Disparities of Central and Eastern European Countries of European Union in innovation potential: A multi-criteria assessment

Abstract

The primary objective of the article is to evaluate the innovation potential of Central and Eastern European Union countries. The Technique for Order of Preference by Similarity to Ideal Solution method was employed to assess and rank this potential. The research was based on 10 indicators that characterize the main areas related to innovation, namely intellectual capital (as a measure of social innovative capacity), financial capital (as a measure of the potential for financing research and development) as well as research and innovation activities. Three objective approaches were used to calculate weights of these evaluation criteria (in the TOPSIS method): Shanon–Entropy, criteria importance through intercriteria correlation and equal weights. As a evaluate of the level of innovation potential of studied CEE countries between 2013 and 2022, the determined values of the Innovation Potential Index were used to evaluate the studied countries and divide them into four groups. With the use of the two non-parametric test, the relationships of this index with selected parameters were also measured. The research results show that the innovation potential level of CEE countries is highly differentiated. Slovenia, the Czech Republic and Estonia, countries investing in R&D and social development, were found to have a high level of innovation. The remaining countries need to take more decisive action in the areas studied to improve their level of innovation. The methodology developed for the research, the conducted study, and the resulting findings offer opportunities to analyze the indicators and areas studied, and through this to implement strategies for building an innovative knowledge-based economy both by the countries in question and the EU as a whole.

Keywords

• Innovation
• Developing economy
• Central and Eastern European Union countries
• Multi-criteria evaluation