Transatlantic Subnational Innovation Competitiveness Index 3.0

However, as countries seek to improve their innovation capacity through national strategies, they often overlook substantial subnational differences in innovativeness. This report seeks to close those gaps by analyzing the subnational innovation competitiveness of 13 countries: Austria, Albania, Bosnia and Herzegovina, Bulgaria, Germany, Greece, Hungary, Italy, North Macedonia, Poland, Serbia, Sweden, and the United States.

Since the last iteration of this report, innovation’s relevance to states’ global economic standing has only grown. In a time marked by rapid technological change, supply chain disruptions, and geopolitical uncertainty, nations and regions alike must continually advance their competitiveness through innovation. Furthermore, China’s explicit challenge to the techno-economic leadership of the United States and its transatlantic allies demands a strategic response. Mario Draghi’s 2024 report underscores the European Union’s lagging competitiveness, while U.S. presidents Trump and Biden have prioritized amplifying American innovation in key technology areas during each of their presidencies.1

Ecosystems that support scientific and technological development require substantial coordination and foresight. Research institutions, universities, start-ups, corporations, investors, and government bodies must collaborate to develop and diffuse knowledge and technologies, drawing on skilled individuals, robust infrastructure, and extensive funding (especially for research and development [R&D]), to support experimentation and implementation.

National and subnational ecosystems work in tandem to supply ingredients. While national governments may be responsible for setting regulatory policies, establishing education systems, and developing funding mechanisms, subnational actors make policy decisions that recognize unique local talent pools, resources, infrastructure, and industry capabilities. Thus, it is crucial to consider both national and subnational benchmarks for competitiveness to understand how regions and nations alike can maximize their potential for innovation and growth.

The Global Innovation Index (GII) and the European Innovation Scorecard (EIS) are prominent tools that provide comprehensive assessments of innovation performance on a global and regional scale. The GII offers a multidimensional perspective on innovation, evaluating factors such as R&D investments, human capital, and business sophistication, which collectively contribute to a country’s innovation capacity.2 Similarly, the EIS provides a detailed analysis of innovation trends and capabilities within EU member states, facilitating benchmarking and policy evaluation.3

In line with the GII and EIS, the Global Trade and Innovation Policy Alliance (GTIPA) has contributed significantly to the discourse on innovation competitiveness through its series of insightful subnational innovation competitiveness reports, which provide nuanced insights into the intricate relationships between innovation, economic development, and regional competitiveness, offering valuable perspectives for policymakers, businesses, and researchers alike. This report, the “Transatlantic Subnational Innovation Competitiveness Index 3.0,” builds on two prior iterations of the Index, expanding the analysis to cover 213 regions in 13 countries. This report also, for the first time, includes an indicator on artificial intelligence (AI).