Contrary to the post-war period where growth and catching-up with the United States could largely be achieved through accumulation of production factors and from assimilating existing technologies, once European countries had moved closer to the technology frontier, innovation has become the main engine of growth. In other words, the balance between imitation and innovation has shifted in favor of the second. At the heart of this ability to innovate lie all those factors that lead either to the introduction of new products (product innovation) or to the introduction of new production processes (process innovation).
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
Several European countries were able, above all in the immediate post-War decades, to successfully pursue a process of catching up. It was therefore possible to reach the technological frontier in important areas. However, the growth that is attributable to catch up came to an end, at the latest, at the beginning of the 1980s when the easy gains from imitating and incrementally improving existing technologies became exhausted and demand became saturated for the output of leading industries. A decrease in the importance both of imitating successful economies and of simple incremental innovations for economic growth are inextricably linked with the ending of the process of catching up (see Sapir et al., 2004, pp. 35–37).
- 2.
Such benchmarks show the position of various national economies across a range of measures of innovation; they do not, however, provide an overall ranking based on those indicators that are most relevant for economic growth.
- 3.
Above all, we choose Germany as the base country, as it was the laggard among the countries analysed here. If growth rates over the ten years until 2004 are averaged out, then Germany, with an annualized growth rate in per capita GDP of only 1.2% in real terms, is last amongst 22 OECD countries.
- 4.
The USA and other successful economies have managed to increase their productivity rates despite a simultaneous increase in their rates of employment. This also applies to low-skilled labor in the US. This implies that the USA has obviously been more successful at transforming inventions in basic science into growth-enhancing innovations. High rates of hourly productivity alone are no indication of being a technological frontrunner. Several European countries, of which Germany is a good example, have high levels of labor productivity per hour; at the same time, however, they exhibit low levels of employment. Other countries that have higher employment levels have lower hourly productivity rates.
- 5.
The p-value of the t-test that the means for the two groups are different is 0.1 and 0.375 for investments in education and for the share of the population with a doctorate, respectively.
- 6.
The p-value of the t-test on mean equivalence is 0.4 and just under 0.6 for tax relief on R&D and investments in R&D, respectively; this indicates that there are no statistically significant differences between the two groups on these two measures.
- 7.
The p-value of the t-test on mean equivalence is 0.122 and 0.394 for labor-market regulation and the quality of the education system as measured by PISA, respectively. This means that the growth stars and laggards are not significantly different on these two measures.
References
Acemoglu, D., Aghion, P., & Zilibotti, F. (2002). Distance to frontier, selection and economic growth (NBER Working Paper No. 9066). Cambridge, MA: National Bureau of Economic Research.
Aghion, P., & Howitt, P. (1992). A model of growth through creative destruction. Econometrica, 60, 323–351.
Aghion, P., Meghier, C., & Vandenrusche, J. (2003). Growth, education and distance to the technological frontier. Mimeo, Harvard University: Boston.
Arnold, E., & Thuriaux, B. (2003). Introduction. In European Commission (Ed.), Future directions of innovation policy in Europe (pp. 1–10). Brussels: European Commission.
Bassanini, A., & Scarpetta, S. (2002). Growth, technological change, and ICT diffusion: Recent evidence from OECD countries. Oxford Review of Economic Policy, 18, 324–344.
BMBF – Bundesministerium für Bildung und Forschung (2004). Technologie und Qualifikation für neue Märkte. Bonn and Berlin: BMBF.
Boyer, R. (2004). New growth regimes, but still institutional diversity. Socio-Economic Review, 2, 1–32.
Brandt, N., Burniaux, J.-M., & Duval, R. (2005). Assessing the OECD jobs strategy: Past developments and reforms. (OECD Economics Department Working Paper No. 429). Paris: OECD.
EIS. (2005). European Innovation Scoreboard. http://trendchart.cordis.lu/scoreboards/scoreboard2005/pdf/EIS%202005.pdf [1-20-2006].
European Commission. (2004a). Benchmarking enterprise policy. Brussels: European Commission.
European Commission. (2004b). The EU Economy: 2004 Review. Brussels: European Commission.
EUROSTAT. (2005). NewCronos. http://europa.eu.int/comm/eurostat/newcronos/reference/display.do?screen=welcomeref&open=/&product=EU_MAIN_TREE&depth=1&language=de [Download: 1-20-2005].
