The Efficiency and Productivity Evaluation of National Innovation Systems in Europe

Abstract

Purpose: An efficient innovation system currently plays a crucial role in creating competitive prevalence, contributing to the economic growth of individual states. The innovation system is influenced by many socioeconomic factors, including in international rankings of innovativeness of economies. These classifications have some limitations. Primarily, they do not examine the efficiency, which means they do not analyze the relationship between the involved inputs and the relevant outputs generated in the innovation system. The study aims to measure the efficiency and productivity of the European state's innovation system based on the data from the international ranking of economies' innovation. Design/Methodology/Approach: In this study, the changes in the efficiency and productivity of the innovation system coming from European states were measured using the DEA and Malmquist index methods, based on data from the European Innovation Scoreboard international ranking innovation in economies. The maximizing of economic benefits was assumed in its impact on employment and sales in a given state. The non-radial SBM model, Super SBM, and Malmquist index based on SBM were used for the research. 27 European states were subjected to the analysis in the period from 2012 to 2019. Findings: The research results indicate that the average level of efficiency in the surveyed period fluctuated around 70%. Higher results of efficiency were achieved more frequently by states that joined the EU after 2004. The increase in the productivity of individual states was caused most frequently by an increase in their efficiency (catch-up effect) and less frequently by shifting the efficiency frontier (frontier effect). Practical Implications: The following research hypothesis was decided to be laid down: developing states and those newly admitted to the European Union after 2004 have been gaining relatively more economic benefits from smaller national innovation systems (NIS) resources than developed states and the so-called states of the "old Union." Originality/Value: The added value of the article is, first of all, a comprehensive measurement of the efficiency and productivity of European states NIS in three aspects-efficiency status, efficiency ranking, and productivity changes assessment.