While 42 per cent of EU27 enterprises are actively engaged in innovation, only 21 per cent of Maltese enterprises can say the same of their operations, according to the Fourth Community Innov-ation Survey released by the European Commission yesterday.

Germany led the EU ranks at 65 per cent and was followed by Austria, Denmark and Iceland. The only countries underperforming Malta were Latvia (18 per cent) and Bulgaria (16 per cent), while Hungary matched Malta’s 21 per cent.

The findings for Malta, however, may not necessarily reflect the whole Maltese reality since the data set for the survey included only the years 2002-2004. In the meantime Malta has taken a number of steps to foster a more innovative society and private sector, but it cannot be discounted that the rest of the EU has also taken similar steps during the interim two years.

At any rate, according to the survey of indicators available for 2005 the survey notes that Malta’s innovation performance is comparable to the EU-25 average only in the applications index, which measures the performance expressed in terms of labour and business activities and their value added in innovative sectors. It adds that in all the other groups, except for that of entrepreneurship, for which there are no data available, Malta’s performance is weaker.

Looking at 2004 data for each indicator, the area of applications was the best performing group, with 56 per cent of exports being of a hi-tech nature, as well as in new-to-market products, which accounted for 13.6 per cent of total turnover.

The indicators of “new to firm” product sales and information and communication technologies were also found to be above EU average levels.

Malta’s weakest performance, however, was in the area of patents and community designs, followed by

business research and development expenditures and small to medium-sized enterprises innovating in-house.

The survey also notes that Malta’s trend has been positive in a number of indicators, in particular in terms of medium-high tech manufacturing research and development, organisational innovation and in sales of new to market and new to firm products.

The level of science and engineering graduates and lifelong learning, however, was found to be still low, although the report notes improvements being made in 2002 and 2004 respectively.

The level of business research and development expenditure was, however, found to be very low, but that it has grown and appears to be on a positive trend, having grown from 0.07 per cent to 0.45 per cent in three years.