Sources of information for smes innovation performance in selected CEE countries

Abstract

The recent boom in the economies of some Central and Eastern European countries is attributable to success in the utilization of innovation. Innovation affects all spheres of human life in the globalized economy. Some Central and Eastern European countries are globally competitive; attracting more foreign direct investment and support from the European Union structural funds for innovation. The economic advancement in some of these countries is attributable to the pursuit of innovation policies geared towards the modification of the then planned economy into an open and knowledge-based one. Small and Medium-size enterprises have played a significant role in this regard. The innovation performance of these small and medium size firms has been dependent on mostly their internal innovative activities and through collaborative networks of the various economic actors in their business environment. Many researches and literature have found striking differences in the innovation performance of Western and Eastern European countries in the European Union. However, over the years, the Eastern European countries are catching up. The knowledge-based open economy has contributed significantly to improve innovation performance of some Central and Eastern European countries. Therefore, the sources of information and knowledge for the current innovation performance of the selected Central and Eastern European countries has triggered interest of researches. This paper examines the various sources of knowledge and information and the extent to which these different sources contribute to innovation performance of SMEs in some selected Central and Eastern European Countries. The influence of different knowledge and information sources and their relationships with SMEs innovation performance in the selected Central and Eastern European countries are empirically assessed using structural equation model. The data for the empirical analysis was sourced from the anonymized European Union Community Innovation Survey 2010-2012 on SMEs engaged in manufacturing activities. The results show that internal sources of information and knowledge from internal innovative activities influence highly the innovation performance of SMEs in these CEE countries.