Maritime University of Szczecin
Akademia Morska w Szczecinie
2010, 24(96) pp. 141–147 2010, 24(96) s. 141–147
Innovation in the context of economic situation in the EU
countries
Innowacyjność w kontekście sytuacji gospodarki w krajach
Unii Europejskiej
Radosław Wolniak
Silesian Technical University, Organization and Management Faculty, Production Engineering Institute Politechnika Śląska, Wydział Organizacji i Zarządzania, Instytut Inżynierii Produkcji
41-800 Zabrze, ul. Roosvelta 26, e-mail: radek_wol@o2.pl
Key words: innovation, quality, economic growth, industry, GDP per capita Abstract
The improvement of industrial enterprises requires a level of growth of enterprise innovation. The innovation at an economic scale has an influence on economic growth which is expressed by means of GDP per capita. There are clear correlations between innovation factors and a level of economic growth in the EU countries. The publication presents the analysis of chosen, mostly used innovation factors within an innovation influence side at level of prosperity in a given economy. On the basis of the gathered data, a model of linear regression describes dependence between innovation and GDP per capita. The situation of Poland has been examined in comparison with the other EU countries within a scope of innovation level in an entire innovation aspect, a contribution into innovation activity and innovation effect. The problems of the Polish economy in case of innovation effects, which are the lowest among the EU countries, have been also focused on in the following publication.
Słowa kluczowe: innowacyjność, jakość, wzrost gospodarczy, przemysł, PKB na mieszkańca Abstrakt
Doskonalenie jakości w przedsiębiorstwie przemysłowym wymaga wzrostu poziomu innowacyjności przed-siębiorstw. Innowacyjność w skali gospodarki ma silny wpływ na wzrost gospodarczy wyrażający się wskaź-nikiem PKB na mieszkańca. Można wskazać istotne statystycznie korelacje pomiędzy wskaźnikami innowa-cyjności a poziomem wzrostu gospodarczego dla krajów Unii Europejskiej. W artykule przedstawiono anali-zę wybranych, najcanali-zęściej stosowanych na świecie wskaźników innowacyjności w aspekcie wpływu innowa-cyjności na poziom dobrobytu w danej gospodarce. Na podstawie zgromadzonych danych opracowano model regresji liniowej opisujący zależność między innowacyjnością a PKN na mieszkańca. Zbadano sytuację Pol-ski na tle innych krajów Unii EuropejPol-skiej w zakresie poziomu innowacyjności w aspekcie całkowitej inno-wacyjności, wkładu w działalność innowacyjną oraz efektów innowacji. W artykule zwrócono szczególną uwagę na problemy polskiej gospodarki w przypadku efektów innowacji, które są najniższe wśród krajów Unii Europejskiej.
Introduction
The innovation is one of the most essentials elements of creating a competitive advantage of an industrial enterprise. Gaining a high quality of pro-duced goods can’t be achieved without innovation, using new solutions and technologies. The contem-porary global economy based on knowledge re-quires from a company to follow constantly clients’ needs and adjust its products to his requirements.
Knowledge and innovations have been in the centre of the EU interest since 2000 when the transformation of the EU economy into the most competitive and dynamic economy in the world became the major aim in Lisbon’s strategy [1]. Therefore, all the enterprise’s departments should be constantly improved by means of a constant improvement. It requires a permanent, constant improvement of all process in the organization.
However, it should be remembered that the process of improvement requires an appropriate leader, a company’s culture and an implementation of methodological conduct. The innovation of eco-nomy in particular industry is an important element of competitive advantage whose acquisition condi-tions the success of Polish organizacondi-tions on the European and worldwide market.
