The European Innovation Scoreboard sets out to measure innovation capacity and the development of innovation activities in a country’s economy. It is classified into five dimensions: three estimate elements inducing innovation or input: Drivers, Knowledge Creation and Innovation and Entrepreneurship; the other two dimensions evaluate results or output: Innovation Applications and Intellectual Property. It uses 25 indicators to reflect, in a composite index, the weight of the aforementioned dimensions.

Graph 1. European Innovation Scorecard 2006 (SII). A.C. of the Basque Country and EU-27.

Source: Eustat and Maastricht Economic Research Institute on Innovation and Technology and CE

The A.C. of the Basque Country, out of the 27 countries of the European Union, occupies the 13th position, exactly mid-table, on the European Innovation Scoreboard with a score of 0.35 (out of a maximum of 1.00), according to Eustat data, with the European Union average for 2006 estimated at 0.45. Within the group of the Innovation leader countries are Sweden -0.73-, Finland -0.68-, Denmark -0.63- and Germany -0.59-. If belonging to the European Union is not taken into account, they would also be joined by Switzerland -0.69- and Japan -0.61-.

With scores between 0.48 and 0.54, above the European average, we find the second group, made up of France, United Kingdom, the Netherlands, Belgium, Ireland, Luxembourg, Austria and Iceland; the United States would be at the head of this group.

The A.C. of the Basque Country, alongside Slovenia –with the same score of 0.35 as the Basque Country-, Italy, Estonia and the Czech Republic, all with 0.34, Spain -0.31-, Malta -0.30- Lithuania -0.27-, Hungary -0.26- and the Slovak Republic -0.23-, form an intermediate group.

The quality of human capital stands out as the innovation strong point of the A.C. of the Basque Country

As regards the European average, the A.C. of the Basque Country stood out for some indicators included in the innovation drivers group: 26.1 per thousand young people aged 20 to 29 graduated in Science and Engineering, including those who were qualified in Higher-Grade Vocational Training. The European rate barely reached half this figure, with 12.7 per thousand, the closest countries to this being Ireland, with 23.1 per thousand and France -22 per thousand. In the other two indicators which measure human capital, population aged 25 to 64 with higher education –26%- and population aged 20 to 24 who have at least completed secondary education –81.1%-, they also surpassed, although not as notably as in the first case, the European average (22.8% and el 76.9%).

The life-long learning rate, with 4.9% of the population aged 25 to 64 in the case of the Basque Country and the European average of 11%, showed the negative side of this dimension. Broadband penetration offered very similar rates: 10.04 lines per 100 people in the A.C. of the Basque Country and 10.6% for Europe.

Graph 2. Innovation Dimensions in the A.C. of the Basque Country and in the EU-25. European Innovation Scoreboard 2006 (SII)

Source: Eustat and Maastricht Economic Research Institute on Innovation and Technology and CE

Basque innovation companies receive more public funding than the European average

Within the dimension that estimates knowledge creation, Basque innovation companies received a greater percentage of public funding –13.6%- than European ones –10.6%-. Investment in medium and high-tech R&D in industry was lesser in the case of the Basque Country: of total R&D expenditure, 71% was invested in medium and high-technology, whereas this percentage rose to 89.2% for the European average.

As regards the sector carrying out the R&D, public institutions executed 0.65% of GDP in R&D, whereas this percentage fell to less than half in the case of the Basque Country -0.3%. However, in the private sector the same execution was not dissimilar: 1.14% in the A.C. of the Basque Country and 1.20% in Europe.

Collaboration between companies to develop innovation activities remained an unresolved issue among Basque entrepreneurship

On the whole there were no substantial differences as regards innovation and entrepreneurship: the percentage of GDP devoted to Risk Capital in the early phases was identical –0.02%-, Basque innovation companies with 10 to 249 employees made even slightly more internal innovation than the European average (26.7%, on the one hand and 25.4% on the other), expenditure on innovation over sales in companies with 10 or more employees, was slightly less (1.6% and 2% in the EU25).

Co-operation between companies or with innovation institutions seems to remain an unresolved issue for Basque companies: only 6.1% had agreements of this type, whereas the percentage was 11.6% in the European Union.

There was little commitment to high-tech exportation among Basque companies, compared to European ones

Even though rates of people employed in medium and high-tech sectors of industry were higher in the A.C. of the Basque Country –10.1%- than the European average -6.7%-, and identical in the case of the services sector -3.5%-, the weight of exports of high-tech products was significantly lesser: 4.7% of the total exports in the case of the Basque Country and 18.4% in that of the European Union. The impact of sales of innovation products on the turnover of companies with 10 or more employees was also below the European average: 1.6% when they were for the marketplace and 6.4% when intended for other companies. The European average offered 6.2 and 6.4% respectively.

The percentage of trademarks and designs registered in the A.C. of the Basque Country was higher than the European average. However, the rate of registered patents was only half in the European Patent Office (EPO)

The final dimension, which sets out, as does the previous one, to estimate innovation results, focuses on indicators associated with intellectual property. This area also showed light and shade; on the one hand the proportion of registered designs and trademarks was above the European average –24 and 18% higher. On the other, when it came to registering patents in the European Patent Office (EPO) it came to only half the European rate, and only a fifth if we consider those registered in the United States Patent Office (USPTO).

Using a sub-group of only 7 innovation indicators, the Maastricht Economic Research Institute on Innovation and Technology (MERIT) and the European Commission produced another synthetic innovation indicator for regions (RIS): of 203 European regions studied, the A.C. of the Basque Country occupied the 55th position, the Community of Madrid came 31st, Navarre 76th and Catalonia 82nd. The regions of Stockholm and Västsverige in Sweden and Oberbayen in Germany stood at the head of the regional ranking.

Note: in the calculation of the European Innovation Scoreboard for the A.C. of the Basque Country we used the database of patents, trademarks and designs provided by the Basque Institute of Competitiveness