Innovation policy in seven candidate countries : the challenges : Bulgaria, Latvia, Lithuania, Malta, Romania, Slovakia and Turkey : final report vol 1

Abstract

Starting from the 1995 Green Paper on Innovation, the EU has increasingly placed innovation at the heart of its’ economic policy objectives. This process culminated in the strategic goal set by the Lisbon European Council in March 2000, that the European Union (EU) should become the most competitive and dynamic knowledge-based economy in the world, capable of sustaining economic growth with more and better jobs and greater social cohesion by the year 2010. In the candidate countries, during this period of intense policy action in favour of innovation, the attention of Governments and stakeholders was focused on building the necessary legislative, regulatory and institutional environment for a functioning market economy. Allied to regulatory reform, a significant effort has been undertaken to change corporate ownership structures, promote the creation of private enterprises and improve the functioning of industry and services with a view to meeting the competitive pressure of the Single European Market. Much of the growth achieved has been due to improved cost-efficiency by existing enterprises and through new activities introduced by foreign direct investors rather than by the creation of new local sources of entrepreneurial value and innovation. To sustain growth, however, Governments in the candidate countries now face the challenge of designing and adopting new more complex policy solutions. For most of the candidate countries, the issue is no longer about meeting the conditions for entry to the EU, but about identifying and mobilising factors enabling them to continuously improve the level of competitiveness of their economies. Innovation is a core element of knowledge-based economies and a major source of competitiveness. As highlighted in a recent report, innovation is diverse and pervasive. It is not just based on research or science and technology, or even on enterprise and ingenuity (entre- preneurial skill and knowledge). It also involves managerial and marketing skills, organisational, social, economic and administrative knowledge. The need to take account of the “diverse routes to innovation” has been explicitly recognised in the March 2003 Commission Communication “Innovation Policy: updating the Union’s approach in the context of the Lisbon Strategy”. Accordingly, it is in this context that the study set out to “examine and analyse the current framework conditions for selected innovation issues” in the CC7. This report is the second of two studies examining the level of development of and the key challenges for innovation policy in the countries currently in the process of accession to the European Union. The first study was carried out during the period June 2000 to September 2001 and covered the so-called Luxembourg Group (Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia, or CC6)3. This second study was completed during the 15-month period from October 2001 and concerns the so-called Helsinki group (Bulgaria, Latvia, Lithuania, Malta, Romania, the Slovak Republic and Turkey, or CC7). The analysis was carried out in parallel with the conclusion of the accession negotiations with 10 of the 13 candidate countries4. In order to fulfil its remit, the study team carried out an exhaustive analysis of information and data on innovation performance and the policy framework for innovation in each of the candidate countries. This analysis takes into account the opinions and views of over 300 key stakeholders in the CC7 (public authorities, innovation support organisations and the business community) collected at national level through interviews, an innovation policy workshop and an opinion survey. This executive summary is structured around six main challenges arising from the main findings of the study, illustrated by examples of policy development from the seven countries, and proposing a number of corresponding policy options.