The innovation in economy
The innovation management in industrial enter-prises has been always one of the most import is-sues within the management improvement. Today, the innovation is not only a luxury but it is an es-sential necessity for most organizations. The proc-ess of innovation and improvement implementation is not easy [2]. The organization which wants to improve itself constantly has to face many prob-lems, such as: employees’ unwillingness, organiza-tion problems etc. In the literature, it is proposed that the process of organization’s changes should be conducted as 9 following measures [3]:
understanding and planning innovation,
innovation integration with strategic plans and defining success criteria,
reserves allocation, change of culture, plans implementation,
coordination of taken measures, publication of result,
rewarding,
patience, remembering about long-term perspec-tive on a problem.
According to R. Zalewski, a paradigm of eco-nomy based on knowledge induces to a different attitude to an innovation than before. The product innovations, which are an effect of international cooperation, have been becoming more and more important in recent years [4]. Moving a centre of gravity in activities of innovative companies from a single organization to a chain of companies co-operating with each other is underlined in the litera-ture [5]. J.A. Schumpter was a forerunner of the idea of innovation in the XIX centaury [6]. Accord-ing to J. Schumpeter, the essence of innovation is the use of production reserves in a new way, which has not been used simultaneously with their release from other usages so far [7]. He perceived innova-tions as a combination in functional dependence of the following possibilities, as follows [8]:
creation of new products and placing them on the market,
realization of new production ways,
gaining and creating a new market, creating new sources of gaining resources.
The innovation of the economy is usually under-stood as an ability and motivation of business enti-ties for constant search and use in practice the latest scientific research and results of scientific and research works, new concepts, ideas and inventions [9]. In case of the most developed countries, the aims of pro-innovative policy assume [10]:
gaining scientific and military advantage in the world;
increasing competitiveness of its own enter-prises in the international exchange;
creating new technologies of a high effective-ness;
increasing productivity of used reserves;
acquiring new sources of raw material and their effective use;
creating new materials of the highest quality features, such as: durability, flexibility, reliabi-lity;
eliminating ecological dangers in the world. There are many different definitions of innova-tions and constant improvement among scientists. For example, J. Juran defines the innovation as
a substantial change which causes the achievement of a higher level of perfection, a synonym to a breakthrough [11]. On the basis of a definition,
the innovation takes place when a change is
Table 1. Different perspectives on innovation Tabela 1. Różne ujęcia innowacji
Perspective Characteristics
Objective
This perspective answers the questions what arrangement or arrangements innovations con-cern. S. Sudoł [12] claims that they only concern the market. Also, according to Ch. Freman [13], market – oriented innovations are the most impor-tant. P. Druker [14] thinks that innovations should only have social dimension. The changes in an organization or concerning IT systems are some-times included in innovation [15].
Subjective
It is connected with a question: what the innova-tion concerns. The innovainnova-tion can be connected with different sectors of economy or single enter-prises.
Distinctive
This perspective draws attention to characteristics of innovations. They have mostly strategic and dynamic dimension. The inventive character is an essential feature of innovation. This character may refer to many aspects of its function. Novelty can concern, for example: raw materials, information, finances, interior construction, architecture, way of creating and using a product, ecology [16] etc. The innovation is a part of enterprises asset thus; it can refer to a product turnover and its circula-tion.
substantial, big; while a change is small, a term of improvement or a Japanese word, kaizen which best reflect this idea is used. Innovations can be studied in three different aspects: objectives, subjective and distinctive which are presented in table 1.
The analysis of dependence between innovation and GDP per capita in the EU countries
When analysing innovation in the worldwide and European economy, it is worth comparing relations between macroeconomic variables and innovation1. In table 2, data concerning innovation
indexes used in the world and GDP per capita for
the European countries were gathered. Two indexes of innovation were used in the analysis:1BCG
index2 and Pillars index3.
1 The studies have been done as a part of analysis
con-cerning Ministry of Science and Higher Education grant 2754/B/H03/2009/36 (University identification PBU 47/ROZ-3/2009).
