EU companies 'must innovate to remain competitive'

Companies in the EU have been urged to improve their performance in terms of innovation in order to keep pace in an increasingly competitive business environment.

Data from the European Commission's innovation union scoreboard for 2011 has showed that almost all member states have progressed in this respect over the last year, but the rate of growth is slowing.

This means that EU businesses are failing to keep pace with the US, Japan and South Korea, the global innovation leaders, while emerging economies such as China are starting to catch up.

Maire Geoghegan-Quinn, commissioner for research, innovation and science for the commission, said national research and innovation systems are needed to create a business environment that is friendly to new thinking.

"We urgently need a European research area to inject fresh competition, generate more excellence and attract and retain the best global talent," she said.

According to Markit data from earlier this week, the EU's private sector economy saw a rise in productivity in January 2012, the first such increase in six months.