Rangarirai Mbizi Abstract When the SME competitive advantage is based on the knowledge as is the case in the knowledge economy,
innovation and creativity becomes a decisive factor in the economic activity because knowledge tends to be developed in the actual contexts.
SMES are pivotal to the growth and development of the South african economy (Butcher 1999), and inextricably linked to economic ijcrb. webs. com INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS COPY RIGHT 2013 Institute of Interdisciplinary Business Research 3 7 1 MARCH 2013 VOL 4
and integrate this sector into the mainstream of economic activities (Luiz, 2002). In Zimbabwe, although SMES are currently at the forefront of local economic development
Although entrepreneurs/SMMES may act as catalysts of activity for an entire economy (Chichoni, 2011), many of them fail.
In Zimbabwe 80%of economic activities are in hands of SMES and big enterprises only contributes the remaining 20%(SEDCO Report, 2010).
Long term survival and sustainability of SMES remains a dream in Lowly Developed Economies (LDES) like Zimbabwe.
According to Terziovski (2010) Small and Medium enterprises (SMES) in the manufacturing sector make a significant contribution to economic growth,
"In this case long time life of the organisation and its stakeholders is vital. Previous research indicates that the operations function in SMES generally has a poor relationship with other functions in the business.
The importance of innovation as a key factor of economic growth and development was highlighted also by Joseph Schumpeter in his Theory of economic development (1912) who considered the entrepreneur s task
and the extent of customer and stakeholder engagement. However, Hamel (2000) suggested different capabilities and he stated that an innovation competency requires both an internal and external organizational perspective.
A stakeholder management perspective. Strategy Management Journal 24 (5): 453-470. Cummings, B. S. 1998.
Architectural innovation, Administrative Science Quarterly 35 (1): 9 31 Heunks, F. J. 1998, Innovation, creativity and success, Small Business Economics, 10
Stakeholder influences on sustainability practices in the Canadian forest products industry. Strategic Management Journal 26 (2): 159-180.
Linking Entrepreneurship and Economic growth, Small Business Economics, August 13 (1): 27-55 World bank (2009. Innovative Firms or Innovative Owners?
and cities and towns are key drivers of the economy, contributing up to 85%of EU Gross domestic product (GDP).
Efficient urban transport is essential to the competitiveness of European cities as commercial and economic hubs in their national economies and for the EU in the global context.
Changing mobility culture Breaking the cycle of increasing urban congestion and accompanying impacts on economy, society and the environment requires a change in mindset by both decision makers and transport users.
A key element of the programme is the exchange of knowledge and results in‘demonstration'cities with stakeholders in other urban areas in Europe.
In addition, participatory processes engaging stakeholders help to bridge the gap between research and market take-up.
key stakeholders and citizens by including dissemination of results and best practices in research programmes,
The Partnership's stakeholders define joint targets for 2020 and more specific operational objectives, they analyse barriers,
For more information, the Smart Cities and Communities Stakeholder Platform is available at: www. eu-smartcities. eu.*Smart city solutions could include:
Furthermore, early participation of stakeholders in local decision-making contributes to wider acceptance of new mobility measures.
Various research initiatives have developed innovative ways to establish coordinated dialogue between policy makers, stakeholders and civil society.
and tested based on in depth analysis of bus stakeholder needs. As a result, the EBSF vision has been formulated for the bus system for the future to respond to passenger needs, social and environmental requirements,
Bringing together 47 stakeholders in the bus sector, the European Bus System of the Future (EBSF) project launched a bus renaissance.
Further steps More than 100 bus stakeholders contributed to the EBSF Roadmap, which identifies key areas and priorities for research on bus systems.
providing a selfassessment tool to support stakeholders in assessing the strengths and weaknesses in the transport system,
In addition, mobility management strategies to influence citizens'behaviour and to improve stakeholder participation in the decisionmaking process have been implemented with the EU support.
structural changes in our economy, the broadening of decisionmaking processes and the emergence of the network society,
Entrepreneurs, able to draw on unprecedented scale economies, built vast empires. Great fortunes were made. The government demanded that these powerful new monopolists be held accountable under antitrust law.
