Innovation performances in the European Union and Hungary

Due to variety and complexity of economic activities the planning of different innovation solutions, following of changes is possible only by having the appropriate information – inputs, performances, efficiency indexes.

Measurement of innovation activity has a short past in statistic. The European Union regulated it with two decrees of 2004 and prescribed obligatory for members that what kind of method – with determined frequency – have to be applied for surveying innovation performances.

Appraisal system called European Innovation Scoreboard was created, which qualifies the strengths and weaknesses of European economy according to 17 indexes; 26 innovation performance conditions are considered in five groups, indexes expressing the efficiency of innovation, moreover it compares the members’

‖ actual level‖ to the economic performance of USA and Japan.

The complex innovation index appraises the environmental conditions of acting innovation (higher education, life-long learning institution, situation and utilization wide scale, regulation conditions) for each country, moreover it examines the knowledge performances (R&D inputs in proportion of GDP, operation of knowledge centres, share of high-tech sector), analyses the operation of business sector ready to innovation (updating act profile, professional and financial management of innovative projects, development of ITC sector), and in the end it qualifies in a complex way the extent that innovative aspect and behaviour contribute to the optimization of economic performances.

The innovation index provides a relatively reliable picture about the innovation performance of a certain country for a given time, moreover about strengths and weaknesses of the examined country. The components of innovation efficiency index indicate that the innovation pursuits could be judged realistically by the interaction of the examined component and as a result of a longer process (See: rate of persons having higher educational degree, cooperation of enterprises and universities, changing of export structure). There is growing attention on investment of innovation performances in the view of temporal change against static approach. Examined indexes are similar to the previous, but the analysis focuses on temporal change (through three or more years) of indexes (direction, rate, structure). Linking the static and dynamic indexes, a new appraisal system opportunity can be created. Examined countries can be classified into four groups according to the innovation performances and the dynamic of the temporal change:

Finland, Sweden, Denmark, Germany and England can be listed in the group of leading ones among the European countries, but among the competitors, Japan and the USA belongs to this group as well.

Austria, Belgium, Cyprus, Estonia, French, Ireland, Luxembourg, the Netherlands and Slovenia belong to the group of following countries with average performance.

Czech Republic, Greece, Hungary, Italy, Lithuania, Malta, Poland, Slovakia and Spain belongs to the third group, which have chance to catch up – having an innovation index below average, but with a relatively fast changing rate.

Bulgaria, Latvia, Romania are the least developed countries. These countries have innovation ability below average; they change slowly comparing to low level performances (Figure 7.) (Pitti 2009).

Hungary provides relatively better performance compared to average in indicator group of economic effects;

worst in indicator group of innovators, finance, support and utilization of intellectual property. The greatest improvement could be experienced in the case of indicators of economic effects and intellectual property, particularly the EU trade marks (11,7%), the EU-design (9,7%), the export of knowledge intensive supplies (12,1%), sales of new products in market (17,0%) has increased. The value of index has decreased in finance and support of innovation and innovators indicator groups.

Figure 7. The European Innovative Index.

The ordinance of countries according to aggregated innovation index Source: EIS, 2009)

Certain elements of Hungarian innovation system are undeveloped and/or inefficient in the international comparison, and moreover the quality of intensity of connection and cooperation is not adequate. It is necessary to provide new frame conditions resulting national economic ―driving force‖, and to statue basic principles.

The scientific, technology and innovation policy is treated in all of the most developed country of the world as an integrant part of economic policy. Consequently it gets high level representation in government and significant weight in the budget. These countries all without exception have increase the R&D inputs and innovation efforts reacting to economic crisis.

The proportion of R&D&I to corporate value-added value increased continuously in OECD countries in the 1990’s, but it has stagnated in the EU countries since 2000 (about 1,8%) , while for instance in Japan it has increased to 3,7% in 2007 and it reached 3,1% in the USA. This value is 1,15% according to data of KSH (2009) in Hungary, which is hardly more than half of the average of the EU27 (Figure 8.).

Figure 8. Rate of corporate R&D inputs comparing to corporate value-added

Source: Új Széchenyi terv, 2011)

Researchers have key-role in national innovation system. Number of corporate researchers has increased faster since 1980’s than the number of industrial employees. 4 million researcher were employed in the middle of the decade in OECD countries, also there are 7,4 researchers from 1 000 employee (while it was only 6,2 in 1997).

There are more than 10 researchers from 1 000 employee in Finland, Sweden, Japan, USA. This rate was 5,3 in Hungary in 2009. While 40 % of researchers in the USA and two-thirds of researchers in Japan worked in the corporate sector, this proportion is only 50 % in the EU and 40 % in Hungary.

Innovation does not play such a role in the everyday activities of the majority of enterprises like in the majority of EU members. Every fifth enterprise is innovative among enterprises employing at least 10 persons, although their proportion exceeds the one third everywhere in the old members of EU (Figure 9.).

Researchers having PhD are the key actors of research works. The most PhD is obtained in technical and scientific fields in the OECD countries. Hungary does not reach the level of countries that are considering the technical development important (Figure 10.) (Új Széchenyi Terv, 2011).

Figure 9. Rate of innovative enterprises Source: Új Széchenyi Terv, 2011)

Figure 10. Rate of scientific and technical PhD in percentage of all PhD Source: Új Széchenyi Terv, 2011)