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Innovate or Stagnate: Overcoming Limited Innovation in Eastern Europe

Navigating the complexities of the global economy, Eastern European countries face an imperative: innovate or stagnate. With the region's historical focus on traditional industries and manufacturing, fostering innovation has become essential to remain competitive and sustain economic growth. This article delves into the barriers that hinder innovation in Eastern Europe and explores possible solutions to overcome them.

A key challenge to innovation in the region is the limited investment in research and development (R&D). As Aghion et al. (2017) point out, R&D spending in Eastern Europe is significantly lower than in Western European countries. This lack of investment stifles the development of new technologies and hinders the region's ability to compete globally.

Another critical factor is the lack of collaboration between academia and industry. As Veugelers (2016) demonstrates, Eastern European countries struggle to create effective partnerships between universities and businesses, preventing the translation of academic research into commercially viable products and services. Consequently, the region misses out on the economic benefits that such partnerships can bring.

Moreover, the Eastern European region faces a substantial brain drain, as talented individuals seek better opportunities abroad. According to Kahanec and Zimmermann (2016), the emigration of highly skilled workers exacerbates the innovation gap between Eastern Europe and other regions, as it weakens the local talent pool and reduces potential human capital for R&D.

To overcome these challenges, Eastern European countries must invest in R&D, foster academia-industry collaborations, and implement policies to retain and attract talent. Firstly, increasing public and private investment in R&D can generate new technologies and enhance the region's innovation capacity (Aghion et al., 2017). Secondly, by creating incentives for academia-industry partnerships, Eastern European countries can facilitate the translation of research into marketable products and services (Veugelers, 2016). Finally, implementing policies that promote a favorable environment for skilled workers and researchers can help to retain and attract talent (Kahanec & Zimmermann, 2016).

In conclusion, Eastern Europe's ability to overcome limited innovation depends on strategic investments, effective partnerships, and supportive policies. By addressing these issues, the region can enhance its competitiveness and ensure long-term economic growth.


Aghion, P., Cai, J., Dewatripont, M., Du, L., Harrison, A., & Legros, P. (2017). Industrial policy and competition. American Economic Journal: Macroeconomics, 9(4), 1-32.

Kahanec, M., & Zimmermann, K. F. (2016). Migration and Demographic Challenges in the Eastern European Region. Eastern European Economics, 54(3), 209-218.

Veugelers, R. (2016). Getting the most from public R&D spending in times of budgetary austerity: Some insights from SIMPATIC analysis. Bruegel Working Paper, (2016/1).

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