Yet, somehow, the basic laws of economics asserted themselves. Those who mastered these laws survived in the new environment.
A Strategic Guide to the Network Economy'1. One of the main themes discussed in this book is that
since its first appearance on the Internet. 862 R. Smits/Technological Forecasting & Social Change 69 (2002) 861 883 Although by no means all economists agree with Shapiro and Hall,
This phenomenon is known among economists and innovation scientists as the‘Solow Paradox'or the‘Productivity Puzzle'6. In the European context,
Knowledge-intensive products and services are taking on an increasingly significant role in the economy.
Illustrative of the increasing knowledge content of our economy is the observation that the weight of 1 dollar in American export has been cut by half over the past 10 years.
and have confronted innovation studies with new questions. 3. 2. Structural changes in our economic system Important sectors of our economic system are currently going through a period of structural transition.
In its Central Economic Plan, The netherlands Central Planning Office points out that while the ICT sector makes up only 5%of the Dutch economy
it is still responsible for 25%of our economic growth 16. The enormous changes and issues this trend can bring about can be illustrated by the emergence of
Roads and Challenges'potentially important role of‘Cultural Industry'in our economic system was pointed out 7. When accepting his professorship in‘Cultural Industry'at the Erasmus University, Rotterdam,
C a recent and rather heated discussion focuses on the existence or nonexistence of the‘New Economy'.
it would seem that economists are still unable to make up their minds about this. Sustainability is another major issue in today's economy.
Major questions here: are economic performance and sustainability at right angles? And what could be the role of ICT, 868 R. Smits/Technological Forecasting & Social Change 69 (2002) 861 883 life sciences, materials technology, not to mention nanotechnology, in the development of a more sustainable economic system?
With regard to the last question, expectations are rather high, but very little empirical proof has been available until now to support these expectations.
Other laws apply in this‘network society'or‘knowledge economy'than in the hierarchical variant. More and more often do we see the main goal being the optimisation of chains or systems of organisations, rather than a maximisation of the performance of components (e g.,
what they are able to do for the economy and the society of the future. As a follow-up to the above, there is the demand for management of the knowledge infrastructure.
Disciplines such as economics, public policy analysis and business administration are confronted with a lack of insight into the dynamics of innovation processes and systems 4 In his contribution to the collection of texts by Barre'et al.
Freeman's proposition is that the success of The british in this period should not be attributed primarily to the strength of the system components (politics, economy, science and technology, culture) but rather to the cunning way in
The exceptionally lengthy period of high economic growth in the last decade of the 20th century in the USA
without it till very recently being coupled to rising inflation and unemployment, gives rise to some economists assuming that structural changes in
which knowledge plays an important role are under way in our economy. Not only as a production factor,
but also as a product and a service. One notable feature of knowledge is that knowledge is easier to copy than tangible products.
'which even today is the main variable in mainstream economics. The fact that the products of network technologies, such as faxes and PCS, become all the more in demand the greater their market penetration
brings up for discussion another basic rule of economics that prices fall if supplies increase.
Of note is that, within the community of established economists, these stories are dismissed generally as‘old ideas parading as new ones,
'The discussion among economists on this subject is apparently as we read every day in the newspapers still in the early stages 1, 51 54.
finally, business administration experts and organisational sociologists discuss the question of how to interpret the far more open business strategies demanded by the network economy in their models 58,59.
Insight into the potential of new technologies for the economy and society, the appreciation thereof by several different parties
which Box 3 Major trends Structural changes in the economy:.within sectors (agriculture. between sectors (from agriculture to industry to services.
Techniek in Nederland in de twintigste eeuw (Technology in The netherlands in the Twentieth Century), Stichting Historie der Techniek, Walburg Pers, 1998.6 OECD, Technology and the economy.
The key relationships, Report of the Technology and Economy Programme, OECD, Paris, 1992.7 European commission, Growth, Competitive Strength, Employment.
