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Economics of Industrial Research and Innovation (IRI)

Innovative Firms

  • Topic / Tool | Last updated: 10 Sep 2026
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Innovative firms are essential drivers of economic growth, job creation and technological progress. They introduce new goods and services on the market and improve their business processes. Their innovations make them more competitive by achieving productivity gains and offering differentiated products. Even more importantly, while they generate economic wealth, innovative firms develop more sustainable solutions and facilitate their adoption by consumers and other businesses. Innovative firms are instrumental in ensuring high living standards by fostering economic prosperity and employment while tackling global societal challenges such as climate change, health and food security.

We have a thriving innovation ecosystem in Europe. Beyond our top corporate R&D investors, which are mostly large corporations, we also have many innovative mid-caps and SMEs, including startups, which all play an important role through their networks, collaborations, knowledge sharing and technological diffusion. All these companies create a dynamic environment that benefits the business sector as a whole.

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Innovative firms employ altogether almost 12 million workers in Europe

We have 381,000 innovative SMEs (of which 226,000 are startups) providing around 6.1 million jobs (including 1.2 million jobs in innovative startups). We also have 5,000 innovative mid-caps (of which 3,650 are small mid-caps) providing 1.6 million jobs (including 913,000 jobs in innovative small mid-caps). Finally, our 1,300 innovative large corporations employ around 4.3 million workers. Altogether, innovative firms employ 5.5% of the EU’s workforce.

 

Innovative firms generate EUR 1.3 trillion in value added in Europe

European innovative firms are key contributor to EU GDP. They generate value added worth around EUR 1.3 trillion, which represents 7% of EU GDP. The innovation ecosystems in which they operate and the positive spillovers they create are essential for knowledge creation and diffusion within the EU and beyond. Their innovative solutions boost the EU’s competitiveness and strengthen the EU’s sovereignty in strategic technologies.

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