An assessment of regional innovation capacity as a factor of economic growth of Romanian regions
Keywords:
Innovation, Regions, Romania, Economic growthAbstract
According to Regional Innovation Scoreboard 2016, Romania’s regions, including the Bucuresti-Ilfov region, are ranked as modest innovators. This label says much but too little, at the same time, about the capacity of Romania to generate innovation. This paper aims to identify the potential ways of economic growth of the Romanian regions through its innovation absorptive capacity and innovation development capacity, according to the AC/DC model of the National Endowment for Science, Technology and the Arts (NESTA), UK. Using the 2016 pillar scores of the Regional Competitiveness Index (RCI) - Innovation sub-index, we analyze their compatibility with the NESTA model and assess the potential of Romanian regions to absorb external innovation. The paper proposes a qualitative and quantitative approach based on empirical evidence. The poor performances of the Romanian regions regarding innovation, as they were analyzed in this paper, draw attention to Romania's need to exploit innovation from abroad. The main conclusion of our analysis is that Romania has failed to reach the absorption threshold of innovation that will allow it to accelerate the value-creating processes. The ability to innovate completes the ability to absorb. A detailed analysis of the causes of reduced absorption capacity could also provide solutions for accelerating economic growth. We also formulate policy recommendations to increase Romania's regional competitiveness through the development of innovation capacity.
References
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De Propris, L., & Hamdouch, A. (2013). Regions as knowledge and innovative hubs. Regional Studies, 47(7), 997-1000.
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European Regional Competitiveness Index 2016, Available at: https://ec.europa.eu/regional_policy/en/information/maps/regional_competitiveness/#3
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Goschin, Z. (2014). R&D as an Engine of Regional Economic Growth in Romania. Romanian Journal of Regional Science, 8(1), 24-37.
Henderson, J. V. (1986). Efficiency of resource usage and city size. Journal of Urban Economics, 19, 47-70.
Kim, J. I., & Lau, L. J. (1996). The sources of Asian Pacific economic growth. The Canadian Journal of Economics/Revue Canadienne d'Economique, 29, S448-S454. Martin, R., Sunley, P., Gardiner, B., Evenhuis, E. & Tyler, P. (2018). The City Dimension of the Productivity Problem: The Relative Role of Structural Change and Within-Sector Slowdown. Journal of Economic Geography, 18.3, 539-570.
Kim, L., Nelson, R. R., & Nelson, R. R. (Eds.). (2000). Technology, learning, and innovation: Experiences of newly industrializing economies. Cambridge University Press.
Mahroum, S., Huggins, R., Clayton, N., Pain, K., & Taylor, P. (2008). Innovation by Adoption Measuring and mapping absorptive capacity in UK nations and regions. London: NESTA. Retrieved from https://media.nesta.org.uk/documents/innovation_by_adoption.pdf.
Marques, P., & Morgan, K. (2018). The heroic assumptions of smart specialization: A sympathetic critique of regional innovation policy. In New avenues for regional innovation systems-theoretical advances, empirical cases and policy lessons (pp. 275-293). Springer, Cham.
McCann, P., & Van Oort, F. (2019). Theories of agglomeration and regional economic growth: a historical review. In Capello R. & Nijkamp, P. (Ed.) Handbook of regional growth and development theories (pp. 6-23) Edward Elgar Publishing.
Moomaw, R. L. (1985). Firm location and city size: reduces productivity advantages as a factor in the decline of manufacturing in urban areas. Journal of Urban Economics, 13, 525-545.
Nastase, C., & Kajanus, M. (2008). The role of the universities in a regional innovation system–a comparative a’wot-analysis. The Amfiteatru Economic Journal, 10(23), 219-224.
Narula, R. (2003). Globalization and technology: interdependence, innovation systems and industrial policy. Cambridge: Polity Press.
Narula, R. (2004). Understanding absorptive capacities in an "innovation systems" context consequences for economic and employment growth. DRUID Working Papers 04-02, DRUID, Copenhagen Business School, Retrieved from https://cris.maastrichtuniversity.nl/portal/files/1197181/guid-9512d6b7-7a7f-475d-852b-b57a30377067-ASSET1.0.
OECD (1971). R&D in OECD member countries: Trends and objectives. Paris: OECD.
OECD (2010). Towards a Measurement Agenda for Innovation. Retrieved from https://www.oecd.org/site/innovationstrategy/45392693.pdf
Potter, A., & Watts, H. D. (2011). Evolutionary agglomeration theory: increasing returns, diminishing returns, and the industry life cycle. Journal of Economic Geography, 11 (2011), 417-455.