2 The innovation index was prepared by Boston
Consult-ing Group. It is based on many variables, such as: fis-cal policy, immigration policy, and infrastructure, and education, quality of human resources, R & D invest-ment, publications, technology transfer, market capita-lization, employment, and investment.
3 The innovation index was counted differently
than Boston Consulting Group index. The scope of Table 2. Innovation in the EU countries (own study on exapmle of data from [17, 18, 19])
Tabela 2. Innowacyjność w krajach Unii Europejskiej (oprac. własne na podstawie [17, 18, 19])
EU Country BCG 1) Global Innovation Index Global Innova-tion Index Input Global Innova-tion Index Output Pillars Global Innovation Index Pillar Index Input Pillar Index Output GDP per capita2) [$] EU153) Austria 1.15 1.38 0.81 3.74 4.46 5.17 39 634 Belgium 0.86 0.85 0.79 4.35 5.00 3.70 36 235 Denmark 1.60 1.55 1.50 3.64 4.69 5.73 37 266 Finland 1.87 1.76 1.81 3.77 4.57 5.36 36 217 France 1.12 1.17 0.96 4.35 4.92 3.78 34 208 Greece 0.12 0.01 0.23 2.68 3.17 3.65 30 535 Spain 0.93 0.83 0.95 3.81 4.40 3.22 30 621 Holland 1.55 1.40 1.55 4.64 5.31 3.96 40 431 Ireland 1.88 1.59 1.99 3.61 4.30 4.99 42 539 Luxembourg 1.54 0.94 2.00 3.89 4.37 4.84 82 306 Germany 1.12 1.05 1.09 4.99 5.45 4.54 35 442 Portugal 0.60 0.92 0.22 2.73 3.49 4.26 22 190 Sweden 1.64 1.25 1.88 4.05 4.84 5.64 37 245 United Kingdom 1.42 1.33 1.37 4.82 5.60 4.04 36 523 Italy 0.21 0.16 0.24 3.65 3.88 3.43 30 581 EU254) Cyprus 0.63 0.64 0.56 2.82 3.39 3.97 29 830 Czech Republic 0.41 0.88 –0.10 3.17 3.64 4.12 25 395 Estonia 0.94 1.50 0.29 2.78 3.69 4.60 20 259 Lithuania 0.16 0.71 –0.40 2.79 3.43 4.07 18 946 Malta 0.20 –0.21 0.59 2.79 3.54 4.30 23 760 Latvia 0.12 0.38 –0.14 2.40 3.10 3.80 17 071 Poland –0.12 0.22 –0.44 3.15 3.58 2.72 17 482 Slovakia 0.21 0.72 –0.31 3.09 3.59 4.10 22 040 Slovenia 0.37 0.47 0.24 3.04 3.59 4.14 29 472 Hungary 0.51 0.81 0.18 2.79 3.34 3.89 19 499 EU275) Romania –0.29 0.22 –0.77 2.48 2.92 3.37 12 580 Bulgaria –0.13 0.23 –0.48 2.32 2.85 3.37 12 341
1)Boston Consulting Group; 2) Data for 2009; 3) The countries forming the European Union before the accession of new members in
2004: Austria, Belgium, Denmark, Finland, France, Greece, Spain, Holland, Ireland, Luxembourg, Germany, Portugal, Sweden, United Kingdom and Italy. These countries are also known as the “Old Union”;
4) The area of the enlarged European Union, which took place on 1 May 2004. Then joined the Community 10 members: Cyprus,
Czech Republic, Estonia, Lithuania, Latvia, Malta, Poland, Slovakia, Slovenia and Hungary.
5) The area of the enlarged European Union, which took place on 1 January 2007. Community acceded to the 2 state: Romania
In the analysed countries, countries of so called “old union” are marked with the highest level of innovation from a statistical perspective (Pillars index). Greece whose innovation is low is the exception (2, 68). From dynamic perspective, Ireland, Sweden and the Great Britain are marked with the highest level of innovation, which was measured by means of BCG innovation index.
