Dilemmas of the Creation of Innovation Policy in Member States

Abstract

Directions of changes occurring in the world economy in recent years show the transformation of the industrial economy into a knowledge-based economy, using the technological and innovative potential. This transformation has highlighted the competitive advantages of countries and regions specializing in the production of hightech products. A lot of research has been trying to find out what the drivers of innovation really are, though there has not formed one consensus. The aim of the paper is to investigate influence of research and development (R&D) expenditure on economic growth in EU member states and to assess whether there is a significant relationship between countries' R&D efforts and their innovation and between innovation and per capita income, as postulated by R&D based endogenous growth models. Basic source of data is Eurostat database and European Innovation Scoreboard reports. Results confirm positive and statistically significant impact of government R&D expenditure, which is the main driver for economic growth during the analysed period. Highly developed countries are conducting research to seek new sources of innovativeness and methods for creating innovative potential. The results also suggest that the EU countries that do not have effective R&D sectors seem to promote their innovation through technology spillovers from other countries.