R and D, and competitiveness in the enlarged EU: the role of the state and financing

Istvan Korosi ()
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Istvan Korosi: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences

No 172, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: Technological development during recent decades has led to increased world-market competition. The material-intensive, medium-quality products of a technological level with low intellectual content are not only loosing value at a rapid pace but even tend to suffer the absolute loss of their markets. The world-market position of the countries supplying such products is ever weaker. During the 1990–2004 period, the efficiency of technological development and the innovative capacity of the economy had an ever stronger effect on world-market position. The tendency is also prevalent at the turn of the millennium. The EU countries dedicate different ratios of their GDP to R and D, and the efficiency of technological development also varies from country to country. The enlargement of the European Union in 2004 has significantly increased the community’s potential in terms of human capital, scientific research, intellectual products and qualified manpower. Despite the enlargement of the EU, its total R and D investment has only grown to a limited extent. The state has the primary task to enhance scientific research and inventions by spending the highest possible amount on R and D to have results that can be turned into marketable products by innovation, thereby enabling the economy to catch up with the required level and to develop further. The products and services gained in this way lead to an increased world-market share and improved terms of trade. However, due to limited public financial resources the role of the corporate sector in financing R and D is ever increasing. This role can be greatly enhanced by any country if its economic policy and the characteristic features of its research policy are aimed at stimulating R and D.

Keywords: world market; competition; research and development; technological development; invention. sciences; innovation (search for similar items in EconPapers)
Pages: 19 pages
Date: 2006-12
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