Economics and Policy of Innovation Article Summary Kushev, Lyubomir Università degli studi di Trieste Prof. Vittorio Alberto Torbianelli |1

“The R&D and innovation systems in Romania and Bulgaria in the EU context” By Steliana Sandu, Zizi Goschin, Irina Anghel, Gloria Goschin, Institute of National Economy, Romanian Academy |2

Content Introduction to the Article The R&D and Innovation Convergence Downgrading The R&D and Innovation Convergence Main Factors of the innovation performance The “Sigma convergence”, method applied for assessing the gap in R&D b/n former and newer EU countries Absorption Capacity for knowledge as an important factor of innovation convergence. Conclusion

Downgrading What is the situation? What is the aim of the Article? Key points of the article: Catching-up analysis Sigma Convergence Absorptive Capacity © 2016 Economics and Policy of Innovation|4

Content Introduction to the Article The R&D and Innovation Convergence What is the goal? Factors Main Factors of the innovation performance The “Sigma convergence”, method applied for assessing the gap in R&D b/n former and newer EU countries Absorption Capacity for knowledge as an important factor of innovation convergence. Conclusion

What is the goal? Why is it important to close the gap between poor performers nad innovation leaders? Methods for assessing the progress? Problems? “…the 2013 Innovation Union Scoreboard, an official document of the EC acknowledged not just static convergence, but even disturbances in the innovation convergence processes between the MS” (IUS, 2013, p.6) © 2016 Economics and Policy of Innovation|6

Figure 1 © 2016 Economics and Policy of Innovation|7

Figure 2 (Innovation performance in Europe) © 2016 Economics and Policy of Innovation|8

Factors Former centralized R&D research systems Restructuring of the governments after the 1990s Lower R&D intensity after the crisis compared to the EU*: EU average – 2,02% Bulgaria – 0,65% Romania – 0,39% *measured as a share of expenditure for R&D in GDP © 2016 Economics and Policy of Innovation|9

Figure 3 © 2016 Economics and Policy of Innovation|10

Distribution of the R&D expenditure by performance sector © 2016 Economics and Policy of Innovation|11

BERD indicator © 2016 Economics and Policy of Innovation|12

Companies’ investment in R&D © 2016 Economics and Policy of Innovation|13

Content Introduction to the Article The R&D and Innovation Convergence Main Factors of the innovation performance Enablers, Firm activities, Outputs The “Sigma convergence”, method applied for assessing the gap in R&D b/n former and newer EU countries Absorption Capacity for knowledge as an important factor of innovation convergence. Conclusion

Enablers, Firm Activities, Outputs Dimension relater to: HR The R&D system and its science base Finance and support Firm Activities Integrates the indicators expressing the innovation efforts at the company level: Investments, both R&D and non-R&D Potential generators of innovations at firm level Entrepreneurial and collaboration efforts Various form of IPRs Outputs Captures the firms’ innovation activities: Innovators Economic Effects © 2016 Economics and Policy of Innovation|15

Table 5 © 2016 Economics and Policy of Innovation|16

Table 6 © 2016 Economics and Policy of Innovation|17

Table 7 © 2016 Economics and Policy of Innovation|18

Figure 8 © 2016 Economics and Policy of Innovation|19

Content Introduction to the Article The R&D and Innovation Convergence Main Factors of the innovation performance The “Sigma convergence”, method applied for assessing the gap in R&D b/n former and newer EU countries What is “Sigma convergence”? Absorption Capacity for knowledge as an important factor of innovation convergence. Conclusion

What is “Sigma convergence”? Introduced by Barro and Sala-i-Martin in 1995, describes a process of abatement of the dispersion of the variable at stake, given cross-sectional data. Simply put: Sigma convergence refers to the reduction of dispersion of levels of income across economies. © 2016 Economics and Policy of Innovation|21

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Figure 11 © 2016 Economics and Policy of Innovation|23

Figure 12 © 2016 Economics and Policy of Innovation|24

Content Introduction to the Article The R&D and Innovation Convergence Main Factors of the innovation performance The “Sigma convergence”, method applied for assessing the gap in R&D b/n former and newer EU countries Absorption Capacity for knowledge as an important factor of innovation convergence. A bit about Absorption Capacity Conclusion

A bit about Absorption Capacity Evident interlacing between firm level and national level AC Murovec and Prodan (2009) Narula (2004) © 2016 Economics and Policy of Innovation|26

Table 10 © 2016 Economics and Policy of Innovation|27

Content Introduction to the Article The R&D and Innovation Convergence Main Factors of the innovation performance The “Sigma convergence”, method applied for assessing the gap in R&D b/n former and newer EU countries Absorption Capacity for knowledge as an important factor of innovation convergence. Conclusion

Conclusion “… we can say that budgets are management tools whose use contributes to the improvement of performance.“ “… But statistically speaking, the link between budgets and performance has not been validated through the economic model developed.“ “Budgets can explain 27% of the variation in performance.” Bottom line (literally and figuratively): “Therefore, we believe budgets are useful tools in the activity of economic entities that contribute to superior performance.” Baroto (2012)

“Thank You For Your Attention!” -Lyubomir Kushev Any Questions? “Thank You For Your Attention!” -Lyubomir Kushev © 2016 Economics and Policy of Innovation|30