National systems of innovation in the Eurozone: Policy implications for Spain

This paper aims to understand which innovation inputs are more strongly related to innovation outputs in the Eurozone, and to derive policy implication for the Spanish convergence with Eurozone top players in terms of innovation. Drawing from the Global Innovation Index input-output framework we developed an alternative longitudinal index. The resulting country scores were used to construct a panel dataset composed of the 19 Eurozone members during the period 2013-2018, which were analysed through a series of multiple regression techniques. Results suggest a strong and positive influence of Business Sophistication on innovation outputs in Eurozone countries, derived mainly from the capacity of domestic firms to absorb knowledge. Possible implications for Spain could be derived from this fact, such as, for instance, encouraging inward foreign direct investment. Future research is needed to analyse the differentiated effects of such encouragement, as well as other surprising results of our study.

National Systems of Innovation Using an Application on EU Data

The growing importance of technological change in world production and employment is one of the characteristics of the last four decades. Technological change is not only a determinant of growth, but also affects the international competition and the modernisation of a country. The “science policy” is concerned with education and the stock of knowledge. “Technology policy” is concerned with the adoption and use of techniques, innovation, and diffusion of techniques. The division between the areas and variables of science policy and technology policy is not so clear. The term of “technological policy” indicates the national technological capabilities and also the structure and the planning on research and development. This paper attempts to review the theory and the current literature of the national systems of innovation. Furthermore, it attempts to apply some statistical measurement and indices in order to estimate the effects and the implications on EU innovation systems member states. For this purpose, a presentation of data and indicators has been applied.

National Systems of Innovation

The pursuit of economic growth stands out as one of the main imperatives within modern economies. Nevertheless, economies differ considerably in their competitiveness. Theories on the endogeneity of growth agree on the value of knowledge creation and innovativeness to determine a country’s capability to achieve a sustained performance and to adapt to the dynamics of changing environments and faster information flows. To this effect, national institutional regimes shape nation-specific contexts and embed individuals and firms. The resulting incentive structures shape the attitudes and behavior of individuals and firms alike, whose interactions contribute to the accumulation and flow of knowledge among the nodes of their networks. National systems of innovation (NSIs) therefore embody a concept that aims to analyze the national innovation performance of economies. It rests its rationale in the variation of national institutions that shape the diffusion of technologies through the process of shared knowledge creation and the development of learning routines. Both public and private institutions are thought to interact in a given nation-specific institutional context that essentially affects incentive schemes and resource allocation of the involved economic agents in creating, sharing, distributing, absorbing, and commercializing knowledge. To this effect, public policy plays a key role in the NSI through building bridges between these actors, reducing information asymmetries, and providing them with resources from others within the system. The different actors contributing to the creation and diffusion of knowledge within the system are needed to exchange information and provide the engine for sustained economic growth. Universities, research institutes, companies and the individual entrepreneur are in charge of shaping their economic system in a way that resource and skill complementarities are exploited to the mutual benefit.

National systems of innovation in the Eurozone: Policy implications for Spain

This paper aims to understand which innovation inputs are more strongly related to innovation outputs in the Eurozone, and to derive policy implication for the Spanish convergence with Eurozone top players in terms of innovation. Drawing from the Global Innovation Index input-output framework we developed an alternative longitudinal index. The resulting country scores were used to construct a panel dataset composed of the 19 Eurozone members during the period 2013-2018, which were analysed through a series of multiple regression techniques. Results suggest a strong and positive influence of Business Sophistication on innovation outputs in Eurozone countries, derived mainly from the capacity of domestic firms to absorb knowledge. Possible implications for Spain could be derived from this fact, such as, for instance, encouraging inward foreign direct investment. Future research is needed to analyse the differentiated effects of such encouragement, as well as other surprising results of our study.