Working Papers

A. Wirkierman, T. Ciarli, M. Savona: A Taxonomy of European Innovation Clubs

The paper provides a novel, empirically grounded map of innovation ‘clubs’ in the EU, based on a unique analysis of micro-aggregated, country-level data. Using exploratory factor analysis we articulate innovation variables in a tax- onomy of four ‘latent’ innovation theories: Network-Innovation-System, Kaldo- rian, New-Growth-Theory, and Schumpeterian. We then characterise clusters of countries (‘clubs’) based on their performance against this taxonomy, and design a new map of EU innovation clubs. We identify an articulated map of the EU innovation hierarchy beyond the rather well-known ‘core-periphery’ structure and interpret how some of the peripheries are functional to the ‘consol- idated core’ of innovative countries, raising an issue of long-term sustainability of such hierarchies. We also find that even the most innovative clusters show concerning weaknesses. The strongest cluster in terms of its innovation system does not seem to exploit its full potential and lags behind with respect to radi- cal product innovations. Instead, the leading cluster in terms of radical product innovations is strongly dependent on external innovative activity, is focused on scale-intensive sectors, and has a fairly weak innovation system. The periphery of small countries that show a healthy network structure do so because they mainly include supplier-dominated firms that are reliant on innovation inputs from the core. We offer some reflections on innovation policy within a broader view of EU cohesion.

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