Trade as a measure of innovation performance: Selection and assessment of trade indicators

International trade is a key dimension in measuring the market uptake of clean energy technologies (CET) and the development of the CET sectors in a country.

This report was produced as part of a project focusing on the development of a composite indicator to track the performance of EU member states and Mission Innovation member countries in clean energy technology innovation.

The report covers the work on using trade as part of the CEII (Clean Energy Innovation Index) as a measure of innovation performance, and provides details on the following:

  • The assessment of different trade-indicators and selection of those most suitable ones for inclusion in the composite indicator
  • Insights on CET innovation performance from the perspective of trade flows
  • Details on the trade dataset for inclusion in composite indicator calculations.

Key findings

The most suitable indicator identified for inclusion in the composite indicator was the CET export value added indicator, which provides insights on what are the most specialised countries in terms of domestic value added to exports.

Based on 2018 data, Japan has had the highest domestic value-added share of exports in the following three key categories: renewables (88%), batteries (86%) and energy system security (89%), closely followed by the US in almost all dimensions.

For EU countries, the same ratio (domestic value-added share of exports) is lower, with an EU-27 average of around 60%, suggesting that the EU exports of CETs have, on average, a higher percentage of imported intermediate products or other inputs.