Is the Economic Crisis Impairing Convergence in Innovation Performance across Europe?

Abstract: Are EU Member States converging in terms of their innovative effort? To what extent is the current economic downturn impairing the convergence across the European Union countries in innovation performance? Using macro and micro data, this article shows that the EU Member States have converged in their innovative potential over the 2004–08 period. The economic crisis of Autumn 2008 has an impact on innovative investment in almost all EU countries, but the catch-up countries are the most affected, leading to increasing divergence. The danger of growing disparities in innovative capabilities may lead to divergence also in income and well-being. The article discusses some of the innovation policies that can be carried out at the EU level to facilitate cohesion.