Sweden reclaims top spot as European innovation reaches €118.9bn milestone

The European Commission released the European Innovation Scoreboard 2025 on July 15, 2025, revealing Sweden's return to the pinnacle of European innovation performance after Denmark held the top position from 2020 to 2024. The comprehensive analysis, spanning 27 EU member states and 12 neighboring countries, utilizes 32 indicators across four performance categories to assess innovation capabilities.

According to the European Innovation Scoreboard methodology report, Sweden achieved its highest performance through leadership in eight key indicators, including R&D expenditure in the business sector, cloud computing in enterprises, and production-based CO₂ productivity. The country increased its score by 12.9 percentage points compared to 2018 baseline measurements and gained 2.0 percentage points in the past year alone.

The 2025 scoreboard employs a revised indicator framework that integrates five updated metrics aligning with EU research and innovation policy priorities. These include two digitalization indicators and measures of external high-tech dependence, CO₂ productivity, and labor productivity. The Summary Innovation Index provides comparable scores relative to the EU average, with 2025 data representing the most recent available statistics.

Executive Vice-President Stéphane Séjourné emphasized the transformation occurring across European markets. "The decline in SME collaboration and R&D investment in some Member States is a red flag. We must simplify regulations, boost cross-border digital infrastructure, and foster partnerships between startups and established businesses to unlock Europe's full potential. Innovation is not just about technology - it's about creating ecosystems where ideas thrive and scale," Séjourné stated.

Commissioner Ekaterina Zaharieva highlighted the strategic importance of sustained progress. "Research and innovation are at the heart of our competitiveness strategy. The 2025 scoreboard confirms our long-term progress, but also highlights the urgent need to do more and to close persistent gaps between the different parts of Europe. We are already making meaningful steps forward - through our strategies for startups and scaleups, life sciences and AI in science. This week, we will table proposals for the EU's next long-term budget and the next research and innovation programme. These will be key to driving a more sustainable and competitive Europe in the years ahead," Zaharieva explained.

The Innovation Leaders category encompasses four countries with performance exceeding 125% of the EU average. Denmark maintains second position despite losing the top ranking, followed by the Netherlands and Finland completing this elite group. These nations demonstrate sustained excellence across multiple innovation dimensions, with Denmark and Sweden creating increasing performance gaps within this category.

Strong Innovators include seven countries performing between 100% and 125% of the EU average. Ireland leads this group with 13.3 percentage points growth since 2018 and 4.1 percentage points year-over-year improvement. Belgium follows closely at 0.5 percentage points behind Ireland, with Luxembourg, Austria, Germany, France, and Estonia completing the Strong Innovators classification.

The Moderate Innovators group contains ten countries with performance between 70% and 100% of the EU average. Malta leads this category, followed by Slovenia, Italy, Spain, Portugal, Cyprus, Lithuania, Czechia, Greece, and Croatia. This group demonstrates varied performance trajectories, with some countries showing significant improvement while others maintain steady progress.

Six countries comprise the Emerging Innovators category with performance below 70% of the EU average. Hungary, Poland, Slovakia, Latvia, Bulgaria, and Romania represent this group, though several demonstrate notable improvement trajectories. The analysis reveals moderate reduction in performance disparities from 2018 to 2025, suggesting slight convergence at the EU level.

Innovation dimension analysis reveals specific strengths and weaknesses across member states. Human resources indicators show varied performance in new doctorate graduates, lifelong learning participation, and tertiary education attainment. Research systems demonstrate significant differences in public-private collaboration, international scientific co-publications, and most cited publications.

Digital transformation metrics highlight the growing importance of technological adoption across European markets. Cloud computing adoption in enterprises, high-speed internet access, and digital infrastructure development contribute substantially to overall innovation performance. These indicators align with broader digital advertising market growth, which reached €118.9 billion with 16% expansion in 2024.

The intellectual assets dimension encompasses trademark applications, design applications, and PCT patent applications per billion GDP. These metrics reflect the commercial application of innovation capabilities and demonstrate varying strengths across member states. Switzerland leads the enlarged ranking including neighboring countries, outperforming all EU member states despite recording a 1.6 percentage point decrease compared to 2024.

For the marketing and advertising technology sector, the scoreboard results provide valuable context for understanding regional innovation capabilities that drive industry development. European retail media spending has outpaced the broader advertising market by nearly four times, with innovation capabilities directly correlating with technological adoption in advertising platforms.

The methodology employs data from Eurostat and international sources with a cut-off date of May 2025. The calculation process utilizes the COINr package developed by the European Commission's Competence Centre for Composite Indicators and Scoreboards, ensuring transparency and replicability. The European Commission's Joint Research Centre audited the statistical robustness of the Summary Innovation Index.

