Different Approaches to Managing Innovation Activities: An Analysis of Strong, Moderate, and Modest Innovators

Abstract

In the present day, innovation has become a key element of competitive advantage. However, most countries are failing in their innovative activities, and their innovative performance is below that of the EU average. Therefore, the European Commission annually publishes its Innovation Union Scoreboard, which provides a comparative assessment of the EU member states’ research and innovation performance. The countries are divided into four groups according to their innovation performance: innovation leaders, strong innovators, moderate innovators, and modest innovators. In this paper, we have selected countries whose innovation performance was close to, below, or well below that of the EU average in 2015, and we have performed microeconomic analysis of the situation in these countries’ firms to analyze the conditions of their innovation environment and uncover barriers to their innovation activities. We analyzed firms in the manufacturing industries in Slovenia (a strong innovator), Croatia (a moderate innovator), and Romania (a modest innovator) by using original multiple regression models and data from the 2010–2012 Community Innovation Survey. The results demonstrate the different backgrounds for innovation in each country. In Romania, there is a lack of both a satisfactory environment for innovation and sufficient capacity for absorbing public funds; investment into innovation-related activities is also absent. In Croatia, the innovation potential has not been fully exploited. However, we show that the appropriate targeting of innovation determinants (e.g., collaboration with different partners or public financing) could lead to the creation of synergies and spillover effects that would be able to support their innovative activities and strengthen the country’s competitiveness. There is a completely different situation in Slovenia. Firms there effectively utilize the various determinants of innovation activities, and these determinants have strong influence when utilized on their own. On the other hand, results also show that certain significant combinations of determinants of innovation activities are missing in Slovenia. In conclusion, we have proposed practical implications for policy makers that would be able to support innovative activities and help each country to improve its innovation ranking.DOI: http://dx.doi.org/10.5755/j01.ee.28.1.16111

The Role of Open Innovation, and the Performance of European Union Regions

“…Companies may successfully target public financing and have a market orientation. Thus, they can significantly influence their turnover with innovations [48]. According to Ponsiglione et al [62], even regions with identical industrial characteristics may present different results in terms of competitive performance and innovation, which can be more pronounced in less innovative regions (Moderate and Modest).…”

“…The Regional Innovation Scoreboard (RIS) is the best and most adaptable index to the context under analysis. It is published by the Directorate-General for the Internal Market, Industry, Entrepreneurship and SMEs of the European Commission and, together with its application to the national level, the European Innovation Scoreboard (EIS), provides a macroeconomic analysis of regional innovative performances, highlighting the sectors where regions need to focus their efforts, intending to improve their performance [19,48]. The RIS is published every two years as an extension of the EIS.…”

“…Moreover, this author considers that such regions are not good at commercializing their R&D results. Nonetheless, Prokop and Stejskal [48] affirm that strong regions have a well-founded business fabric that can adequately absorb innovation. These regions thus have a high capacity for innovation with fast-growing industries and an internationally competitive industry [60].…”

“…However, in countries such as Croatia, a clear background for innovation is still missing. Croatia faces obstacles in elements of its environment, for example, the scarcity of infrastructures [48]. Nevertheless, in Croatia, companies in the manufacturing industry can choose appropriate cooperation partners, such as public research institutes and universities.…”

The Impact of Interplay between Formal and Informal Institutions on Innovation Performance: Evidence from CEECs

“…Researchers have until now focused on: i) the regional innovation process (Rodriguez, 2014); ii) the innovation capacity of small and medium-sized enterprises (SMEs) (Dukic et al, 2015) or industrial structure in innovation capacity (Zdrazil et al, 2016); iii) the innovation ecosystem (Jucevicius et al, 2016); iv) open innovation policies (Sekliuckiene et al, 2016); v) the innovation environment and innovation activities of strong, moderate or modest innovators among CEECs (Prokop & Stejskal, 2017); vi) innovative SMEs (Belas et al, 2017); vii) pro-innovation factors (Kraftova & Kraft, 2018); viii) the impact of human resources, research networks, the institutional environment, public or private expenditures on research and development (European Commission, 2019a); or ix) measuring the innovation performance of developed and developing regions (Ghazinoory et al, 2014). Others focused on confirming the impact of formal or informal institutions on innovation performance in various countries.…”