The Role of Innovation in Fostering Competitiveness and Economic Growth: Evidence from Developing Economies

Lejla Terzić

doi:10.1515/cer-2017-0028

Authors

Lejla Terzić Faculty of Economics Brčko, University of East Sarajevo, Bosnia and Herzegovina

DOI:

https://doi.org/10.1515/cer-2017-0028

Keywords:

innovation, competitiveness, economic growth, developing economies, EU–28

Abstract

This paper deals with the essential features determining the role of innovation in developing economies by examining the structure of innovation measures. The economic growth and competitiveness of developing economies are powerfully connected to its innovation status. The purpose of this paper is to examine the significance of innovation in driving economic growth per capita and competitiveness in selected developing economies. In order to determine the interconnection among the variables of innovation, competitiveness, and growth, assorted methodological measurement instruments have been applied. The data were collected from both primary and secondary sources. The results suggest the importance of specific innovation dimensions for prospective economic growth in developing economies. The identical measures responsible for fragile innovation are associated to the low composite measures of innovation accomplishment. This demonstrates the enormous disparity concentrated in every innovation aspect over time, specifically in innovation output and enterprise performances between the developing economies and the EU–28 average measures. The research results indicate the usage of appropriate economic instruments in diminishing the problems that developing economies are currently dealing with.

Downloads

Download data is not yet available.

References

Aubert J.-E. (2004), Promoting Innovation in Developing Countries: A Conceptual Framework, ʽWorking Paperʼ. Washington, DC: World Bank Institute.
Google Scholar

Barney B., Clark D. (2007), Resource‑Based Theory – Creating and Sustaining Competitive Advantage, Oxford University Press, Oxford.
Google Scholar

Borrás S., Edquist C. (2013), The choice of innovation policy instruments, ʽTechnological Forecasting and Social Changeʼ, Vol. 80., No. 8, pp. 1513–1522.
Google Scholar

Bogliacino F., Pianta M. (2011). Engines of growth. Innovation and productivity in industry groups, ‘Structural Change and Economic Dynamics’ 22, pp. 41–53.
Google Scholar

Chesbrough H. (2006), Open innovation: The new imperative for creating and profiting from technology, Harvard Business Press.
Google Scholar

Chaminade C., Edquist C. (2005), From theory to practice: the use of systems of innovation approach in innovation policy, ʽPapers in Innovation Studiesʼ, 2005/2, Lund University, CIRCLE – Center for Innovation, Research and Competences in the Learning Economy, pp. 1–47.
Google Scholar

Czarnitzki D., Toivanen O. (2013), Innovation Policy and Economic Growth, European Comission-Fellowship initiative The future EMU, European Economy, ʽEconomic Papersʼ, 482/2013, pp. 2–40.
Google Scholar

Edquist C. (2004), Systems of Innovation: Perspectives and Challenges. [in: ] Fagerberg, J., D. Mowery, and R. Nelson (eds), The Oxford Handbook of Innovation, Oxford: Oxford University Press, pp. 181–208.
Google Scholar

Edquist C. (2014a), Efficiency of Research and Innovation Systems for Economic Growth and Employment, CIRCLE WP No. 2014/08, http://www.circle.lu.se/publications (accessed: 16 March 2017).
Google Scholar

Edquist C. (2014b), Striving Towards a Holistic Innovation Policy in European Countries – But Linearity Still Prevails!, STI Policy Review, Vol. 5, No. 2, pp. 1–19.
Google Scholar

European Commission, (2010), EUROPE 2020: a Strategy for Smart, Sustainable and Inclusive Growth, Brussels, 3.3.2010. Communication from the Commission,COM (2010) 2020.
Google Scholar

Eurostat database, http://ec.europa.eu/eurostat/data/database (accessed: 16.03.2017).
Google Scholar

Fagerberg J., Mowery D., Nelson R. (2004), The Oxford Handbook of Innovation, Oxford: Oxford University Press.
Google Scholar

Fagerberg J., Godinho M. (2004), Innovation and Catching‑up, [in: ] Fagerberg J., Mowery D., Nelson R. (eds.), The Oxford Handbook of Innovation, Oxford: Oxford University Press, pp. 514–544.
Google Scholar

Foray D. (2009), Research, Innovation and Economic Growth: What does Really Matter? Paper Presented at the Conference Futurise Public Support for Innovation: Efficiency and Future Prospects, Paris.
Google Scholar

Filippetti A., Archibugi D. (2011), Innovation in times of crisis: National Systems of Innovation, structure and demand, ʽResearch Policyʼ, 40, pp. 179–192.
Google Scholar

Galbraith J.K. (1967), The New Industrial State, Houghton Mifflin Co., Boston.
Google Scholar

Goodwin M.R. (1946), Innovations and the Irregularity of Economic Cycles , The Review of Economics and Statistics, Vol. 28, No. 2, pp. 95–104.
Google Scholar

Grossman M.G., Helpman E. (1991), Innovation and Growth in the Global Economy. Massachusetts Institute of Technology, pp. 359, ISBN 0–262–57097–1.
Google Scholar

Helpman E. (2004), The Mystery of Economic Growth. Cambridge, MA: Harvard University Press. INSEADWIPO (2009), The Global Innovation Index Report 2008/2009. Fontainebleau, Ithaca, and Geneva.
Google Scholar

INSEAD WIPO (2011), The Global Innovation Index Report 2011. Fontainebleau, Ithaca, and Geneva.
Google Scholar