Schwab, K. (ed.) (2017). The Global Competitiveness Report 2017–2018. World Economic Forum. Retrieved from http://www3.weforum.org/docs/GCR2017-2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf.
Serbanica, C. M., Constantin, D. L., & Dragan, G. (2015). University–Industry Knowledge Transfer and Network Patterns in Romania: Does Knowledge Supply Fit SMEs' Regional Profiles?. European Planning Studies, 23(2), 292-310.
Sveikauskas, L. A. (1975). The productivity of the cities. Quarterly Journal of Economics, 89, 393-414.
Talmaciu, M. (2012). Considerations regarding the development of Romanian regional economies through innovation and entrepreneurship. Procedia Economics and Finance, 3, 914-920.
Young, A. (1993). Substitution and complementarity in endogenous innovation. The Quarterly Journal of Economics, 108(3), 775-807. Retrieved from https://doi.org/10.2307/2118408.
Xu, B. (2000). Multinational enterprises, technology diffusion, and host country productivity growth. Journal of Development Economics, Elsevier, 62(2), 477-493.
Annoni, P., Dijkstra, L. & Gargano, N. (2017). The EU Regional Competitiveness Index 2016. Working Paper 02/2017. European Commission, Brussels.
Beeson, P. E. (2017). Agglomeration economies and productivity growth. In McDonald, J. F. (Ed.), Sources of metropolitan growth (pp. 19-33). New York: Routledge, Retrieve from https://doi.org/10.4324/9781315130064.
Borensztein, E., De Gregorio J., & Lee, J. W. (1998). How does foreign direct investment affect economic growth? Journal of International Economics. 45(1), 115-135. Retrieved from https://doi.org/10.1016/S0022-1996(97)00033-0.
Bottazzi, L., & Peri, G. (2003). Innovation and spillovers in regions: Evidence from European patent data. European economic review, 47(4), 687-710.
Catin, M. (1991). Economies d’agglomération et gain de productivité. Revue d’économie regionale et urbaine, 5, 565–598.
Ciccone, A., & Hall, R. (1996). Productivity and the density of economic activity. American Economy Review, 86(1), 54-70.
Clark, J., & Guy, K. (1998). Innovation and Competitiveness: A Review. Technology Analysis & Strategic Management, 10(3). Retrieved from https://www.researchgate.net/publication/232945368_Innovation_and_Competitiveness_A_Review.
Clipa, R. I., & Ifrim, M. (2016). Measuring regional competitiveness. The case of Romania. The Annals of University of Oradea. Economic Sciences, 1, 103-111.
Cohen, J. P., Coughlin, C. C., & Morrison Paul, C. J. (2019). Agglomeration, productivity and regional growth: production theory approaches. In Capello, R. & Nijkamp, P. (Ed.) Handbook of regional growth and development theories (pp. 104-123) Edward Elgar Publishing.
Cooke, P., Uranga, M. G., & Etxebarria, G. (1998). Regional systems of innovation: an evolutionary perspective. Environment and planning A, 30(9), 1563-1584.
Dan, M. C. (2012). Innovative clusters: a solution for the economic development of Romania. Theoretical & Applied Economics, 9 (574), 5-16.
Dahlman, C. J., & Nelson, R. (1995). Social absorption capability, national innovation systems and economic development. In Social capability and long-term economic growth (pp. 82-122), London: Palgrave Macmillan.
De Propris, L., & Hamdouch, A. (2013). Regions as knowledge and innovative hubs. Regional Studies, 47(7), 997-1000.
Dijkstra, L., Annoni P., & Kozovska, K. (2011). A new European Regional Competitiveness Index: theory, methods and findings. DG Regional Policy Working Papers WP02/2011. Retrieved from https://pdfs.semanticscholar.org/2b92/a38b19e03d91408d987f112d3e138fb2b263.pdf.
Duranton, G. (2014). Growing through cities in developing countries. The World Bank Research Observer, 30(1), February 2015, 39-73. Retrieved from https://doi.org/10.1093/wbro/lku006.
European Commission (2016). Regional Innovation Scoreboard 2016. Retrieved from https://publications.europa.eu/en/publication-detail/-/publication/693eaaba-de16-11e6-ad7c-01aa75ed71a1/language-en/format-PDF/source-31233711.
