Challenges for European Innovation Policy
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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.
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Chapter 4: Sectoral Innovation Modes and Level of Economic Development: Implications for Innovation Policy in the New Member States

Andreas Reinstaller and Fabian Unterlass


4. Sectoral innovation modes and level of economic development: implications for innovation policy in the new member states Andreas Reinstaller and Fabian Unterlass 4.1 INTRODUCTION OECD data show that most European countries, and the European Union (EU) as an economic area, are lagging behind the US by some 30 per cent of per capita gross domestic product (GDP) and labour productivity (OECD, 2007). Composite indicators, such as the World Economic Forum’s Global Competitiveness Index or the European Innovation Scoreboard (EIS), suggest that this lower economic performance is related to institutional and structural deficits that have a negative effect on the competitiveness of European countries. It is widely accepted that Europe’s economy has lost ground to the US because of lack of competition and entrepreneurship, poor investment in higher education, insufficient credit market funding for growing enterprises and procyclical fiscal policies, all of which are detrimental to growth (Sapir et al., 2003; Bartelsman and van Ark, 2004; Aghion and Howitt, 2006; EC, 2008). As a result, the US and Japan are attracting more international research and development (R&D) investment than the EU. The US is also more successful at attracting top researchers and highly skilled staff (EC, 2005). The conditions that nurture the generation of new knowledge, innovative industries and, thus, innovation-based growth, are considered more favourable in the US and Japan than in Europe. Institutional reform and industrial restructuring for greater innovation and growth are the principal goals of the Lisbon Growth and Jobs Strategy promoted by the European...

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