UK tech pioneers fail to match best of Europe

As Scandinavia continues its dominance in high-tech innovation, Britain is falling behind the pace of change in Europe's knowledge industries.

A new league table from the European Commission which is due to be released on 1 October but has been obtained exclusively by silicon.com places the UK third in terms of technology innovation behind Sweden and Finland.

It warns Tony Blair's drive to put Britain at the vanguard of change is running out of steam.

France and Germany also perform badly in the report. The two powerhouses of Europe's economy are classed as average in terms of current innovation, but are both falling behind the pace of development.

In contrast some of Europe's least technologically advanced countries like Greece, Luxembourg and Spain, are catching up with their more powerful neighbours at a greater rate of change.

Unsurprisingly, Scandinavia dominates the list, with Sweden, Finland and Denmark all performing strongly. A surprise appearance alongside the Nordic innovators is Ireland, which has ploughed extensive investment into its high-tech economy over the last 18 months.

According to Dr Tim Bradshaw, senior policy advisor at the CBI, larger economies always struggle to lead the way in innovation. "It's easier for less developed knowledge economies to make big changes earlier on," he said. "It's a natural progression.

"The problem with innovation is that it's not just one obvious thing, it's training, education, design, R&D - a whole spectrum of things."

Dr Susanna Khavul, assistant professor for entrepreneurship at London Business School, agreed that smaller nations have enjoyed the benefits of rapid change. "When the technology trend was good, it lifted up countries like Greece and Spain," she said.

But the recent severe downturn in the global markets may have affected leading countries like Ireland and Sweden, she added, warning that the Commission's figures may have dated badly in the last few weeks.

The innovation scoreboard was the brainchild of the Lisbon European Council in March 2000, which called on the EU to become "the most competitive and dynamic knowledge-based economy in the world" within a decade.

The scoreboard will be updated annually.