Innovations Systems in the Services Economy: Measurement and Case study Analysis, Kluwer Academic Publishing, Norwell, MA, 1999, pp. 85 103.21 R. Smits, A. Leyten, P. den Hertog, Technology assessment
, Technical Change and Economic theory, Pinter, London, 1988.46 R. Nelson, S. Winter, In search of a useful theory of innovation, Res.
of a New Discipline), address at the opening of the academic year, Utrecht University, 1999.52 K. Kelly, New Rules for the New Economy, Viking Books US/Forth Estate, UK, 1998.53 H. J. Brouwer,
This paper is based on his inaugural address and on the presentation‘Impacts from Trends in Economy and Society'during the Workshop‘Innovation Policies for a New Era',Six Countries Program/Royal Swedish Academy of Engineering sciences
Therefore, firms need to achieve economies through specialisation (Demsetz, 1991. This may explains why firms usually prefer to concentrate their resources toward core activities.
The Economics of Hope. Pinter Publishers, London. Fusfeld, H. I.,1986. The Technical Enterprise. Ballinger Publishing, Cambridge, MA.
Small Business Economics 1, 215 222. Kleinknecht, A.,Reijnen, J. O. N.,1992. Why do firms cooperate on R&d?
Economies et Sociétés 27 (5), 153 195. Lhuillery, S.,Templé, P.,1995. L'impact du C i. R. sur l'innovation dans les entreprises.
Technical Change and Economic theory. Pinter Publishers, London, pp. 349 369. Lundvall, B-A.,1993. Explaining inter-firm co-operation and innovation.
Dosi, G. Ed.),Technical Change and Economic theory. Pinter Publishers, London, pp. 370 398. Perrin, J.-C.,1991.
Economics of Innovation and New Technology 8, 79 103. Roper, S.,1998. Under-reporting of R&d in small firms:
Small Business Economics 12,131 135. Rosenfeld, S. A.,1996. Does co-operation enhance competitiveness? Assessing the impacts of inter-firm collaboration.
Economies et Sociétés 29 (9), 99 118. SESSI, 1996. L'innovation technologique dans l'industrie.
Economies of scope and the scope of the enterprise. Journal of Economic Behaviour and Organisation 1, 223 247.
Transaction cost economics. In: Schmalensee, R.,Willig, R. Eds. Handbook of Industrial Organisation. North Holland, Amsterdam, pp. 135 182.
International Journal of Economics and Management Engineering (IJEME) Oct. 2013, Vol. 3 Iss. 5, PP. 176-181-176-Innovation, Performance and Growth Intentions
LITERATURE REVIEW A. SMES Interest in SMES is concerned primarily with their role in stimulating economic growth 3. However
International Journal of Economics and Management Engineering (IJEME) Oct. 2013, Vol. 3 Iss. 5, PP. 176-181-177-Innovation has been discussed as the development of a new product,
Journal of Economics and Management Engineering (IJEME) Oct. 2013, Vol. 3 Iss. 5, PP. 176-181-178-factor in firm growth.
or makes a significant contribution to the US economy through payment of taxes or use of American products,
C. Growth Intentions International Journal of Economics and Management Engineering (IJEME) Oct. 2013, Vol. 3 Iss. 5, PP. 176-181-179-Innovation
The US sample International Journal of Economics and Management Engineering (IJEME) Oct. 2013, Vol. 3 Iss. 5, PP. 176-181-180-shows a beta
in order to impact society has significant implications for SME owners/managers, SME employees and the economies in
The SME sector is an important contributor to both the US and global economies. SME activity makes a significant contribution to economic and social wellbeing as often new,
play an important role in innovation and provide alternative employment opportunities for many subsets of the adult population 2. Innovation in small firms is essential for the continued dynamism of modern economies (Klapper
Economies of most nations are composed largely of small-and medium-sized enterprises (SMES) and their ability to innovate has been viewed as a critical element in economic growth and renewal (Wolff & Pett, 2006;
Verhees & Meulenberg, 2004. This has led many nations to policy-making that supports innovation in SMES (Jones & Tilley, 2003.