Poland in the Pillars juxtaposition scores mode-rately. However, it is worth underlining that our innovations are marked with a low affectivity. What proves it is the fact that the index of contribu-tion into an innovative activity of our country is rather at average level and additionally, the index of innovation effectiveness is much worse. Poland within the Pillars index has the worst index of af-fectivity of innovation in the European Union. BCG index seems to be also worrying. In this case Poland has an average index of contribution into innovative activity but there are very poor results within the scope of effects of innovation.
Table 3 presents a factor of the linear correlation between innovation indexes and GDP per capita for studied countries. All counted correlations are posi-tive and statistically essential at the level of signi-ficance 0.05. They develop at level of moderate correlation for the whole EU for Pillar innovation index. Luxemburg should be excluded from the analysis because it has GDP per capita at the level which is twice higher than in case of the studied countries belonging to the EU. Thus, as a diverging observation, it can distort the studied relation.
Having excluded Luxemburg from the analysis, the correlation between variables has increased substantially. The similar situation occurs for both of the analysed innovation indexes. In this case, the correlation is strong and after having excluded Luxemburg, it is very high.
Figure 1 presents the dependence between inno-vation indexes4 and GDP per capita for all the
European countries5. On the basis of the data, the following equation of a regression model, which describes the dependence, can be described:
entrances is comprised with the following variables: institutions and policy, human potential, infrastructure, technology, capital market. While, in case of exits, the scope of the index is comprised of such factors: know-ledge, competence, health.
4 Global Innovation Index was used in this model.
5 Due to the fact that GDP per capita of Luxemburg
diverges a lot from the rest data, it was decided that correlation for the EU countries excluding a special case of Luxemburg will be deducted.
Innovation index =
= – 6321.86 + 10735.74 GDP per capita (1) Most of countries fall within the scope of trust. Luxemburg diverges from a typical result which has a substantially higher level of GDP per capita than it results from its innovation. Yet, it caused by a specificity of small, well-developed country which will never be applied in case of the rest of the countries. That’s why; figure 1 presents de-pendence in the countries excluding Luxemburg. In this case, there are two groups of countries which are characterized by a high GDP with respect to the innovation:
• well-developed countries which have medium innovations along with a very high GDP – Ire-land, Austria, Denmark, Finland;
• countries marked by low innovation connected with a medium level of GDP per capita – Greece, Cyprus, and Slovenia.
Table 3. Pearson’s correlation between GDP per capita and EU countries
Tabela 3. Korelacje Persona pomiędzy PKB per capita a kra-jami Unii Europejskiej
Type of Index The European Union
The European Union without Luxemburg Global Innovation Index 0.71** 0.85** Global Innovation Index
Innovation Input 0.43* 0.63** Global Innovation Index
Innovation Output 0.80** 0.89** Pillars Innovation Index 0.64** 0.79** Pillars Innovation Index
Innovation Input 0.59** 0.82** Pillars Innovation Index
Innovation Output 0.48* 0.55* *It means that variables are correlated at the level of 0.05 whereas, **correlation at the level of 0.001.
It is worth drawing attention to the fact that Poland is visibly below trust range. Our country in the EU has an out of proportion low GDP in com-parison with the innovation of the Polish economy. Poland cannot use its own potential to create the national wealth measured by means of GDP per capita. A poor GDP per capita in Poland in com-parison with innovation is probably a consequence of the already mentioned fact that the innovation in our country is very ineffective.
