In this paper it is aimed to investigate innovation strategies in EU countries and their contributions to economic growth. Specifically, this study aims to emphasize the mutual interaction between innovation and economic growth and the role of SMEs' innovation in economic growth particularly in developing countries. In the context of the results of this study, it is expected to see the gap between innovation leaders and catching up countries in EU that is classified by EU Commission through innovation performance and economic growth. Furthermore, this paper includes discussions about how this gap could be closed. Likely, these discussions would also be beneficial for catching up countries to realize the importance of innovation for their growth and in which way they can innovate.