Does Implementation of the Smart Growth Priority Affect Per Capita Income of EU countries?—Empirical Analysis for the Period 2000–2017

Abstract

Smart growth is one of the priorities of the Europe 2020 strategy, implemented by European Union member states since 2010. Developing economy based on knowledge, human capital and innovation, ipso facto, implementing the smart growth objectives, is theoretically justified and should stimulate growth processes in EU economies. The aim of this study is to examine the existence and nature of the relationship between the state of implementation of the smart growth targets in the new and old EU countries and their GDP per capita. The analysis for the period 2000–2017 indicated a varied degree of advancement of EU countries in implementing the smart growth targets. The assessment of the overall level of the smart growth targets’ implementation, expressed in the smart growth summary index calculated in this paper, leads to the conclusion that the new EU members, having a relatively lower level of initial implementation of the smart growth objectives, showed a much higher dynamic in this field than the old EU members. The surveys conducted with the use of econometric models confirmed that effective implementation of the smart growth targets resulting in a higher employment rate and improvement of the quality of human capital had a positive impact on GDP per capita in EU countries, especially in the new member states. The results indicate that investment in R&D did not automatically affect the level of GDP per capita of the analysed economies. This impact was spread over time and limited only to the countries where R&D expenditure was higher than 1.5% of GDP.