Regional performance variations reflect structural economic differences and policy approaches across member states. Western European countries generally demonstrate higher innovation performance, while Eastern European nations show varied trajectories with some achieving significant improvement rates. The coefficient of variation analysis indicates moderate convergence trends across the EU, though disparities persist within performance groups.

Complete European Innovation Rankings 2025

Innovation Leaders (Above 125% of EU Average)

1. Sweden reclaimed the top position after Denmark's four-year leadership reign from 2020-2024. The Nordic country achieved excellence through leadership in eight key indicators, including R&D expenditure in the business sector, cloud computing adoption in enterprises, and production-based CO₂ productivity. Sweden's performance increased 12.9 percentage points since 2018 and gained 2.0 percentage points year-over-year, demonstrating sustained innovation momentum across multiple dimensions.

2. Denmark maintained second position despite losing the top ranking it held from 2020 to 2024. The country continues demonstrating strong innovation performance above 125% of the EU average, contributing to growing disparities within the Innovation Leaders group as both Denmark and Sweden pull ahead of other high-performing nations.

3. Netherlands secured third position among Innovation Leaders, maintaining performance above 125% of the EU average. The country demonstrates consistent innovation capabilities across multiple dimensions, contributing to the overall strength of the Innovation Leaders category.

4. Finland completes the Innovation Leaders group with performance exceeding 125% of the EU average. Despite holding the fourth position within this elite category, Finland maintains strong innovation performance across the comprehensive framework of 32 indicators.

Strong Innovators (100-125% of EU Average)

5. Ireland leads the Strong Innovators group with remarkable improvement trajectory, growing 13.3 percentage points since 2018 and 4.1 percentage points in the past year alone. The country's performance positions it just ahead of Belgium by 0.5 percentage points, demonstrating significant momentum in innovation capabilities.

6. Belgium follows closely behind Ireland within the Strong Innovators category, separated by only 0.5 percentage points. The country maintains solid performance above the EU average, contributing to the renewed divergence within this group due to varying improvement rates among member states.

7. Luxembourg holds the third position among Strong Innovators, though the country experienced the smallest increase in innovation performance compared to other EU nations, growing only 0.9 percentage points since 2018. Despite modest growth, Luxembourg maintains performance above the EU average.

8. Austria demonstrates solid innovation performance within the Strong Innovators group, maintaining capabilities above the EU average across the comprehensive indicator framework spanning human resources, research systems, digitalization, and intellectual assets.

9. Germany represents one of Europe's largest economies within the Strong Innovators category, maintaining performance above the EU average despite facing challenges in certain innovation dimensions. The country's position reflects substantial innovation infrastructure and capabilities.

10. France continues its position within the Strong Innovators group, demonstrating performance above the EU average while facing ongoing challenges to advance toward Innovation Leader status. The country maintains strong capabilities across multiple innovation dimensions.

11. Estonia completes the Strong Innovators category with the most significant improvement among this group, achieving 30.0 percentage points growth since 2018. This exceptional performance trajectory positions Estonia as a notable success story in European innovation development.

Moderate Innovators (70-100% of EU Average)

12. Malta leads the Moderate Innovators group with notable year-over-year improvement, gaining 7.6 percentage points compared to 2024. This represents the strongest single-year improvement among all member states, positioning Malta at the top of countries performing below the EU average.

13. Slovenia maintains the second position within Moderate Innovators, demonstrating steady performance below the EU average while working toward advancement into higher performance categories through sustained improvement efforts.

14. Italy holds the third position among Moderate Innovators, representing one of Europe's major economies performing below the EU average. The country continues working to enhance innovation capabilities across multiple dimensions.

15. Spain maintains its position within the Moderate Innovators group, demonstrating performance below the EU average while pursuing strategies to advance innovation capabilities and move toward Strong Innovator status.

16. Portugal continues within the Moderate Innovators category, working to enhance innovation performance across the comprehensive framework of indicators spanning research systems, digitalization, and intellectual assets development.

17. Cyprus experienced significant challenges in 2025, recording the most substantial decline among all member states with a 14.6 percentage point decrease compared to 2024. This performance highlights the need for strategic intervention to restore innovation momentum.

18. Lithuania maintains its position within Moderate Innovators, demonstrating steady performance below the EU average while pursuing policies to enhance innovation capabilities across multiple dimensions.

19. Czechia faced notable challenges in 2025, experiencing an 8.4 percentage point decline compared to 2024, representing the second-largest decrease among member states. This performance indicates areas requiring focused improvement strategies.

20. Greece continues within the Moderate Innovators group, maintaining performance below the EU average while working to develop innovation capabilities and advance toward higher performance categories.

