Innovation policy to solve convergence challenge for the Eastern European and Balkan countries
This study is aimed to analyze the economic development processes in emerging the Balkan and Eastern European economies concerning convergency problem. It is showed that both during the transitive period and after the global economic crisis these countries failed to substantially improve their economic situation under criterion of GDP per capita in comparison with developed countries. Analysis showed that existing problem of failure in convergency policy has been forming due to the lack of the strong innovation policy. There has been an unjustified methodologic drift from the basic conceptual guidelines of the Europe 2020 Strategy to the traditional Ricardian paradigm of market competitive advantages, i.e., focusing on the existing structure of production in the country, region. Such approaches that spontaneously formed under the influence of market forces needs to be supported and strengthened through innovation. On this sense the policy of ‘smart growth’ becomes especially relevant to ensure the radical innovation structural technological changes. The other part of this strategy is a building of the innovation potential of Universities as their ability become as core part of ‘triple helix’ system. The University innovation ecosystems successfully ensure the achievement of the innovation result, i.e., the commercialization of the academic and technological achievements. The necessity of using the methodology the building smart innovation economy to overcome problems with convergency for the Balkan and Eastern European countries is actual because this approach focuses on managing future economic processes that may not exist today. This means if countries keep a focus on an innovative model of economic development, they can make a breakthrough in economic growth, regardless of the existing resource base that has developed historically. In this case such countries could overcome the negative inheritance of underdevelopment based on existing production factors and competitive advantages. It is necessary to create and develop a new resource base that will ensure the emergence of innovations. The neoclassical approach directly preserves the historical preconditions for development, when in the recommendations on the economic policy for developing countries the emphasis is on increasing the productivity or efficiency of the use of available resources. It is important to recognize the ‘Schumpeter’s innovations’ must be considered as a special factor for economic growth that generates the increasing the aggregated added value of a countries.
Schumpeter’s theory of economic development, convergency problem, innovation policy, Smart growth, middle income trap, catch-up policy, conference abstracts
Bazhal I. Innovation policy to solve convergence challenge for the Eastern European and Balkan countries / Iurii Bazhal // 13th International Conference "Economies of the Balkan and Eastern European Countries", Pafos, Cyprus, May 14-16, 2021 : online conference : book of abstracts / International Hellenic University, Department of Finance and Accounting, Kavala, Greece. - [S. l.] : Propobos publications, 2021. - P. 74-75.