Dec. 14, 2004--In the face of an increasingly global economy, the United States has actually widened its advantage over most European nations when it comes to innovation, according to a recent study out of Europe.

The 2004 European Innovation Scoreboard (EIS), released in November by the European Commission, found that the U.S. and Japan remain "far ahead" of E.U. nations in the area of innovation. The report said that the level of E.U. innovation has remained relatively constant since 1996, while innovation performance in the U.S. and Japan has continued to improve, widening what it called the "innovation gap" between the U.S. and the E.U. The report traced this gap primarily to significant differences between the U.S. and E.U. in a handful of key areas, including patents, the education level of the working population, business expenditures on research and development, high-tech manufacturing, and early-stage venture capital.

The report analyzed innovation indicators and trends for all 25 E.U. member states as well as Bulgaria, Romania, Turkey, Iceland, Norway, Switzerland, the U.S., and Japan. The EIS ranked the countries in 20 categories and combined those rankings into a composite indicator, offering an overview of relative national innovation performances. Japan ranked first with a relative innovation score of 0.77, followed by Sweden (0.76) and Finland (0.75). The U.S. placed fourth, with a score of 0.70, compared to an average score of 0.44 among all E.U. member nations.

The report classified four general categories of innovative companies: strategic innovators, which focus on research and development and for which innovation is a core component of competitive strategy; intermittent innovators, which often adapt new technology rather than develop it; technology modifiers, which modify existing products; and technology adopters, which apply innovations developed elsewhere.

While stopping short of claiming a direct correlation between innovation and GDP, the report called innovation "one of the key drivers of economic welfare."