The innovation divide across EU regions: does EU funding shape distinct innovation transition paths?

Innovation is widely recognized as a key driver of long-term economic growth, and its convergence is considered essential for broader cohesion within the European Union (EU). Yet, despite substantial research and innovation (R&I) funding, innovation levels across the EU remain unevenly distributed. This paper examines innovation convergence and the role of EU R&I funding in shaping these dynamics. Using Phillips and Sul’s club convergence methodology on innovation output data (patents per capita) from 2000 to 2022, no evidence of absolute convergence among EU regions emerges. Instead, two distinct innovation clubs persist, with disparities showing no signs of diminishing. Similar club structures are evident in EU R&I funding, specifically within the EU Framework Programmes (FPs) and the European Cohesion Policy (ECP). The results of bivariate probit models further indicate that membership in leading EU FP clubs is associated with a higher probability of innovation leadership, while membership in leading ECP clubs corresponds to a lower probability. These findings suggest that current EU R&I instruments align with, rather than offset, the persistence of the innovation divide, highlighting the need for more inclusive capacity-building approaches and stronger institutional environments.