European Regional Competitiveness Index 2016, Available at: https://ec.europa.eu/regional_policy/en/information/maps/regional_competitiveness/#3
Freeman, C., & Soete, L. (1997). Economics of Industrial Innovation. London: Routledge. Retrieved from https://doi.org/10.4324/9780203064474.
Goschin, Z. (2014). R&D as an Engine of Regional Economic Growth in Romania. Romanian Journal of Regional Science, 8(1), 24-37.
Henderson, J. V. (1986). Efficiency of resource usage and city size. Journal of Urban Economics, 19, 47-70.
Kim, J. I., & Lau, L. J. (1996). The sources of Asian Pacific economic growth. The Canadian Journal of Economics/Revue Canadienne d'Economique, 29, S448-S454. Martin, R., Sunley, P., Gardiner, B., Evenhuis, E. & Tyler, P. (2018). The City Dimension of the Productivity Problem: The Relative Role of Structural Change and Within-Sector Slowdown. Journal of Economic Geography, 18.3, 539-570.
Kim, L., Nelson, R. R., & Nelson, R. R. (Eds.). (2000). Technology, learning, and innovation: Experiences of newly industrializing economies. Cambridge University Press.
Mahroum, S., Huggins, R., Clayton, N., Pain, K., & Taylor, P. (2008). Innovation by Adoption Measuring and mapping absorptive capacity in UK nations and regions. London: NESTA. Retrieved from https://media.nesta.org.uk/documents/innovation_by_adoption.pdf.
Marques, P., & Morgan, K. (2018). The heroic assumptions of smart specialization: A sympathetic critique of regional innovation policy. In New avenues for regional innovation systems-theoretical advances, empirical cases and policy lessons (pp. 275-293). Springer, Cham.
McCann, P., & Van Oort, F. (2019). Theories of agglomeration and regional economic growth: a historical review. In Capello R. & Nijkamp, P. (Ed.) Handbook of regional growth and development theories (pp. 6-23) Edward Elgar Publishing.
Moomaw, R. L. (1985). Firm location and city size: reduces productivity advantages as a factor in the decline of manufacturing in urban areas. Journal of Urban Economics, 13, 525-545.
Nastase, C., & Kajanus, M. (2008). The role of the universities in a regional innovation system–a comparative a’wot-analysis. The Amfiteatru Economic Journal, 10(23), 219-224.
Narula, R. (2003). Globalization and technology: interdependence, innovation systems and industrial policy. Cambridge: Polity Press.
Narula, R. (2004). Understanding absorptive capacities in an "innovation systems" context consequences for economic and employment growth. DRUID Working Papers 04-02, DRUID, Copenhagen Business School, Retrieved from https://cris.maastrichtuniversity.nl/portal/files/1197181/guid-9512d6b7-7a7f-475d-852b-b57a30377067-ASSET1.0.
OECD (1971). R&D in OECD member countries: Trends and objectives. Paris: OECD.
OECD (2010). Towards a Measurement Agenda for Innovation. Retrieved from https://www.oecd.org/site/innovationstrategy/45392693.pdf
Potter, A., & Watts, H. D. (2011). Evolutionary agglomeration theory: increasing returns, diminishing returns, and the industry life cycle. Journal of Economic Geography, 11 (2011), 417-455.
Schwab, K. (ed.) (2017). The Global Competitiveness Report 2017–2018. World Economic Forum. Retrieved from http://www3.weforum.org/docs/GCR2017-2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf.
Serbanica, C. M., Constantin, D. L., & Dragan, G. (2015). University–Industry Knowledge Transfer and Network Patterns in Romania: Does Knowledge Supply Fit SMEs' Regional Profiles?. European Planning Studies, 23(2), 292-310.
Sveikauskas, L. A. (1975). The productivity of the cities. Quarterly Journal of Economics, 89, 393-414.
Talmaciu, M. (2012). Considerations regarding the development of Romanian regional economies through innovation and entrepreneurship. Procedia Economics and Finance, 3, 914-920.
Young, A. (1993). Substitution and complementarity in endogenous innovation. The Quarterly Journal of Economics, 108(3), 775-807. Retrieved from https://doi.org/10.2307/2118408.
Xu, B. (2000). Multinational enterprises, technology diffusion, and host country productivity growth. Journal of Development Economics, Elsevier, 62(2), 477-493.
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2019-12-30
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An assessment of regional innovation capacity as a factor of economic growth of Romanian regions. (2019). Timisoara Journal of Economics and Business, 12(2), 227-242. https://www.tjeb.ro/index.php/tjeb/article/view/323
