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Measuring Progress
Commitment 34-A
Development of an Innovation Headline Indicator
Innovation Union commitment text

"The Commission proposes to launch the necessary work for the development of a new indicator measuring the share of fast-growing innovative companies in the economy. This will require the full cooperation of Member States and international partners. Subject to these commitments, the Commission will submit the necessary proposals and take urgent action to develop this indicator within the next two years, working with the OECD, as appropriate, so that it can become, over time, a new headline indicator allowing as part of the EU 2020 strategy to benchmark the EU's performance against its main trading partners."

  • What is the problem?
  • What is our objective?
  • Implementation
  • Milestones
  • Background documents
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Progress towards the Innovation Union should be measured at European Council level by two headline indicators: the R&D investment target and a new Innovation indicator, as requested by the European Council.[1]

Four main issues are crucial for the success of the Innovation Union and will be measured by this indicator.

1. The lack of progress in business R&D is symptomatic of the need to improve the framework conditions for innovation (competition, labour, bankruptcy laws, immigration, IP protection, access to capital, etc.). This indicator will reflect the progress on these framework conditions

2. Another key bottleneck for a more rapid adaptation of Europe to a knowledge based economy is the slow structural change exemplified by the lack of firms growing in innovative, knowledge based sectors: this indicator is precisely measuring progress in removing this bottleneck.

3. Standing up the societal challenges identified in the Innovation Union Communication require a more vibrant and reactive economy. The development and growth of innovative companies measured by this indicator are key to facing those challenges successfully.

4. In the face of the increased globalisation of the economy, responding to world-wide demand with innovative products and services is crucial to preserve Europe's growth and employment. One major bottleneck is that EU's SMEs internationalise less because of the lack of innovativeness and growth. Here again, the indicator will measure the progress in addressing this fourth major bottleneck.

 


[1] Conclusions of the European Council of 25/26 March 2010 (EUCO 7/10)

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It is crucial to ensure the mobilisation of Member States around a measurable target reflecting the issue of innovative fast growing firms.

Success will be defined by

  • Member States to adopt the necessary measures to progress in the area of innovative fast growing firms in their National Reform Plans
  • Availability of the indicator and of the underlying data before the European Council meeting of March 2013
  • Availability of international benchmarking, in particular with USA, Japan, South Korea and China
  • Political agreement at the European council of March 2013.
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The definition of the Innovation headline indicator results from the conclusions of the High Level Panel on the Measurement of Innovation which was appointed last spring by Mrs Geoghegan-Quinn.

This indicator should notably consider the economic weight of fast growing innovative firms in the economy. This economic weight should be expressed in terms of the percentage of employment.

It will be based only on data sources already available in Member States and participating countries , e.g. the companies' information from the Business Registers (or their equivalent when Business Registers are not available in some countries).

  • On 4 February 2011, the European Council has "invited the Commission to quickly develop a single integrated indicator to allow a better monitoring of progress in innovation."
  • The first data collection in view of testing several parameters for constructing the Indicator has been carried out by EUROSTAT for EU Member States and in March 2011 by the OECD for non- EU participants in the Entrepreneurship Indicators Programme (EIP) working group.
  • Data have been received from most Member States. They are currently under testing .
  • A second data collection on a voluntary basis has been launched in March 2012 in order to consolidate the first results.
  • Discussion with Member States and OECD countries will take place by the summer 2012 in view of definitively setting the list of parameters to be regularly collected by Member States.
  • Based on the results of this second data collection and on preliminary data collected in third countries, and on the results of consultations with Member States, a Communication of the Commission should  propose the Europe 2020 innovation indicator by the end of 2012.
  • Political agreement expected in the European Council conclusions in March 2013.
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Milestone
2012 Assess and discuss with Member States the first results in view of fixing the definitive features of the indicator, including a tentative list of innovative sectors (or sub sectors in the case of less innovative domains).
Type: Other
Milestone
2012 Present and discuss the main definitive features of the indicator
Type: Other
Milestone
2012 Proposal of Europe 2020 innovation indicator .
Type: Other
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Lead Directorate-General/Unit, Head of Unit

DG Research Unit C6, Pierre Vigier

Other Directorates-General/Units associated

ENTR D1, Katja Reppel

ESTAT /F4 /G2, Merja Hult, Manfred Schmiemann

SG D1

Key external partners

European Council

Member States

Statistical Offices

OECD

Experts in innovation measurement and business innovators

Member States

Statistical Offices

OECD

Experts in innovation measurement and business innovators

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