INSEAD WIPO (2012), The Global Innovation Index Report, 2012. Fontainebleau, Ithaca, and Geneva.
Google Scholar

INSEAD WIPO (2013), The Global Innovation Index, Report, 2013. Fontainebleau, Ithaca, and Geneva.
Google Scholar

INSEAD WIPO (2014), The Global Innovation Index Report, 2014. Fontainebleau, Ithaca, and Geneva.
Google Scholar

INSEAD WIPO (2015), The Global Innovation Index Report, 2015. Fontainebleau, Ithaca, and Geneva.
Google Scholar

INSEAD WIPO (2016), The Global Innovation Index Report, 2016. Fontainebleau, Ithaca, and Geneva.
Google Scholar

Lazonick W. (2013), The Theory of Innovative Enterprise: A Foundation of Economic Analysis in The Theory of Innovative Enterprise: Methodology, Ideology, and Institutions” [in: ] Jamee K. Moudud, Cyrus Bina, and Patrick L. Mason, (eds.), Alternative Theories of Competition: Challenges to the Orthodoxy, Routledge, pp. 127–159.
Google Scholar

Lundvall B.-Å. (2002), Innovation, Growth and Social Cohesion: The Danish Model, Cheltenham, Edward Elgar.
Google Scholar

Lundvall B.-Å. (2006)‚ Interactive learning, social capital and economic performance, Foray, D. And Kahin B. (eds.), Advancing Knowledge and the Knowledge Economy, Harvard University Press, US, pp. 63–74.
Google Scholar

Mytelka L.K. (ed.), (1999), Competition, Innovation and Competitiveness in Developing Countries. Paris: OECD.
Google Scholar

Naudé W.A. (2010a), Entrepreneurship, Developing Countries and Development Economics: New Approaches and Insights, ʽSmall Business Economics Journalʼ, 34 (1), pp. 1–12.
Google Scholar

Naudé W.A. (ed.), (2010b), Entrepreneurship and Economic Development. Basingstoke: Palgrave Macmillan.
Google Scholar

Naudé W.A. (2010c), Entrepreneurship, Global Development, and the Policy Challenges, Harvard College Economic Review, 4 (2), pp. 24–25.
Google Scholar

OECD, (2012), Innovation for development: The challenges ahead, [in: ] OECD Science, Technology and Industry Outlook, OECD Publishing.
Google Scholar

Pece M.A. (2015), Innovation and economic growth: an empirical anlysis for CEE, ‘Procedia Economics and Finance’, Vol. 26, pp. 461–467.
Google Scholar

Porter M.E. (2008). On Competition. Updated and Expanded Edition. Boston: Harvard Business School Publishing.
Google Scholar

Petrariu I .R, Bumbac R., Ciobanu R. (2013), Innovation: a path to competitiveness and economic growth. The case of CEE countries, ʽTheoretical and Applied Economicsʼ, Vol. XX, No. 5 (582), pp. 15–26.
Google Scholar

Radošević S., Yoruk (2013), Entrepreneurial propensity of innovation systems: Theory, methodology and evidence, ʽResearch Policyʼ, Vol. 42, No. 5, pp. 1015–1038. North-Holland.
Google Scholar

Reinert E. (2003), The Other Canon: The History of Renaissance Economics, [in: ] E. Reinert (ed) Evolutionary Economics and Income Inequality, Northampton: Edward Elgar Publishing.
Google Scholar

Rome, P. (1990), Endogenous Technological Change, ʽJournal of Political Economyʼ, Vol. 98, No. 5, pp. 71–102.
Google Scholar

Szirmai A., Naudé W., Goedhuys M. (2011), Entrepreneurship, innovation and economic development: An overview, [in: ] Entrepreneurship, innovation and economic development, Oxford; New York, Oxford University Press.
Google Scholar

Smit K. (2000), Innovation as a Systemic Phenomenon: Rethinking the Role of Policy, ʽEnterprise & Innovation Management Studiesʼ, Vol. 1, No. 1, Routledge, pp. 73–102.
Google Scholar

Smith A. (1776), An Inquiry into the Nature and Causes of the Wealth of Nations. Available from: http://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/index.htm (accessed: 16 March 2017).
Google Scholar

Schumpeter A.J. (1934), The Theory of Economic Development : An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, ʽHarvard Economic Studiesʼ, Vol. 46, Harvard College, Cambridge, MA.
Google Scholar

Tidd J., Ramirez M., Denicolai S. (2016), Overcoming the false dichotomy between internal R&D and external knowledge acquisition: absorptive capacity dynamics over time. Technological Forecasting and Social Change, 104. pp. 57–65.
Google Scholar

The International Monetary Fund, World Economic Outlook (2016), https://www.imf.org/. (accessed: 16.03.2017).
Google Scholar

The World Economic Forum, The Global Competitiveness Report 2016–2017. https://www.weforum.org/ (accessed: 16.03.2017).
Google Scholar

UNU-INTECH (2005), Measuring Innovation: Making Innovation Surveys work for Developing Countries, Technology Policy Brief, 4 (1). Maastricht: UNU-MERIT.
Google Scholar

Verspagen B. (2005), Innovation and Economic Growth. [in: ] J. Fagerberg, D. C. Mowery, and R. R. Nelson (eds), The Oxford Handbook of Innovation, Oxford: Oxford University Press. Westmore B. (2013), R&D, Pateting and Growth: The Role of Public Policy, ʽOECD Economics Department Working Papersʼ, No. 1047, OECD Publishing, pp. 2–48.
Google Scholar