Challenges for European Innovation Policy

Challenges for European Innovation Policy

Cohesion and Excellence from a Schumpeterian Perspective

Edited by Slavo Radosevic and Anna Kaderabkova

This book uniquely applies the Schumpeterian innovation policy perspective to the countries of Central and Eastern Europe. A broadly defined framework of the science, technology, innovation and growth system underpins the empirical and conceptual analysis of the critical issues including demand, FDI, finance and education.

Chapter 6: Attracting and Embedding R & D in Multinational Firms: Policy Options for EU New Member States

Rajneesh Narula

Subjects: economics and finance, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


6. Attracting and embedding R&D in multinational firms: policy options for EU new member states Rajneesh Narula 6.1 INTRODUCTION European Union (EU) integration and expansion is a complex, cooperative, socioeconomic undertaking. At the most basic level, it requires the political, economic and sociological milieux of new member states (NMS) to converge with those of the core member state countries. Each new wave of EU members results in another multiple group of countries, at a different stage of development, with different levels of gross domestic product (GDP), resource endowments, comparative advantages and industry and economic structures. This diversity also results in different growth trajectories. It is increasingly obvious that continual EU expansion means that a common set of industrial and technology policies to promote growth, applicable across all member states, or even a single set of targets, is not feasible. In this chapter, we view the EU as consisting of groups of countries that have some common features, which can be the basis for some common policy recommendations. We group the NMS into two sub-groups, which reflect the extent of their convergence and development of a market economy. The first group includes the Czech Republic, Slovakia, Hungary, Slovenia, Estonia and Poland, which we refer to as the advanced NMS. The second group includes Bulgaria, Romania, Latvia and Lithuania, which are still in a stage of transition. In this chapter we refer to them collectively as the new NMS.1 The chapter focuses on the promotion of innovation activities by multinational enterprises...

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