation outputs. Overall innovation performance is calculated on the basis of 29 indicators covering seven dimensions of innovation, which are grouped in three main blocks, covering enablers, firm activities and outputs (see Table 1 below).

  Europa