Effectiveness of knowledge economy determinants: Comparative study among Moderate Innovators

Abstract

Nowadays, innovations play an important role in the globalized competitive environment and each economic actor is pushed to find new sources of competitive advantage and to innovate own products or services. Therefore, the European Commission annually publishes own Innovation Union Scoreboard, which provides a comparative assessment of the EU member states’ research and innovation and ranks countries according to their innovation performance. Each country is divided into one of four groups according to its innovation performance: innovation leaders, strong innovators, moderate innovators, and modest innovators. However, in the knowledge economy era, countries are facing new challenges in dealing with new determinants of firms´ performance (and also the prosperity of society in regions). These determinants (of knowledge economy) affect innovation activities at local, regional, national and also supra-national level. In this study, we offer new way of how to measure the effectiveness of knowledge economy determinants application by using Data Envelopment Analysis within European countries – specifically within moderate innovators with innovation performance below the EU average. Moderate innovators realize many various types of policies – a policy mix of business RandD and innovation-focused policy coupled with support for competitive RandD. However, the application of different approaches is variously effective and also in this one “moderators” group the leaders and the catch-up countries are appearing. The causes of differences in success should be analyzed. Moreover, we compare the ranks of moderate innovators according to their innovation performance measured by the European Commission with our results and provide some practical implications on how to become more efficient in the use of knowledge economy determinants.