PurposeProsperity and growth of emerging economies rely heavily on the innovativeness of higher education institutions (HEIs) and their ability to provide employable graduates with entrepreneurial competencies and flexibility in the assessment of their progress in gaining knowledge. The innovativeness of the higher education system is not always reflected through optimal educational content, innovative study programs, skills improvement, assessment methods, etc. The study aims to analyze and evaluate how selected internal factors, reflected in organizational support for innovativeness of HEIs, and external factors reflected in government support for innovativeness of HEIs determine the innovativeness of HEIs, as one of the key determinants of economic prosperity.Design/methodology/approachThe authors analyzed three facets of higher education innovativeness, i.e. graduates' employability, entrepreneurial competencies and new ways of assessment. The sample included 664 students from the University of Kragujevac, Serbia, and the University of Maribor, Slovenia. The authors applied structural equation modeling (SEM) to examine relations.FindingsThe results clearly show that in order to become the driver of development in emerging economies, universities must act in different directions, focusing on different organizational drivers of innovativeness, such as academic autonomy of teachers, student participation in curricula design, enhancing new ideas and compensation system, provide resources etc. Organizational support and government for innovativeness of HEIs affect students' entrepreneurial and social skills, creative thinking, leadership, interactive competencies and knowledge-skill-attitude. Assessment tasks and associated learning should be redesigned to enable students to be involved in the evaluation of their work.Originality/valueThe study strives to reduce the research gap identified in the field of researching the drivers of innovativeness in higher education and offers implications for emerging markets regarding various factors that determine the innovativeness of HEIs and consequently contribute to fostering innovation and entrepreneurship in emerging markets. Originality derives from the fact that even though the authors have explored HEIs in Serbia and Slovenia, the results are fully transferrable to other former socialist states, considering their similar socio-economic and educational background. Results of this research complement the understanding and provide new knowledge for further development of innovativeness in HE.
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