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Innovation Scoreboard for 2008 is published. As stated in this publication, Innovation leaders are: Sweden, Finland, Germany, Denmark and UK. Above EU average are Austria and France and below are Italy, Greece, Spain, Portugal and all "new" members.Fast growers in catching-ip countries are Bulgaria & Romania. Croatia and Lithuania are ranked as slow growers :(It is noted that EU is decreasing it's innovation gap with US and Japan, have a look: link

Once more I will look back to european innovation scoreboard, in the picture you can see the groups of countries depending of their innovation index and the percentage of change in relation to last 4 years.
The 2007 European Innovation Scoreboard (EIS) was published today. Inno-leaders are Sweden, Finland, Germany, UK, USA... Inno-followers include Austria, France, Ireland... Moderate innovators are Czech republic, Italy, Slovenia... And finally catching-up countries Bulgaria, Croatia (!), Greece, Hungary, Poland, Romania, Slovakia...
What's most interesting is to see how it's determined, so here'sthe list of Innovation indicators:
1.1 S&E graduates
1.2 Population w ith tertiary education
1.3 Broadband penetration rate
1.4 Participation in life-long learning
1.5 Youth education attainment level
2.1 Public R&D expenditures
2.2 Business R&D expenditures
2.3 Share of medium-high/high-tech R&D
2.4 Enterprises receiving public funding for innovation
3.1 SMEs innovating in-house
3.2 Innovative SMEs co-operating w ith others
3.3 Innovation expenditures
3.4 Early-stage venture capital
3.5 ICT expenditures
3.6 SMEs using organizational innovation
4.1 Employment in high-tech services
4.2 Exports of high technology products
4.3 Sales of new -to-market products
4.4 Sales of new -to-firm products
4.5 Employment in medium-high/high-tech manufacturing
5.1 EPO patents per million population
5.2 USPTO patents per million population
5.3 Triad patents per million population
5.4 Community trademarks per million population
5.5 Community industrial designs per million population
Janez Potočnik, member of the European Commission for Science and Research said The Future of Europe Lies in Knowledge at the National Forum on Europe, in Dublin:
"We want to improve our quality of life and remain globally competitive. If we think about how best to achieve that, we can consider cutting costs or improving our productivity. Looking at the costs, then there are limited possibilities. I've not met many people who really want to drive down wages or drastically cut back on our social security standards. And even after we've made improvements in the flexibility and mobility of our labour markets, and we've engaged in reforms to cope with the ageing of our population, we will not have done enough to keep up with our international competitors. So we don't have much of a choice; we must increase our productivity. That means we have to create and apply new knowledge. And if we want to do that, there are three things that we have to improve: education, research and innovation." Link