How and where

The years 2014 and 2015 were still marked by the downturn that destabilised the economies in developed countries around the world. However, not every country was affected in the same way or to the same degree: those regions whose production models hinged on innovation – in whatever form it takes – felt the consequences to a lesser extent, many of them even growing stronger as they went through it.

The latest Global Innovation Index (GII) report acknowledges the key role played by innovation as a driving force for development and economic growth. The report ranks the innovation performance of 141 countries and economies around the world, based on 79 indicators related to institutions, human capital, infrastructure, market development, knowledge, technology and creative outputs. The GII top ten economies are Switzerland, UK, Sweden, Finland, Netherlands, USA, Singapore, Ireland, Luxembourg and Denmark. All these countries are highly developed and boast high living standards.

Seven of the top ten economies belong to small countries, with less than 10 million inhabitants. The British innovation foundation Nesta refers to them in When Small is Beautiful. Both the GII and the Nesta reports highlight the importance of innovation to small countries, which can take advantage of innovative ideas and opportunities in spite of their size if they have governments that support technology and innovation, and institutions that are flexible and robust. This kind of countries or regions experience innovation as a mission. According to Nesta, Euskadi is among them.


When the first symptoms of the economic downturn could be felt, Europe responded with a ten-year growth strategy to be implemented between 2010 and 2020. The so-called Europe 2020 strategy focuses on three types of growth:

  • Smart growth, which means developing economies based on knowledge and innovation, which in turn requires to improve performance in education, research, innovation and digital transformation.
  • Sustainable growth, which has to do with economies making a more efficient use of resources, i.e. greener, more competitive economies.
  • Inclusive growth, which leads to economies with high employment rates and strongly cohesive, both socially and geographically.

Europe 2020 features several flagship initiatives, like Innovation Union, aimed at improving access to funding for research and innovation in order to achieve smart growth. Budgeted at almost €80,000 million for the period 2014-2020, Horizon 2020 is the EU Framework Programme for the implementation of this initiative.

Horizon 2020 is divided into sections or pillars, such as Excellent Science, Industrial Leadership or Societal Challenges like health, the bioeconomy, energy, transport, climate action, inclusive, innovative and reflective societies, and secure societies.

This is Europe’s strategy to face its main competitors; South Korea, USA, Japan, China, Brazil, India and Russia. Although innovation rates have slowed down in the latter three over the past few months, China continues to narrow the gap with Old Europe.


Euskadi, a small, densely populated region with few natural resources, has chosen innovation economics – a long-term project involving public-private cooperation to become an innovative society competing on a global scale while enhancing business competitiveness.

According to the European Commission’s Innovation Union Scoreboard and Regional Innovation Scoreboard reports, Euskadi stands close to EU-27 leaders. Along with Navarra, it is the only region in the Spanish State to be among strong innovators, high above most EU regions.


NB: Columns in grey show values of the previous year, based on IUS 2015.

Source: Innovation Union Scoreboard (IUS) – Eustat and EC.


Sustainable growth and human development are two of the commitments made in the Euskadi 2020 Science, Technology and Innovation Plan (PCTI) – a plan to place Euskadi among the European leaders in research and innovation. Smart growth, which is the result of an economy based on knowledge and innovation, is closely related to the smart specialisation strategy.

It rests on cooperation between companies, research centres and universities to increase competitiveness, identifying high value-added activities which may lead to product or service development and thus create wealth and jobs.