Research and Development Efficiency in Public and Private Sectors: An Empirical Analysis of EU Countries by Using DEA Methodology

Abstract

Both the fourth industrial revolution (Industry 4.0) and its embedded technology diffusion exponentially progress and grow in terms of technical change and socioeconomic impact. The aim of this study was the evaluation of research and development efficiency in the public and private sectors in EU countries. The Data Envelopment Analysis (DEA) methodology, within which the slack-based model was applied, was used to achieve this aim. The Malmquist index (MI) was used to calculate changes in research and development efficiency during 2010/2013 and 2014/2017. The results present a decrease in total Research and Development (R&D) productivity in public and private sectors for an average of EU countries (28). However, Spain, Slovenia, and Portugal (in the public sector), and Ireland and Romania (in the private sector) revealed an increase of a total R&D productivity during 2010/2013 and 2014/2017 that was primarily influenced by an increase of technical efficiency (catch-up effect). Similarly, the results confirm the differences in R&D efficiency in private and public sectors in the European countries. The study’s results also provide a valuable platform for creators of national strategic and innovative investment and educational plans, and creators of relevant policies and create a platform for national and international benchmarking indicators.

The role of foreign technologies and R&D in innovation processes within catching-up CEE countries

“…The importance of knowledge is emphasized, especially in endogenous growth theories [3][4][5]. In this context, there is a wide discussion about the transition towards a knowledge economy [6,7] or the fourth industrial revolution [8]. The process of firm innovation is often referred to as the innovation black-box [9,10] or the hidden innovation process.…”

The Role of Research and Development (R&D) on Gross Domestic Products (GDP) (Case Study USA, China, Japan, Germany and the UK)

“…This description is supported by research by Lichtenberg (in Gumus & Celikay, 2015) that private R&D expenditures have a positive and significant effect on economic growth and are proven to be more effective and efficient than public R&D expenditures. It is also supported by research (Halaskova, Gavurova, & Kocisova, 2020) that of the 28 European countries studied, the majority showed results that R&D spending by the private sector was more effective and efficient than the public. This economic phenomenon certainly supports the findings in this study, especially the relationship between GERD and PE.…”

A new perspective for European SMEs’ innovative support analysis: Does non-financial support matter?

“…Collaboration-induced policies should be implemented along with the necessary support systems, such as science parks, SMEs' incubators, and cluster initiatives with firm coordination and supervision to strengthen SMEs’ innovation performance. Member states should focus on the country-specific conditions necessary to improve the innovative ecosystem through the specific support for lagging conditions, as proposed by Prokop et al [ 61 , 62 ], Stejskal et al [ 63 ] or Halaskova et al [ [64] , [65] , [66] ].…”