The Contribution of Higher Education to Innovation Development: Long-Term and Short-Term Analysis

The relationship between higher education and innovation development is pivotal to advancing Sustainable Development Goals (SDGs), particularly in fostering quality education (SDG 4), decent work and economic growth (SDG 8), and industry, innovation, and infrastructure (SDG 9). Understanding how higher education drives innovation can inform policies to develop human capital, accelerate technological progress, and promote sustainable economic and social development. This paper aims to assess the short-term and long-term impacts of higher education indicators on innovation development in Ukraine. Using data from 2014 to 2022, the study employs a vector error correction model to analyse the relationship between innovation development and higher education indicators. Innovation development was evaluated using the Malmquist productivity index, which incorporates time-series data from the Global Innovation Index to analyse short- and long-term dynamics in resource efficiency and innovation output, with a focus on Ukraine and the Visegrad Four countries for cross-country comparison. Methodological steps include stationarity testing with the ADF test, determining optimal lag length, Johansen cointegration analysis, Granger causality testing, and estimating impulse response functions. The results demonstrate a significant long-term equilibrium relationship between innovation development and higher education indicators. STEM graduates and higher education enrolment exhibit substantial positive long-term impacts, while research capacity and intellectual property payments show significant short-term effects. The findings underscore the transformative role of higher education as a driver of sustainable economic growth and technological progress. Theoretically, the study advances understanding of how education-driven human capital fosters innovation in transition economies. Practically, it offers evidence-based recommendations for policymakers to prioritise STEM education, support research initiatives, and enhance the use of intellectual property to build a robust and sustainable innovation system.