International Journal of Economics and Management Engineering (IJEME) Oct. 2013, Vol. 3 Iss. 5, PP. 176-181-181-2 Autio, E. 2005.
Partnered ECO-EFFICIENCY ANALYSIS at BASF Two key questions for industry are How can economy
On the economy axis, the product is compared with alternative products in terms of overall costs, including material and energy flows.
"&#%(30 Project timeline 1998 September Stakeholder Dialogue: Innovation Brussels (STM) 1999 March-September Regional Dialogues Taiwan, Philippines, Taiwan, Brazil, Argentina (STM) March-November Biotechnology Scenario Project August
A Corporate Survey published September Innovation and Sustainable Business workshop November Innovation and Technology Project launched at WBCSD Council Meeting Berlin December Stakeholder Dialogue:
Boston November Meeting on Information technology Implications Stuttgart 2001 February Meeting on Information technology Geneva March Working group meeting Montreux May Stakeholder Dialogue:
Intellectual Property rights Montreux July Assurance Team Meeting Geneva July 2001-February 2002 Electronic Stakeholder Dialogue:
Intellectual Property rights September Working group Meeting Kuala lumpur November Assurance Team Meeting Jongny sur Vevey Switzerland 2002 February Stakeholder Dialogue Meeting on Intellectual
and technology as well as stakeholder views of these practices. In addition, the scenarios developed by the WBCSD for global development,
Appendices 31 IPR stakeholder dialogue UNDERLYING QUESTIONS What are the proper rules of access to genetic resources
influential in the area community, organization Who speaks for future generations Who/which group is underrepresented Appendices Identifying stakeholders A GUIDING MATRIX G#86>$eanq#"XXN("#$"(#5ff#"#FF"F#FF#:@
development via the three pillars of economic growth, ecological balance and social progress. Our members are drawn from more than 30 countries and 20 major industrial sectors.
Section 2 describes innovation theory and zooms in on home accessories in emerging economies. Section 3 offers a background to the (evolution of the) sector and firms.
business, economics and innovation systems. The first focuses on innovation processes within firms, the second studies the role played by innovation in social and economic change,
However, many clusters in emerging economies are driven poverty, with limited innovation potential (Knorringa and Meyer-Stamer 1998.
Innovation in home accessories in emerging economies As this study zooms in on innovation in home accessories in an emerging economy,
A second specificity is that most knowledge in emerging economies is derived still from global value chains (Mani and Romijn 2004.
A third specificity is that most local innovation systems in emerging economies are immature and most contexts are not yet up to par.
A fourth and last specificity is that the absorptive capacity of firms in emerging economies increases rapidly
and global value chains enable exporting firms in emerging economies to innovate and 2007, Chen et al 2011).
The most appropriate indicators were selected based on recent studies in emerging economies (Altenburg 2008, Fu et al 2011.
As these are likely to be incomplete in emerging economies, they impact on innovation (Lundvall 2007).
This was rectified partly by increased demand in emerging economies, including Indonesia itself, but still the main issue for many firms became how to survive (resp.#
It confirms that variation in absorptive capacity of firms in emerging economies explains variations in innovation levels. 12 11 Linear regression analysis of absorptive capacity and innovation level (dependent variable:
and somewhat more dynamic clusters in emerging economies (see for an overview Knorringa and Meyer-Stamer 1998).
In the context of an emerging economy, where variation in absorptive capacity of firms is large,
Penetrating the``knowledge filter''in regional economies. The Annals of Regional Science 39 (3): 439-56.
Knowledge creation, entrepreneurship, and economic growth: A historical review. Industrial and Corporate Change. Chaminade, C, . and J. Vang. 2008.
and the knowledge economy. Industrial and Corporate Change 10 (4)(-12-01): 945-74. Cooke, P. 2005.
Economics of Innovation and New Technology 11 (6): 497-523. EU 2008. Science, technology and innovation in Europe.
The role of foreign technology and indigenous innovation in the emerging economies: Technological change and catching-up.
International trade and industrial upgrading in the apparel commodity chain. Journal of International Economics 48 (1)(-06-01): 37-70.
