Cohesion and Excellence from a Schumpeterian Perspective
Edited by Slavo Radosevic and Anna Kaderabkova
Chapter 7: Innovation in EU CEE: The Role of Demand-based Policy
Jakob Edler* 7.1 INTRODUCTION The 2007 Innovation Report for Bulgaria, which is based on a survey of highly innovative Bulgarian companies, draws conclusions about how demand is a major bottleneck: Together with their strong commitment to innovation, the companies from this study mention a list of problems which explain why the number of innovative enterprises in Bulgaria is so low. In general, there is limited local demand for innovation products. Bulgarians do not easily accept new technologies and even those companies that recognize the need for innovation and modernisation of production and would like to invest in R&D have problems realizing their goals. (Ministry of Economy and Energy, 2007: 94) This is followed a couple of lines later with a request for supply-side measures, but not support for marketing: ‘In summary, the main barriers before innovative companies are the insufficient human resources, the lack of financial mechanisms for high-risk projects, the lack of resources for active marketing and tax incentives as well as the need to create a favourable environment for start-up companies’ (Ministry of Economy and Energy, 2007: 94–95). These quotes are illustrative of the poor demand for innovation in many parts of the European Union (EU) Central and East European (CEE) economies, and show that although there is some recognition of a bottleneck, the solution is most often sought in supply-side measures. The economies and the innovation systems of the CEE countries are still in a state of transition and catch-up. In the transformation of their...
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