Knowledge economy readiness, innovativeness and competitiveness of the Western Balkan countries

Abstract

The Western Balkan countries have set themselves the goal to join the European Union as soon as possible. Accordingly, they must adjust the key components of their development policies to the Europe 2020 strategy, focusing on key priorities such as smart, sustainable and inclusive growth. This paper explores the relationship among knowledge economy readiness, innovativeness, and competitiveness of six Western Balkan countries (Albania, Bosnia and Herzegovina, Macedonia, Serbia, Croatia, and Montenegro) and the group of six selected neighboring EU countries (Austria, Bulgaria, Greece, Hungary, Romania, and Slovenia). The paper relies on the data obtained from the Knowledge Economy Index of the World Bank Institute, INSEAD's Global Innovation Index and the Global Competitiveness Index of the World Economic Forum for 2013. Obtained data from all three sources indicated significantly lower readiness for the development of economy based on knowledge, innovation and competitiveness in the Western Balkans countries in comparison to the selected EU countries. The analysis of the interdependence of the aforementioned variables points to: a) statistically significant correlation between the indicator knowledge economy index and the global innovation index for both groups of countries; b) statistically significant linear correlation between innovativeness and innovation efficiency ratio for the Western Balkan countries. Conversely, no respective correlation has been registered for the group of selected EU countries; c) no statistically significant correlation between the global innovation index and the global competitiveness index in the Western Balkan countries, while in respect of the group of selected EU countries, the existence of significant linear correlation between these variables has been revealed.