Despite its carefully cultivated reputation of being a digital wonderland, the Estonian economy, specifically the private sector, has lagged behind European averages for years where it comes to innovation, and also investment in research and development.

Now, for the first time, the European Commission sees the country as part of Europe's strong innovators. Its 2019 European Innovation Scoreboard as well as the Regional Innovation Scoreboard published on Monday show that the EU's performance in the area has improved for four years in a row, outperforming the results of the United States for the first time.

However, the EU has also continued to lose ground to Japan and South Korea, and China is catching up quickly as well, the Commission said in a press release.

Based on their scores, the EU countries fall into four performance groups: innovation leaders, strong innovators, moderate innovators, and modest innovators. Sweden is the 2019 EU innovation leader, followed by Finland, Denmark, and the Netherlands.

The United Kingdom and Luxembourg have dropped out of the top ranks and lost their status of innovation leaders, now being part of the strong innovators group. Estonia is in the strong innovators group for the first time.

Innovation as well as investment in both education and research and development have been a focus of the EU for several years now, along with raising awareness that in order to remain competitive, the European economy will have to keep up with several very different and far more centrally run systems, such as China.

Improving investment across all EU members has remained a formidable challenge, most recently exemplified at Estonia's issues with its 1-percent GDP aim for R&D spending, recently thrown out of the government's budget strategy.

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