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The innovation becomes vital for increasing the competitiveness of national economies. Innovation means investment in R & D by the private sector, large research institutions and extensive collaborations between universities and industry. The aim of this paper is to study the relationship between innovation and competitiveness in European Union countries. Ensuring future economic growth will require solutions that are more creative than any we have seen so far. The European economies faced a long period of low growth and it is the time to re-build more competitive economic environment for a new period of growth. For this it is necessary to analyze the evolution from the last 10 years' period in order to be able to design new growth strategies. In the same time, there are new challenges especially regarding the resource consumption, environmental issues and social problems. A more competitive economy is the place where economic, environmental and social factors are harmonized to create growth and well-being for the population. The research methodology is based on a correlation analysis of the data collected from the World Economic Forum's Global Competitiveness Report between 2008-2017. The results show results show that almost 10 years after the financial crisis, economies in the European Union countries have a strong correlation in terms of innovation and competitiveness. [ABSTRACT FROM AUTHOR]