Abstract

Transport is a key enabler of economic and social activity and a major industry in the European economy. However, transport is also a source of environmental concerns and other negative externalities. Improving the efficiency of the transport system, mitigating its negative impacts and increasing the competitiveness of the transport industry are the key challenges of EU policy. Innovation is essential for the European transport strategy to achieve these challenges. Acknowledging the fact that regions are important engines of economic development, regional innovations can be important drivers for growth and improvement of the transport sector in Europe. The innovation process and relative performance of the transport sector at regional level is, however, not extensively studied. In the framework of the European FP7-funded project METRIC a method has been developed to measure and explain the innovation performance of the transport sector at regional level. This paper outlines this method and presents the results of applying this method to 251 European regions. The method is based on structural equation modelling. This modelling technique enables to get scores for the innovation performance of each region and to derive estimations that express the relative importance of the explanatory factors for innovation performance. The analysis showed that the high performing regions were predominantly found in Germany and Sweden, while the low performing regions were located in Finland, Poland, Romania, Bulgaria, Hungary, Spain and United Kingdom. However, the scores of regions on innovation performance are rather different when the performance is measured for the transport manufacturing and transport service sector individually. Among the factors that may explain transport innovat ion performance of regions funding possibilities appear to be highly important, while the relevance of innovation milieu is outmost limited.