Fagerberg, J. (2003). The innovative society. In European Commission (Ed.), Future directions of innovation policy in Europe (pp. 16–19). Brussels: European Commission.
Fagerberg, J. (2005). The dynamics of technology, growth and trade: A Schumpeterian perspective. In H. Hanusch & A. Pyka (Eds.), Elgar Companion to Neo-Schumpeterian Economics. Cheltenham: Edward Elgar, forthcoming.
Farhauer, O., & Henke, K.-D. (2002). Wachstumstheoretische Konzeptionen und wirtschaftspolitische Folgerungen. Das Wirtschaftsstudium, 31, 582–590.
Fehn, R. (2004). Strukturwandel und europäische Wirtschaftsverfassung: Gibt es einen Zielkonflikt zwischen Effizienz und Sicherheit? In W. Schäfer (Ed.), Zukunftsprobleme der europäischen Wirtschaftsverfassung (pp. 87–121). Berlin: Duncker & Humblot.
Gehrig, T. P. (2000). Zur Politischen Ökonomie des Technischen Fortschritts. In B. Külp & V. Vanberg (Eds.), Freiheit und wettbewerbliche Ordnung. Gedenkband zur Erinnerung an Walter Eucken (pp. 561–577). Freiburg, Berlin: Haufe Verlagsgruppe.
IMF – International Monetary Fund. (2005). Norway – Staff report for the 2005 article IV consultation. Washington, DC: IMF.
Jungmittag, A. (2004). Innovations, technological specialisation and economic growth in the EU. International Economics and Economic Policy, 1(2, 3), 247–273.
Larsen, E. R. (2004). Escaping the resource curse and the Dutch disease? When and why Norway caught up with and forged ahead of its neighbours, statistics Norway (Discussion Paper No. 377). Research Department.
Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35, 688–726.
Matthes, J., & Schröder, C. (2005). Business regulation in international comparison – Aggregating world bank. “Doing business” data. CESifo Forum, 6(1), 42–49.
Murphy, K. M., Shleifer, A., & Vishny, R. W. (1991). The allocation of talent: Implications for growth, Quarterly Journal of Economics, 106, 503–530.
Nicoletti, G., & Scarpetta, S. (2003). Regulation, productivity and growth: OECD evidence (OECD Economics Department Working Papers No. 347). Paris: OECD.
OECD. (2004a). Employment outlook. Paris: OECD.
OECD. (2004b). OECD science, technology and industry scoreboard 2003. Paris: OECD. http://www1.oecd.org/publications/e-book/92-2003-04-1-7294 [Download: 11-22-2004].
OECD. (2004c). Wirtschaftsbericht Deutschland. Paris: OECD.
OECD. (2004d). Lernen für die Welt von morgen. Erste Ergebnisse von PISA 2003, Paris: OECD.
OECD. (2004e). Education at a glance. Paris: OECD.
OECD. (2004f). OECD-education database. http://www1.oecd.org/scripts/cde/members/EDU_UOEAuthenticate.asp [Download: 1-20-2005].
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98, 71–102.
Romer, D. (1996). Advanced macroeconomics. New York: McGraw Hill.
Sapir, A., Aghion, P., Bertola, G., Hellwig, M., Pisani-Ferry, J., Rosati, D., et al. (2004). An agenda for a growing Europe. The Sapir Report. Oxford: Oxford University Press.
Scarpetta, S., & Tressel, T. (2004). Boosting productivity via innovation and adoption of new technologies: Any role for labor market institutions? (Policy Research Working Paper Series No. 3273). Washington, DC: The World Bank.
Van Ark, B. (2003). The productivity problem of the Dutch economy: Implications for economic and social policies and business strategy. Groningen: Research Memorandum GD-66, Groningen Growth and Development Centre.
World Bank (2004). Doing business in 2005 – Removing obstacles to growth. Washington, DC: World Bank.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2009 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Funk, L., Plünnecke, A. (2009). Selected Innovation Factors: An International Comparison. In: Welfens, P., Addison, J. (eds) Innovation, Employment and Growth Policy Issues in the EU and the US. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-00631-9_8
Download citation
DOI: https://doi.org/10.1007/978-3-642-00631-9_8
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-00630-2
Online ISBN: 978-3-642-00631-9
eBook Packages: Business and EconomicsEconomics and Finance (R0)