Gereffi, G. 2005. The governance of global value chains. Review of International Political economy: RIPE 12 (1)(-02-01): 78-104.
the embeddedness of innovation in a regional economy. Review of International Political economy 7 (4): 688-718.
The challenge of measuring innovation in emerging economies'firms: A proposal of a new set of indicators on innovation.
Why new institutional economics matters for economic geography. Journal of Economic geography 9 (3): 329. Shima, K.,Onishi,
The Developing Economies 48 (4): 450-72. Tambunan, T."The Impact of the 2008-2009 Global Economic crisis on a Developing Countrry's Economy:
Studies from Indonesia"(Unpublished paper, No date. Tambunan, T. 2006. Development of small-and medium-scale industry clusters in indonesia.
Creative economy report 2010. Geneva: UNCTAF. UNCTAD. 2008. Creative economy report 2008. Geneva: UNCTAF. UNIDO 1998.
Cluster diagnosis and action plan. Yogyakarta area. Leather goods cluster. UNIDO. USAID 2006. Global market assessment for handicrafts, Washington:
SME export performance in indonesia after the crisis. Small Business Economics 26:25-37. Wie, T. K..2006.
Manufacturing in the new urban economy. London: Routledge. World bank, and IFC. 2012. Doing business subnational. doing business in indonesia.
and ensures that transport can continue to deliver its core role for a thriving European economy in a user-oriented, safe and environmentally-friendly way.
and take into account the advice of all stakeholders considering the existing standards when appropriate and conducting an impact assessment with cost benefit analysis. Assisting bodies The Commission will be assisted by two bodies in the implementation of the ITS Directive:
Meanwhile, the ITS Advisory Group bringing together representatives of stakeholders such as industry, service-providers and associations of users supports the Commission on the technical and business aspects of ITS deployment.
The action plan was adopted after much preparatory work and a long consultation with stakeholders. Its main focus is to ensure the compatibility and interoperability of systems,
the EU Member States, infrastructure-and service-providers and other stakeholders. Grouped into six priority action areas (see pages 6 and 7 for an overview),
The plan is implemented also in close cooperation with ITS stakeholders, as seen for example in the staging of various workshops on action plan topics.
and stakeholders and will consider policy options for implementing measures including legal and/or nonlegal instruments.>>
and different stakeholders and promote best practices in deployment and operation of ITS services>TASKS AND ACHIEVEMENTS A study was initiated by the European commission examining key issues
and communication technologies>improve interoperability of computer applications used by different stakeholders>develop a standard framework for freight information exchange covering all transport modes
and all stakeholders>TASKS AND ACHIEVEMENTS The relevant European commission services have ensured close coordination of the‘e-Freight'(see box) and other research projects (Discwise, Euridice, Freightwise, Integrity, Rising, Smart-CM,
a consultation of professional stakeholders and the EU Member States was carried out in the period December 2010 to February 2011.
Moreover, important communication standards between the various EETS stakeholders were adopted. Implementation of the interoperability of electronic road toll systems (Directive 2004/52/EC) Electronic road tolling>A c T I O N 2. 4>AC T ION
availability of common European standards and the willingness of most stakeholders the‘ecall'in-vehicle emergency call system is yet to be deployed widely in Europe.
Further measures are needed to encourage concerted action by all stakeholders including vehicle and equipment manufacturers,
as the coordination body bringing together representatives of the relevant stakeholder associations and of national platforms, meets at regular intervals to discuss technical details and practicalities.
to be complemented by a stakeholder consultation. More in depth research about safety impacts possible countermeasures and safe human machine interfaces was planned also.
V2i and V2v communications for cooperative systems>promote the use of standardised specifications among stakeholders>TASKS AND ACHIEVEMENTS For I2i,
It also allows stakeholders to concentrate their energy where it really matters the efficient invention and production of goods and services.>
or traffic interfaces between the relevant traffic information/control centres and different stakeholders>define a standardisation process for the adoption of an open in-vehicle platform architecture>pursue European standardisation activities for cooperative systems>TASKS
and the fact that responsibilities are spread among many different stakeholders can make coordination and consensus difficult to achieve.
