INNOVATION AS A KEY FACTOR IN THE INTERNATIONAL COMPETITIVENESS OF THE EUROPEAN UNION

J. Priede, E. T. Pereira

Abstract


There is international scientific consensus that economic progress will be driven by innovation, namely the invention and application of new technologies. Research and Development (R&D) is one category of spending that develops and drives these new technologies. From the perspective of competiveness, private sector firms are prone to focus their R&D on “applied” projects and many government-sponsored technological advances have been instrumental in driving economic growth and rising living standards. According to the published literature, it is expected that countries engaging in R&D activities have a comparative advantage in export of products, and countries with the “largest” R&D expenditure are in the forefront of the technology boundary when they invent new products or new production processes by gaining competitive advantages as compared to other countries producing competing goods. It has been apparent for at least a century that future economic progress will be driven by the invention and application of new technologies. R&D is one category of spending that develops and drives these new technologies. However, private sector firms are prone to focus their R&D on “applied” projects, where the payoff to their bottom line is likely to accrue only to them. Their role is not to undertake broad R&D for the general benefit of our nation. According to the literature, it is expected that countries engaging in R&D activities have a more comparative advantage in exporting their products. Furthermore, countries having “large” R&D expenditure may move to the forefront of the technology boundary when they invent new products or new production processes. They may then gain competitive advantages compared to other countries producing competing goods. It is, therefore, expected that the export performance of a country is positively related to its R&D behavior.

DOI: http://dx.doi.org/10.5755/j01.eis.0.7.4228


Keywords


R&D; patents; innovation; competitiveness; European Union

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Print ISSN: 1822-8402
Online ISSN: 2335-8831