Abstract
The literature review reveals diverging views on the influence of economic cycles on the innovation activity of companies. This article is a voice in this discussion. It provides, empirically verified arguments, allowing one to support or reject the accepted research hypotheses. These assume that: (1) The expectations with respect to income dynamics play a more important role in stimulating innovation activity than the dynamics of (actual) income levels; and (2) Different economic structures and levels of technological development in the chosen Balkan states, despite the geographic proximity of these states and similarity in economic situation, influence the geographic differentiation in terms of the innovation activity. The obtained research results show a greater differentiation in terms of actions of companies than previously thought. It has been confirmed that when the companies sense an improvement in economic situation, their innovation activity increases, this is, however, accompanied by a noticeable anticipatory element. It turned out that the expectations regarding an improvement in economic conditions have an additional stimulating effect on such an activity, whereas the recession itself, as well as the expectations in that respect, have a de-stimulating effect. It turned out that the expectations with regard to the future economic situation are the most important here, a factor that has been neglected so far.
Highlights
Economic situation is an important factor that often influences a decision on whether an innovative activity should be undertaken by a company, both in developed and developing countries
The research results were as follows: (1) levels of innovativeness among small- and medium-sized enterprises (SMEs) decreases during economic crisis; (2) the types of innovations implemented in Spanish SMEs change depending on economic situation; and (3) innovativeness positively influences the outcome of company’s activity both during recovery and recession
When analysing the specific odds ratios describing the expectations related to the increase in income levels in the near future, the odds of innovative activity being financed by an entity are from 50% to almost 150% lower than the odds of innovative activity being financed in entities where in the previous three years there has been an increase in income levels
Summary
Economic situation is an important factor that often influences a decision on whether an innovative activity should be undertaken by a company, both in developed and developing countries This has been painfully experienced by a majority of European companies after the 2008 financial crisis. We observe a consistent, yet prolonged, process of coming out of the economic crisis as indicated by the levels of various economic measures observed in the EU member states. This does not mean, that the economic slow-down we are experiencing will end quickly. It should be said that the impact of innovation on economy seems undisputed, the problem of how exactly innovations influence economic situation (and vice versa) still lacks a more detailed study (Filippetti & Archibugi, 2011; Sharif, 2012)
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