>facilitate practical dialogue between public and private stakeholders>promote the use of ITS in urban areas
It underpins employment, economic growth and global exports, while providing citizens with resources and mobility that are essential to the quality of life.
and expertise of European multi-sector stakeholders involved in providing ITS), no‘umbrella'structure for the advance from research to realisation in the field of ITS has yet been established.
'A strong impetus to progress was given by establishment of the esafety Forum early in 2003, following consultation between the Commission, ERTICO ITS Europe, industry and public-sector stakeholders.
In conventional petrol-or diesel-powered vehicles, electronics improves fuel economy by managing the fuel injection,
China, India, Russia and South-Africa by establishing a collaboration network that brings together key stakeholders in the fields of ITS, urban mobility and road infrastructures development.
'This is why we are opening our research funding to emerging economies. Supporting interesting and innovative research projects in the field of transport is a great way to start.
and will have positive knock-on effects that will benefit the world economy.''New instruments Three such projects have been launched under FP7, taking advantage of the SICA (Specific International Cooperation Actions) mechanism,
the introduction of new solutions and the creation of new markets this is key to the growth of business and also that of the national economy.
and large corporations to research and innovation are essential within almost all sectors of the economy.
and prosper only if there is the ongoing flow of new knowledge into the economy. Effectively, there are two main approaches to fostering economic growth
and enhancing prosperity: increasing resources such as capital and labour; and using resources in more efficient ways, for example through technological development.
which contribute to fostering economic growth in more significant and permanent ways than simply increasing resources.
Dr. Zoltán Cséfalvay Minister of state for Parliamentary and Strategic Affairs Ministry for National Economy essential, especially when it comes to transforming those inventions
All stakeholders are needed in the production and and commercialisation of knowledge, including Hungarian small and mediumsized enterprises,
Dr. Zoltán Cséfalvay Minister of state for Parliamentary and Strategic Affairs Ministry for National Economy government to bet on the future,
And yet, the overall competitiveness of a country and its ability to catch up with the best performing economies is often significantly more dependent on the widespread distribution of existing technologies.
and spread information technologies have also been able to achieve rapid economic growth. Consequently, the research & development & innovation strategy does
in spite of the world economic crisis, most of the developed countries in the European union, as well as the EU itself, are endeavouring to increase ther&d support2.
there is only 4 examples that the fall in R&d expenditure was pronounced even more than the economic downturn. 3 Nevertheless,
internationalized economic activities so the impacts on the national innovation systems and global innovation systems are constantly changing.
During the last decade competition in the world economy has become more fierce, and not just between economic blocks and countries,
In this case it is a competitive disadvantage that access to knowledge is limited territorially more than in the economies of the United states or Asia.
At the same time the planned decrease in the volume of university courses in economic-,legal-and social sciences may influence the innovation absorption capacity of the economy.
Foreign direct investment which is integrated with the local economy and based on R&d is also relatively scarce.
The elaboration of the reading related to the regional specializations and the so-called smart specialization strategies11 is planned by the government in consultation with local stakeholders during 2013.
This is partly why the efficiency of R&d fund-16 1 overview of the situation 12 Török (2006) also draws attention to the fact that Hungarian RDI tries to play a strategic role in the national economy without a strategy.
this includes foreign working capital financing, advances in the structure of the economy, participation in global processes even amid economic-financial turbulence.
and economic growth based on RDI cannot be expected without it. The stability of public funding of R&d:
direction to advance the development of a knowledge-driven economy. Greece (2007) Chile (2008) Mexico (2007) 0, 50%0, 45%0, 40%0, 35%0, 30%0, 25%0, 20
The deepening of the global financial and economic crisis. The lack of needs and interests of economy
and society towards R&d will still prevail. Brain drain, which is weakening public research. There will not be enough professionals with appropriate qualification
No (or not enough) FDI based on RDI will be integrated adequately into the Hungarian economy. There will not be strengthened (enough) enterprises on the basis of national RDI.
