Abstract
The aim of our paper is to provide a comprehensive picture of the role of innovation within the entrepreneurial ecosystem in certain countries. In this way, we propose the following research question as to what kind of interrelatedness can be observed between the innovation capability of a country and other elements of its entrepreneurial ecosystem. Ninety-five countries have been involved in our analysis, which initially have been grouped by their level of economic development and a group of transition countries has been created as well. In order to measure these relations, the Global Entrepreneurship Index (GEI) was applied. This index measures the qualitative aspects of the entrepreneurial ecosystem in a national context. The index consists of fourteen pillars covering the relevant aspects of the entrepreneurial ecosystem. Out of the pillars, there are three pillars associated with three different aspects of innovation: Technology Absorption, Product Innovation, and Process Innovation. After analyzing the pillars, we conducted a k-means cluster analysis in order to demonstrate whether countries with the same level of development are ranked in a common group if they are clustered by the values of the three innovation pillars. Our results suggest that the quality of the entrepreneurial ecosystem reflects the level of economic development. Regarding the role of innovation, it seems that the innovation-related pillars have an important role within the entrepreneurial ecosystem. Technology Absorption is highly related to the GEI score and the level of economic development since the most developed countries have the highest values for this pillar. While the Product and Process Innovation pillars have a relatively strong relationship with GEI score as well, it seems that a couple of countries have higher pillar values in these innovation-related pillars than the position of their GEI scores would lead one to expect. This may indicate that these countries have relatively good performance in research and development, but other components of their entrepreneurial ecosystem may hamper the exploitation of the results achieved by new firms.
Highlights
There is a general consensus that knowledge is the most fundamental source of the modern economy [Jaffe, Trajtenberg, 2002] and that innovation has become a “ubiquitous phenomenon” [Lundvall, 1992]
The results suggest that all coefficients are relatively high and indicate the relationship between the pillars of the entrepreneurial ecosystem
In order to obtain a deeper understanding of the role of innovation within the entrepreneurial ecosystem, the aforementioned four groups of the countries were compared to each other by the scores of innovation Global Entrepreneurship Index (GEI) pillars3
Summary
There is a general consensus that knowledge is the most fundamental source of the modern economy [Jaffe, Trajtenberg, 2002] and that innovation has become a “ubiquitous phenomenon” [Lundvall, 1992]. It follows from the above that the literature dealing with innovation and technological change has become enormous This literature, on the one hand, primarily tries to answer the following fundamental question: what role does innovation play in economic growth? The New Economics of Innovation (initiated by [Nelson, 1993; Lundvall, 1988, 1992; Freeman, 1982, 1995]) tries to give an answer to this question by focusing on the institutional arrangements in which the innovative processes take place. Innovation economics has been influenced by different theories of innovation such as interactive learning theories [Lundvall, 1992] and evolutionary theories, most importantly the New Institutional Economics (NIE, initiated by [Coase, 1992, 1998; North, 1989, 1990, 1991; Williamson, 1985, 2000]). The concept of the Regional Innovation System (RIS) broke away relatively quickly [Cooke, 2001]
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