There is a momentum of thought in the USA and EU that implies that either of the two continents should come out on top in the innovation game. Perhaps this is related to the number of articles that appear in distinguished journals or the historic technological lead each has possessed in various fields...who knows...but whatever the reason, this is not good thinking:
a) Successful innovation is related to intellectual cross-pollination. As there many more people in China and India than both the EU and USA put together, it follows that those countries have the greatest potential.
b) Successful innovation is about intellectual cross-pollination. As the EU and USA are hell bent on patenting and restricting knowledge in various forms of intellectual ownership, they are inadvertently shooting themselves in the foot. China and India have not reached this stage of intellectual enforcement.
c) Successful innovation is about combining depth and breadth of knowledge. This is related to education. Presently, there is no clear winner as to who is the best educator. Though the USA's Ivy League institutions feel they have the edge, this is hubris more than reality.
d) Successful innovation results from a reduction of barriers to it. One of the most powerful impediments is lack of finance. Where finance for R & D is greatest, there lie the highest probabilities. Presently, the USA is the leader in financing ventures.