the knowledge bases (all the knowledge bases of the universities and the Academy, the private sector and the nonprofit and community sectors) form the basis of the national innovation system, social and economic actors in the knowledge economy,
and sufficiently integrated into the economy Few market-driven development, the demand is tight: the big players compete with each other The shortcomings in KNOWLEDGE FLOW technology transfer
and the weaknesses of evidence-based decision-making processes) Gloomy macroeconomic prospects of the world economy and Hungary (
The RDI strategy provides the national frameworks and the research and development and innovation objectives of the economy and society.
and policy tries to reconcile many stakeholders at the same time. The result is: stagnating international competitiveness. The trends since the change of the regime prevail,
however, the whole of the economy and the society does not gain from the yields of innovation 25 Identification of the problem
Mohnen 2009 The 17 most developed OECD countries 0. 1%increase in BERD can cause a 0. 3 0. 4%increase in the output of the national economy Bassanini Scarpetta
Finally the sustainable knowledge economy means such a knowledge-driven organizational system of economic processes that is sustainable from an environmental
The expansion of the‘green'economy plays an essential role regarding environmental sustainability longside economic growth.
and thus contribute significantly to enhancing the competitiveness of the Hungarian economy together with transforming it to a sustainable knowledge economy. 15 The policy considers it important that the companies with a Hungarian ownership background should get stronger
and the knowledge-driven economy and society can not be sustained without ensuring the framework conditions of basic research21.
increase the added value of the economy more intensively than the average, resulting in an increasing number of well-paid workplaces.
and economic activity of R&d and growth-oriented small enterprises (gazelles) will significantly grow by providing particular and dynamic incentives to them.
Thus the investment pays off and the added value of this sector grows significantly faster than average in the national economy.
The dual nature of economy weakens and the added value and the number of wellpaying jobs grow.
the (follower or adaptive) developments and innovations of mediumsized enterprises are required also for enhancing the competitiveness of the economy.
The research centres of international companies bring advanced knowledge to the national economy and also have an incentive effect on the national knowledge base.
Since public services are labour-intensive and their productivity growth slower than that of processing industries30, the focused innovative development of the public sector results in economic growth and welfare effects.
thus contributing to the general improvement of society and economy. But an overall and really fundamental improvement in performance can only take place
and takes into account not only the market failures of the mainstream economics 41 vision and objectives 3 and priorities of the RDI strategy by the partner networks of regional stakeholders and local professionals.
coordinated programme based on regions and RDI specialization organizing many partners and innovation stakeholders. The basis of regional policy is formed by the industry and service sectors
which are competitive at an international level, embedded into the regional economic system and the diversified spatial structure.
and in the newly strengthened areas of Hungary are clearly positive (due to the effects of economy of scale) in relation to the process dynamics of growth based on R&d,
the specific dynamics of the key sectors of the national innovation system (health sector, food and energy economies) as well as the national integrated level itself. such methods of task definition which ensure not only the allocation
and encouraging the co-operation between the stakeholders of the settlement and the members of the local community.
Efficient networked economy Globally competitive research centres+30 larger labs in the world elite A3.
invigorating the economy on the basis of RDI Figure 18 C8. Fast diffusion of adaptive innovations based mostly on ICT C9.
which make a return on investment at the level of the national economy, and are perfectly in line with the given phase of the life cycle (see Figure 21).
in order to tackle the problem of the dual economy (see Table 11). 4. 4. Instruments supporting the invigoration of public sector innovation The elaboration of separate RDI strategies
but can also fundamentally contribute to the strengthening performance of the Hungary economy by improving the health status of the population
Shareholder options to motivate outstanding innovation performance Voucher scheme Support to ICT-based adaptive innovations 48 4 The main instruments of implementing the strategy 4. 5. Review
Public funding of business R&d and its importance in the national economy Figure 22 00,5 1, 0 1, 5 2, 0 2, 5 3, 0 3
and also accept that the current funding structure can be regarded as stable in the long term then the improving R&d performance of the national economy can be ensured by increasing the business funding to around HUF 350 billion (from appr.
