Urenio Watch Watch: Innovation

Innovation in Services

The fourth Community Innovation Survey made available data on innovation in the service sector. This opened the way to extending research into comparing innovativeness in the service and the manufacturing sectors.

Data in the Figure demonstrate differences between innovativeness in manufacturing and in services for 14 EU countries, Switzerland, Iceland and Norway12. The vertical axis gives a composite index for services and the horizontal axis gives a composite index for manufacturing. Both use re-scaled data for eight indicators. Of note, the index in both cases is relative to the performance of other countries in services and in manufacturing.

A higher score in one sector does not mean that the country has an absolute level of innovation that is higher in this sector (even if it were possible to develop an indicator for absolute innovation performance in the service and manufacturing sectors).

Countries above the dotted line perform relatively better in services compared to other
countries, those below perform relatively better in manufacturing. Data availability is good for most countries except for both manufacturing and services for Luxembourg, Switzerland and Iceland and for services for the UK.

For the EU-15, the share of services in business R&D has increased from 8% in 1992 to 13% in 1999. In the US, service take up an even bigger share of business R&D, increasing from 24% in 1992 to 34% in 2000. Japan presents a contrasting picture with a 0.2% share in 1992, increasing to only 2% in 2000.

Source: European Innovation Scoreboard 2003 – Indicators Methodological Report