Innovation, Global Competitiveness and Human Development Index: EU Cluster Case

This study investigates the effects of innovation on global competitiveness within the framework of the EU13 and EU15 countries. Using a Pooled Driscoll and Kraay regression analysis that takes into account unit and time effects, the research illuminates the relationship between the Human Development Index (HDI), which represents Global Competitiveness, Research Expenditure, the Number of Researchers, the Number of Patents, and the Human Capital Index. The findings reveal that while the number of researchers and research expenditure lack a statistically significant effect on HDI in both groups, a significant positive correlation was found between HDI and both the number of patents and human capital. More specifically, for EU13 countries, an increase in the number of patents and human capital leads to respective increases of 0.005 and 0.04 in the HDI, while for EU15 countries, these figures stand at 0.0008 and 0.03 respectively. The study concludes that investment strategies aimed at enhancing human capital and increasing the number of patent applications can notably improve global competitiveness. For EU13 countries, in particular, greater effort in the mentioned areas is needed to narrow the gap with their EU15 counterparts. In addition, despite the indirect impact on competitiveness, it is recommended for EU13 countries to boost their R&D investments and foster technological transfer to enhance their innovation capabilities. The findings from this study underscore the pivotal role of innovation in achieving global competitiveness and suggest a need for stronger collaboration within the European Union, particularly in scientific and technological fields, to facilitate knowledge and skill exchange.