Based on international practice, this task is supported by an advisory body consisting of high-level independent professionals The governmental RDI strategy management tasks are managed by the ministry responsible for the economy.
In the area of economic policy: the implementation of the RDI strategy assumes a predictable business environment,
tax-side incentives and direct support such that ensuring the implementation framework is established through fiscal policy In the area of science policy:
the RDI strategy can be interpreted on the area marked with deep blue Economic policy Science policy monitoring,
The driving forces of economic growth: panel data evidence for the OECD countries. OECD Economic Studies No. 33,2001/II. http://www. oecd. org/economy/productivityandlongtermgrowth/18450995. pdf Baumol, William (2005:
Education for Innovation: Entrepreneurial Breakthroughs Versus Corporate Incremental Improvements. In: Adam B. Jaffe, Joshlerner and Scott Stern (eds..
Innovation Policy and the Economy. MIT Press, Cambridge, MA, pp. 33-56. Baumol, William, Litan Robert and Schramm Carl (2007:
and the Economics of Growth and Prosperity. Yale university Press. Borsi, B. Viszt, E. 2010: A kreatív és kulturális ágazatok (CCI) szerepe és növekedési lehetoségei a Budapest Metropolisz Régió gazdaságában the role and growth opportunities of Creative and Cultural Industries (CCI
) in the economy of the Budapest Metropolis Region scientific report, December 2010 GKI Gazdaságkutató Zrt.
How important is business R&d for economic growth and should the government subsidise it? The Institute for Fiscal Studies, 2000 http://www. ifs. org. uk/bns/bn12. pdf Guy, K and C. Nauwelaers (2003), Benchmarking STI Policies in Europe:
az innovációs rendszerek szinergiáinak térbelisége Measuring the knowledge based organization of the Hungarian economy: the spatiality of the synergies in the innovation systems Közgazdasági Szemle The Economic Review 55 León, L. R.,Simmonds, P. és Roman, L. 2012:
which the companies take account of the interests of society by having regard to effect of their activities on their business partners, suppliers, employees, shareholders and also the environment.
Dual economy: the co-existence of well capitalised, relatively modern, competitive, mainly foreign owned enterprises and Hungarian owned enterprises suffering from low competitiveness and a lack of capital.
The growth potential of national economy providing two-thirds of the employment is weak, it is not capable of technological development by itself,
which connects the economy, society and culture of every country in the world through real or virtual networks together.
to facilitate the knowledge-based European economy and enhance the competitiveness of the EU and its member states by strengthening their innovation capacities.
It takes into account the different innovation capacities of the regional economies. IUS (Innovation Union Scoreboard:
Its aim is the competitiveness enhancement and professional and business development of a certain area of the national economy.
diffusion of the accumulated knowledge in the institutional and corporate network and in the broader economy for the purpose of maximum utilization.
Operational Programme for Developing the Economy and Innovation FTE: Full-time-Equivalent IP: Intellectual Property R&d:
Ministry for National Economy NFM: Ministry of National Development OTKA: Hungarian Scientific research Fund OFTK: National Concept for Development and National Concept for Regional Development PCP:
System-dynamical approach 28 ábra National level Human resources human and social capital Science system research capacity The development of the economy and the markets absorption capacity
The project of national economic importance can have an invigorating effect on the economy through innovation
and significantly influencing the national and international knowledge flow can be started in the fields representing the strengths and important challenges of the Hungarian society and economy.
Objectives related to knowledge bases until 2020 GERD/GDP ratio Macroeconomic indicator based on international statistical standards The numerator is the own research and development expenditure aggregated at the level of the national economy
aggregated at the level of the national economy (Business Expenditure on Research and development, BERD) the denominator is the gross domestic product (Gross domestic product,
and concentrating a critical mass of knowledge effects of the economic crisis, a proposal had been made for the STI programme of measures for 2009-2010,
and economy at its meeting on 17 february 2010 to evaluate the 2007-2008 tasks of the STI programme of measures
Ministry for National Development and Economy-National Office for Research and Technology 27 tasks; Ministry of Education and Culture 20 tasks;
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