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HomeInnovationInnovation-driven productivity growth in CEE is too small

Innovation-driven productivity growth in CEE is too small

Research and innovation play a key role in building an inclusive, sustainable, competitive and resilient Europe. Bold transformative policies are needed to ensure the success of Europe’s digital and green agenda, strengthen resilience and preparedness and support Europe’s competitive edge in the global race for knowledge and tech sovereignty.

In particular, the success of the EU’s ambition to reach the net-zero emission objective by 2050 crucially hinges on the development and widespread use of new technologies.

“The digital and green transitions simply cannot be accomplished without strong research and innovation systems,” said Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth.

Overall, according to the 2022 edition of the Science, Research and Innovation Performance (SRIP) report, which analyses the EU’s innovation performance in a global context, the EU remains a strong player in terms of scientific production and technological output. While representing just 6 per cent of the world’s population, it accounts for about 18 per cent of the global R&D investments and 21 per cent of the worldwide top-cited scientific publications. In terms of technological output, the EU is leading globally in the climate field, with 23 per cent of total patent applications.

Science, Research and Innovation Performance of the EU 2022.
Source: DG Research and Innovation – Common R&I Strategy and Foresight Service – Chief Economist Unit based on Eurostat.

However, R&D expenditure, scientific publications and patent applications are only concentrated in more-developed regions, with western and northern Europe featuring the highest R&D intensity. An example is Baden-Württemberg, which has about 2 per cent of the EU population but boasts 9 per cent of the EU’s business R&D.

On the other hand, the least-innovative regions recorded low and declining growth in patent applications over 2013-2018, putting into question technology production convergence across EU regions. While most regions in central and eastern Europe (CEE) experienced significant catching up in productivity, much of the growth has been fuelled by a combination of factors such as the rapid expansion of global supply chains and foreign direct investment. There has been a smaller role for innovation-driven productivity growth.

On a positive note, over the past decade, there were some less-developed regions that have shown a higher annual growth in terms of business R&D intensity, in particular in Poland, Bulgaria and Greece, than in transition and more-developed regions.

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