The analysis results are proved by dependence between GDP per capita in the EU countries and innovation effects index which is presented in figure 2. The graph shows that a high GDP is achieved by the countries characterized by high innovation effectiveness. Poland with the lowest
GDP per capita = -2954,7956+9216,1298*x; 0,95 Prz.Ufn. AU BE DA FI FR GR SP HO IR GE PO SW GB IT CY CZ ES LI MA LA PL SLA SLE HU RO BU 2,2 2,4 2,6 2,8 3,0 3,2 3,4 3,6 3,8 4,0 4,2 4,4 4,6 4,8 5,0 5,2
Pillars Innovation Indicator
10000 15000 20000 25000 30000 35000 40000 45000 G D P p e r ca p ita [$ ] AU BE DA FI FR GR SP HO IR GE PO SW GB IT CY CZ ES LI MA LA PL SLA SLE HU RO BU
Fig. 1. Dependence between innovation indexes and GDP per capita for the EU countries apart from Luxemburg.
Rys. 1. Zależność pomiędzy wskaźnikiem innowacyjności a PKB na mieszkańca dla krajów Unii Europejskiej z wyłączeniem Luksemburga AU BE FI DA FR GR SP HO IR DO PO SW GB IT CY CZ ES LI MA LA PL SLA SLE HU RO BU 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0
Innovation Output - Pillars Indicator
10000 15000 20000 25000 30000 35000 40000 45000 G D P p e r ca p ita [$ ] AU BE FI DA FR GR SP HO IR DO PO SW GB IT CY CZ ES LI MA LA PL SLA SLE HU RO BU
Fig. 2. Dependence between GDP per capita for the EU countries (apart from Luxemburg) and innovation effects
innovation effectiveness in Europe has at the same time, a low level of GDP per capita. The improve-ment of our level of economy requires the im-provement of innovation effectiveness in industries. It is proved by the statistical date concerning in particular the output index and innovation effects, in case of which Poland gains poor results, for example in the field of:
patent registrations,
number of registration of foods sign,
employment in a sector of high technologies, etc.
Low ability of Polish economy to generate innovations has an influence on focusing research subjects on low expenses of the country in favour of innovative economy [20]. The measurement of innovations in industries and an active policy of upgrading effectiveness of aggregated outlay for innovation of economy are not so much popular with our country [21].
On the basis of the statistical research conducted by people connected with innovation, it seems that inside sources have an important role in an innova-tive activity of an enterprise. According to specia-lists, achieving a high level of innovation by eco-nomy leads to increasing the competitiveness level of an enterprise on the global market.
The following measures help to gain this com-petitive advantage [22]:
creating high-technology products, supported effectively by a functional management system, use of the modern technology and development
of production organizing systems,
producing products of the highest quality in terms of type and workmanship,
development of logistics and distribution sys-tems,
shaping marketing orientation,
creating conditions for the development of inno-vation.
The results of analysis presented in this publica-tions confirms the studies conducted by the author’s publication done within research grant 2754/B/H03/ 2009/36 (University symbols PBU 47/ROZ-3/2009) “Culture dimensions of the Polish organizations and the improvement of quality management.” It results that the innovation of organizations measured by means of such indexes as a number of innovations in a company per an employee or employee rewarding for innovation activity is posi-tively correlated (at the high level of significance) with many aspects of quality management im-provement or a company’s position on the market and its financial condition.
Conclusion
Studies on the influence of innovation on GDP per capita allow claiming that these variables are strongly connected with each other. The depen-dence between innovation and a country’s wealth measured by GDP per capita index has a linear character. A high innovation in the industry has an influence on the higher quality of industrial pro-ducts manufactured by the organization, what in turn results in higher competitiveness in the global market. The higher competitiveness of industries leads to the better position on the market and to growth of national wealth.
As it results from the studies Poland’s situation in the field of innovation, is difficult. In Polish economy, investments in innovation activities do not go along with its result. Very low index of innovation results (according Pillar methodology is lower in EU) caused that there are few patents and new solution in the Polish industry. While innova-tion soluinnova-tions lead to the improvement of quality at level of a single industry or the whole economy. In this context, all the taken measures should lead to the improvement of affectivity of national inno-vations.
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Recenzent: dr hab. inż. Zofia Jóźwiak, prof. AM Akademia Morska w Szczecinie