21. Croatia demonstrates notable improvement trajectory among Moderate Innovators, showing positive momentum in innovation performance despite remaining below the EU average. The country represents a success story in gradual advancement.

Emerging Innovators (Below 70% of EU Average)

22. Hungary leads the Emerging Innovators group, demonstrating the strongest performance among countries below 70% of the EU average. The country maintains steady progress while working to advance toward Moderate Innovator status.

23. Poland holds the second position within Emerging Innovators, showing significant improvement opportunities while maintaining progress toward enhanced innovation capabilities across multiple dimensions.

24. Slovakia continues within the Emerging Innovators category, demonstrating steady performance below 70% of the EU average while pursuing strategies to advance innovation capabilities and economic competitiveness.

25. Latvia maintains its position among Emerging Innovators, working to enhance innovation performance across the comprehensive framework while addressing structural challenges to advancement.

26. Bulgaria experienced notable challenges in 2025, recording a 2.2 percentage point decline compared to 2024. The country continues working to strengthen innovation capabilities and reverse negative performance trends.

27. Romania holds the final position among EU member states, demonstrating the greatest improvement opportunities across all innovation dimensions. The country continues developing strategies to enhance innovation performance and advance toward higher categories.

Neighboring Countries Performance

Switzerland leads the overall enlarged ranking including neighboring countries, outperforming all EU member states despite recording a 1.6 percentage point decrease compared to 2024 and 1.7 percentage point decline since 2018.

United Kingdom achieved Innovation Leader status with 12.2 percentage points improvement since 2018, ranking fifth among all European countries and demonstrating significant innovation capabilities outside the EU framework.

Norway ranks third among Strong Innovators in the enlarged ranking, performing at 121.6% of the EU average despite a 0.9 percentage point decrease compared to 2024. The country builds on a 13 percentage point increase since 2018.

Iceland ranks sixth among Strong Innovators, outperforming Germany, France, and Estonia despite a marginal 0.1 percentage point decrease compared to 2024.

The remaining eight neighboring countries fall within the Emerging Innovators category: Türkiye leads this group with 2.7 percentage point improvement compared to 2024, followed by Serbia with the strongest growth among neighboring countries at 10.2 percentage points since 2018. Albania, Montenegro, and Bosnia and Herzegovina achieved the highest year-over-year growth with 4.4%, 3.1%, and 3.0% percentage point increases respectively.

Data availability varies across indicators and countries, with the methodology addressing missing values through systematic imputation procedures. Reference year data utilizes the most recent available statistics, with 2024 data for 11 indicators, 2023 data for 10 indicators, and 2022 data for 10 indicators. Complete data availability exists for 25 member states.

The automation process represents a significant advancement in scoreboard methodology. The 2025 edition employed automated data collection and calculation processes, providing enhanced reproducibility and streamlined analysis. This technical improvement enables more frequent updates and consistent methodology application across annual editions.

Performance indicators span four main pillars: human resources, research systems, digitalization and technological readiness, and use of information technologies. Each pillar contains multiple dimensions addressing specific aspects of innovation performance. The framework evolution reflects changing socio-economic contexts and corresponding policy responses across European markets.

The study's expanded scope encompasses 30 European markets, including newcomer Portugal. This comprehensive coverage provides detailed insights into innovation performance across diverse economic and technological environments. The addition of Portugal completes coverage of Western European markets, though data limitations required estimation procedures for certain indicators.

Innovation ecosystem analysis reveals the importance of public-private collaboration, venture capital availability, and entrepreneurial activity. These factors contribute significantly to overall innovation performance and highlight areas requiring policy attention. The scoreboard identifies specific strengths and weaknesses for each country, enabling targeted improvement strategies.

For advertising technology companies and marketing professionals, the scoreboard results correlate with market opportunities and technological capabilities across European regions. Countries with higher innovation performance typically demonstrate greater adoption of advanced advertising technologies, programmatic capabilities, and digital marketing sophistication.

Timeline

• July 2001: First European Innovation Scoreboard published following pilot edition in 2000
• 2018: Baseline year established for current measurement framework
• Late 2024: Revision process undertaken for EIS 2025 indicator framework
• Early 2025: Five indicators updated to align with EU R&I policy priorities
• May 2025: Data collection cut-off date for EIS 2025 analysis
• July 15, 2025: European Innovation Scoreboard 2025 released
• Related context: European digital advertising market surpassed €100 billion for first time in 2024
• Industry development: IAB Europe released updated retail media definitions for European markets
• Technology advancement: Digital advertising leaders converged for IAB Europe's H1 2025 insights

Key Terms Explained

Summary Innovation Index (SII)

The Summary Innovation Index represents the cornerstone metric of the European Innovation Scoreboard, providing a single comparable score reflecting overall innovation performance. Calculated as an unweighted average of 32 indicators, the SII assigns equal weight to each metric while presenting performance relative to the EU average rather than absolute values. This methodology ensures fair comparison across diverse economic structures while enabling tracking of progress over time through baseline year indexing to 2018.

