Innovation grows the EU’s knowledge economy, it enhances our competitiveness and it creates a prosperous future for all Member States. This is why innovation features prominently in the ten priorities of the Juncker Commission. The European Innovation Scoreboard 2016 gives an assessment of the EU and Member States' innovation performance, as well as that of key international competitors. Its 25 indicators give a detailed analysis of the strengths and weaknesses of Member States on the basis of important innovation drivers − from research systems and public and private investment, to the... economic effects of innovation. Also, for the first time, we include a chapter on expected short-term changes in EU innovation performance to help anticipate future trends. This edition of the Scoreboard reveals several interesting developments. The EU has a lead in innovation performance over many other countries, while China is making swift progress. In addition, the EU is catching up with Japan and the United States, but is still losing ground to South Korea. The report shows positive trends in human resources, and the attractiveness, openness and quality of research systems, but negative trends both in research investment and in the framework conditions for business engagement in venture capital and SME innovation. While performance varies considerably, many Member States are top innovators worldwide. Reforms are crucial to maintaining and improving the performance of national research and innovation systems. The EU supports Member States in achieving reform through the Horizon 2020 Policy Support Facility and, through initiatives such as the Investment Plan for Europe and the Single Market Agenda, the Commission is improving the business environment for SMEs and start-ups.