How Regions Innovate Matters: Innovation Profiles, Persistence and Prosperity in European Regions

The Regional Innovation Scoreboard ranks European regions by a composite index but reveals little about how innovation performance is composed, how persistent it is, and whether it translates into prosperity. Using data for 245 regions in 31 countries over 2016–2023, this study addresses three research questions with panel econometrics, cluster analysis, and machine learning. First, dynamic panel estimates that treat the indicators as endogenous indicate substantial persistence in performance and show that its most robust correlates are non-R&D investment and innovation and collaboration among small- and medium-sized enterprises. Second, clustering the components of the index, rather than the index itself, identifies ten innovation profiles that are weakly aligned with the official performance groups and correspond to distinct development models, from science-intensive metropolitan cores to fast-growing catching-up regions. Third, with GDP per capita as an external outcome and region-grouped validation, the indicators account for about two-thirds of cross-regional differences in prosperity, and their composition provides additional predictive information beyond the composite index, although they carry little information on short-run growth. Read together, the results show that stable rankings conceal changing configurations, that convergence has relied largely on factors other than innovation, and that policies should address region-specific bottlenecks.