Brussels, 14 Mar 2003

The European Commission has published its 2002 trend chart on innovation, which assesses, in particular, Member States' progress towards the objectives set out in the 2000 communication on innovation.

The report draws on a number of sources, ranging from the innovation scoreboard and a database of innovation policy measures, to a series of policy benchmarking workshops. Each objective outlined in the 2000 Communication is addressed individually using concrete examples.

In response to the call for improved coordination of innovation policy, the report states that there is a growing awareness among policy makers of the potential benefits of transnational learning. This is illustrated by the Dutch government, which has carried out a comparative study on innovative polices, and Irish policy makers who are currently gathering information from public research institutions.

However, according to the trend chart, issues such as `cross-departmentalism', which disperses innovation across ministries, thus leaving it with no administrative home, still remains an obstacle to effective policy coordination.

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Yet despite these obstacles, the report shows that Member States have widely accepted the rationale for periodic target setting, monitory evaluation and peer review, as stipulated in the Communication. For instance, the UK boasts a very advanced system of evaluation and accountability - proposals for new innovation programmes require not only a statement of rationale, objectives, and appraisal, but also viable monitoring, evaluation and feedback mechanisms.

Measures to improve the knowledge transfer between public research institutions to industry are also on the increase. However, according to the report, limited progress has been made towards improving the benchmarking of partnerships between these sectors.

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With regard to fiscal incentives, the report states that Member States are actively developing taxation methods that drive innovation forward: Spain is the first country planning to address the issue of tax deductible innovation expenditure, such as investment in innovative equipment, and network creation.

However, for the most part, research and development (R&D) tax credits remain the most widely used fiscal instrument of innovation policy. According to the trend chart report, the focus on research tends to discriminate against small and medium sized enterprises (SMEs), which rarely have the capacity to carry out research in house, and to innovate through activities such as technology transfer, training and industrial design.

In general, there has been a positive response to calls for improving the efficiency of business incubators and the establishment of new schemes of entrepreneurship and innovation management education and training, notes the study.

The report identifies greater collaboration between universities and industry, with the introduction of mobility schemes to support the mobility of researchers between public research institutions and private sector companies. For instance, Sweden has extended its provision in this area with the creation of 16 new graduate research schools, while Spain has recently introduced two programmes to increase mobility in its scientific and technological community.

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Similarly, many lifelong learning strategies or action plans have also been put in place throughout Europe with a view to opening up innovation to society at large.

The trend chart report not only reviews Member States' progress vis-¨¤-vis innovation policy, it also comments on the current innovation climate in candidate countries. While some countries such as Estonia have made significant progress, the report states that none of the future members have, as yet, a coherent innovation strategy.

Furthermore, while progress has been made in transferring know-how from Member States to candidate countries, it is still getting off the ground. The report notes that geographical and cultural proximity appear to be key in determining policy transfer partnerships.

As regards foresight, the report indicates that the trend is towards involving stakeholders in policy making. For instance, the Austrian council for research and technology development has launched a new programme, which aims to promote the public understanding of the societal and economic importance of research and innovation.

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Finally, it is expected that the information provided in the trend chart will play a part in developing the 'open coordination ' element of innovation policy, which aims to spread good practices throughout Europe. 'To proceed in this direction, Member States could be invited to collaborate with the Commission by giving a higher political profile to the existing trend chart country reports,' concludes the report.

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