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Vision on Innovation - Introduction

In comparison to the US, Europe has been significantly less succesful on capitalising on new market opportunities in general and the formation of large new enterprise in particular for many decades.

Our analysis of the current market capitalization by founding year of all companies in the STOXX 1800 index - representing the 1800 largest companies in the world in terms of market capitalization - shows a remarkable difference between the US and Europe. The figure below shows that only 5% of the market capitalization of the Dutch companies on the STOXX 1800 index comes from companies founded after 1945. Similar data is obtained for other European countries. The corresponding figure for the US is 33%. The inevitable conclusion, we believe, is that Europe compared to the US has been heavily underperforming for decades in the creation of extremely successful fast growing companies.

We have took this observation as a starting point to develop a high level, coherent and actionable vision on innovation and its relation to economic performance.

Many policy documents, consultant's reports and special taskforce recommendations have appeared over the last couple of years in relation to the Lisbon reform program, but, to the best of our knowledge, the key observation made above on the basis of public stock market data, has not been generally recognized and addressed. The importance of fast growing new companies for the creation of jobs and GDP growth, obviously, has been recognized, but Europe's significance underperformance to create such companies has not been a main theme in the debate so-far. We believe it is pivotal to the European innovation policy to gain a better understanding why European has been underperforming so significantly along this dimension and what needs to be done to reverse the trend.

Our story on innovation is structured as follows:

(Click on the arrows in the figure, or use side bar or the menu bar to navigate through the main sections)

Related information

Part of our story was previously published by the Adviesraad voor Wetenschaps- en Technologiebeleid (AWT). Click here to view this document written in the Dutch language (PDF document).


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