Comparison of Innovation Policies Between the European Union and the United States of America

Introduction

Transformative innovation is crucial to stimulate technological and economic development, to promote business, or to ensure employment and financial return of investments (EPO & EUIPO, 2019). Innovation is a broad concept. For instance, new products or processes (more or less disruptive) or new forms of organization, management, or marketing in companies are considered innovative outcomes. Ideally, innovative outcomes should be more efficient than any previous solution in the market (Caraça et al., 2008). In this sense, entrepreneurial companies with new products and/or projects, such as startups (innovative emerging companies, such as some small and medium-sized enterprises) are potentially eligible to be supported by public and/or private policies (Torres et al., 2017).

Governance policies, including industrial policy, regulation, patent system, education, and funding, seem to play a crucial role in the promotion of innovation in diverse sectors (Andreoni & Chang, 2019; Congressional Budget Office, 2017). The exposure of companies to the global market, trade and flow of ideas can lead to more competitive and optimized business practices. These practices are likely to boost the productivity and efficiency of companies. In general, innovative business tend to be more competitive, specialized, and efficient than conventional business (Aspen Institute, 2019).

Between 2014 and 2016 in EU, 29.2% of jobs were ensured by companies/industries that owned and/or marketed trademarks and patents (about 2/3 of these industries marketed more than one Industrial Property Right - IPR). Overall, 63 million of people were employed in these industries, with 83.8 million of workers if taking indirect jobs into account. Industries intensively exploring IPRs provided better salaries, encompassed the majority of EU trade, and accounted for 45% of the EU's economic activity in terms of gross domestic product (GDP) (6.6 trillion euros). These companies achieved a trade surplus, which contributed to keep balanced the EU's foreign trade. Particularly, industries involved in the development of climate change mitigation technologies (CCMTs) or in the development of technologies related to the Fourth Industrial Revolution (4IR) have grown in the EU: CCMTs industries were related to 2.5% of employment and 4.7% of GDP, while 4IR industries were related to 1.9% of employment and 3.9% of GDP in 2014-2016 (EPO & EUIPO, 2019).

The Global Innovation Index (GII) was launched by the World Intellectual Property Organization (WIPO) in 2007. The calculation of GII is based on innovation metrics from more than 130 countries. This indicator goes beyond the traditional quantifications of the number of PhDs per country, the number of scientific papers or the investment in Research and Development (R&D) (WIPO, 2019). The GII is composed of diverse indicators, which are based on innovation inputs (e.g., resources in terms of institutions, human resources, infrastructure or sophistication of the market and business) and innovation outputs (e.g., creative, and scientific outputs: products, or processes) (WIPO, 2011). According to the Global Innovation Index (GII), the leading economies were located in North America, followed by Europe and Southwest Asia, East Asia, and Oceania (by geographic areas) in 2020. Regarding the 2020 GII ranking, innovation inputs and outputs were located in certain regions of the globe. These innovations were related to specific research areas. Thus, products or process should be diversified in both developed and developing countries (i.e., more and better innovation) (WIPO, 2019, 2020).

In this sense, the study aim was to carry out a brief review about the innovation policies in EU and USA, followed by their comparison and critical evaluation.