The relationship between national innovative capability and performance in Europea

Abstract

Purpose: The aim of this study is to empirically investigate the relationships between capacity and performance indicators of National Innovation Systems in European countries over the period from 2000 to 2014. Methodology: As an analytical tool in order to examine the dynamics of innovation process at macro level, we used National innovation System approach which has had a large scope in innovation literature over the last decades. In this analytical framework, we employed Canonical Correlation Method to empirically examine the relationships between two variable set of capacity and performance components. National innovation capacity is represented by the dimensions of Research and Development activities, Human Capital and Information and Communication Technology (ICT) infrastructure. Dimensions of invention and innovation are chosen the proxies for performance components of NIS. Thus, this study applies an empirical method to get different capability dimensions of system together in order to determine their effectiveness on innovation performance. Findings : Results of the empirical study reveal that the most significant contribution to innovation performance comes from Human Capital while dimensions of ICT infrastructure and Research and Development take second and third place, respectively. In addition, it seems that educational attainment and ICT-using levels are better indicators for determining the impacts of Human Capital and ICT infrastructure on innovation performance rather than the levels of education spending and ICT investment. Conclusion: As generally argued, increasing of R&D intensity at country level is not only sufficient condition for improving innovation system in Europe. Accordingly, innovation policies like European Union focusing on an R&D–to-GDP ratio 3% is not enough without providing the requirements for an appropriate human capital development in national innovation system.