Patterns of organisational innovation: comparison of western and eastern countries in Europe

Abstract

West European (WE) countries perform better in innovation than their counterparts in Central and Eastern Europe (CEE). In this paper organisational innovation (OI) patterns in CEE compared to WE are studied. The paper exploits the Community Innovation Survey 2008, 2010 and 2012 and uses this firm-level innovation data from 12 countries. The authors introduce a novel approach, which elucidates seven types of OI patterns based on an intensity of firms’ engagement in OI. According to this notation most companies in WE were found to be complex internal innovators or complex innovators. In CEE, the largest share of companies in this period were exclusively work management-oriented. This picture remains the same throughout the three waves of the survey. The differences in OI can largely be explained through the differences in the background variables of the companies or through other innovation types, so if CEE and WE companies converge in these terms, much of the difference in OI also disappears. Nevertheless, there is also a part of the divergence which can be related to the societal level through path dependent developments in these countries.

Keywords:

• organisational innovation
• types of organisational innovation
• complementarity of types of innovation
• decomposition
• Europe
• Western Europe vs Central and Eastern Europe
• community innovation survey (CIS)

Notes

1. EU members with Soviet background have reached on average only 69% of EU-28 GDP per capita in PPS in 2015 (Eurostat series tec00114).

2. “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation” – Peter F. Drucker; “Never before in history has innovation offered promise of so much to so many in so short a time” – Bill Gates; “Innovation distinguishes between a leader and a follower” – Steve Jobs.

3. The authors acknowledge that the sample of high-income countries is rather small and heterogeneous. Unfortunately, due to confidentiality restrictions the data is not available for larger number of Wester European countries. However, the high heterogeneity is almost as valid in CEE than in WE. There were almost two times difference in GDP per capita in PPS between the richest and the poorest country in CEE (82% of EU28 in Slovenia in 2012 vs 46% in Bulgaria) and in WE (186% of EU28 in Norway in 2012 vs 75% in Portugal) (Source Eurostat series tec00114). Regarding the OI, the sample used in this study covers countries slightly less innovative than on average in the EU, but the difference is only minimal in WE (28.1% in the sample vs 31.4% in 17 EU members plus Norway) and CEE (12.3 vs 13.4%) (Source Eurostat series inn_cis9_type).

4. Please see the Eurostat website for more information about the CIS data: http://ec.europa.eu/eurostat/web/microdata/community-innovation-survey.

Additional information

Funding

This study was supported by the Estonian Science Foundation [grant number IUT20-49] and the EC Seventh Framework Programme [grant agreement 266834].