Innovation Leaders

Innovation Leaders constitute the elite performance category encompassing countries achieving above 125% of the EU average in innovation capabilities. This exclusive group includes Sweden, Denmark, Netherlands, and Finland, representing nations with exceptional research systems, digitalization adoption, and intellectual property generation. The category demonstrates increasing internal disparities as top performers like Sweden and Denmark create growing performance gaps, reflecting accelerated innovation development in leading economies.

Strong Innovators

Strong Innovators represent countries performing between 100% and 125% of the EU average, forming the largest high-performing group with seven member states. Ireland leads this category with remarkable growth trajectory, followed by Belgium, Luxembourg, Austria, Germany, France, and Estonia. This group shows renewed divergence due to varying improvement rates, with countries like Estonia achieving exceptional 30 percentage point growth while others maintain steady but modest advancement.

Moderate Innovators

Moderate Innovators encompass ten countries performing between 70% and 100% of the EU average, representing the largest performance group within the European Union. Led by Malta with significant year-over-year improvement, this category includes Slovenia, Italy, Spain, Portugal, Cyprus, Lithuania, Czechia, Greece, and Croatia. The group demonstrates varied trajectories with some countries showing notable progress while others face challenges requiring strategic intervention to maintain innovation momentum.

Digitalization Indicators

Digitalization indicators represent updated metrics within the revised 2025 framework, emphasizing technological adoption and digital infrastructure development across European markets. These measurements include cloud computing adoption in enterprises, high-speed internet access, and digital transformation capabilities that correlate directly with advertising technology sophistication. The indicators reflect growing importance of digital capabilities in innovation performance and economic competitiveness.

R&D Expenditure

Research and Development expenditure serves as a fundamental indicator measuring investment in innovation capabilities across public and private sectors. The metric encompasses business sector R&D spending, government support for research activities, and collaborative public-private research initiatives. Countries excelling in R&D expenditure, particularly Sweden's leadership in business sector investment, demonstrate sustained commitment to innovation development and technological advancement driving long-term competitiveness.

Percentage Points Growth

Percentage points growth represents the standard measurement unit for comparing innovation performance changes over time within the European Innovation Scoreboard framework. Unlike percentage growth, this metric provides direct comparison of performance shifts relative to baseline measurements, enabling precise tracking of country advancement. Estonia's exceptional 30 percentage points growth since 2018 exemplifies significant innovation improvement, while Cyprus's 14.6 percentage points decline highlights performance challenges.

EU Average Performance

EU average performance establishes the central benchmark for all innovation measurements within the scoreboard framework, representing collective innovation capabilities across 27 member states. Countries achieve classification into performance groups based on their relationship to this average, with scores above 125% qualifying for Innovation Leader status. The methodology enables relative performance assessment while tracking collective European innovation development over time.

Patent Applications

Patent applications per billion GDP represent crucial intellectual assets indicators measuring commercial innovation output and technological advancement across European markets. The metric utilizes PCT (Patent Cooperation Treaty) applications to ensure international comparability while adjusting for economic size through GDP normalization. High patent application rates indicate robust innovation ecosystems capable of generating commercially viable technologies and protecting intellectual property rights.

Neighboring Countries Analysis

Neighboring countries analysis expands the scoreboard scope beyond EU member states to include 12 European nations providing comprehensive regional innovation assessment. Switzerland leads this enlarged ranking despite slight performance decline, while the United Kingdom achieved Innovation Leader status following Brexit. The analysis reveals varied performance among non-EU countries, with four nations exceeding EU average performance and eight falling within Emerging Innovators category, demonstrating diverse innovation capabilities across the broader European landscape.

Summary

Who: The European Commission's Directorate-General for Research and Innovation published the European Innovation Scoreboard 2025, analyzing performance across 27 EU member states and 12 neighboring countries.

What: Sweden reclaimed the top position in European innovation performance, with the scoreboard revealing a 12.6 percentage point increase in EU innovation performance since 2018 using a revised framework of 32 indicators across four performance categories.

When: The European Innovation Scoreboard 2025 was released on July 25, 2025, with data representing the most recent available statistics through May 2025.

Where: The analysis covers 27 EU member states plus 12 neighboring European countries including Switzerland, the United Kingdom, Norway, and Iceland, with Sweden leading the Innovation Leaders category.

Why: The scoreboard provides comparative analysis enabling policymakers to identify priority areas for enhancing innovation capacity, supporting evidence-based policy development across European markets while highlighting persistent performance gaps requiring strategic attention.