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Oracle Press Release
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Central and Eastern Europe Must Boost Home-Grown Innovation, Says Oracle-Sponsored Economist Intelligence Unit Study
Major new survey of 12 countries reveals that CEE is underperforming in terms of innovation; risks compromising five years of economic growth as its status as a low-cost labour base begins to erode
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GENEVA, SWITZERLAND 9-JUL-2008
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According to a new Economist Intelligence Unit (EIU) survey commissioned by Oracle and published today, the economies of Central and Eastern European (CEE) countries are at risk of weakening in the next five years due to low levels of home-grown innovation.
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The survey, entitled A Time for New Ideas: Innovation in Central Eastern Europe, examines current and future innovation performance and the overall ‘innovation environment’ in 12 countries: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia and Ukraine.
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The main findings are as follows:
- Innovation – including the development and commercialisation of new products, services, business models and management techniques – is vital to the continued economic success of the CEE area as its status as a low-cost labour base begins to erode.
- While the area has benefited economically from innovation over the past five years from foreign multinational companies (MNCs) setting up operations in the region, there have been insufficient MNC ‘spillovers’ of technology and know-how, meaning that these innovations have largely failed to permeate the domestic business environment.
- Measured against the EIU’s proprietary innovation model, Slovenia shows the highest levels of innovation performance in the region, while the Czech Republic offers the most favourable environment for innovation.
- Romania currently shows the least favourable performance, while the most challenging environment is to be found in Ukraine.
- The region possesses many talented home-grown entrepreneurs and innovative companies that are being held back due to less than optimum innovation environments. Several of these companies are profiled in the study.
- Governments, businesses and academia can work together to improve the environment for innovation in their respective countries. The report offers specific recommendations including investing in skills, research and IT infrastructure, and relaxing bureaucracy, taxation and labour laws.
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The full EIU report, A Time for New Ideas: Innovation in Central Eastern Europe, is available at the EIU website.
Supporting Quotes
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Alfonso Di Ianni, Senior Vice President, Oracle Eastern Europe and CIS Region.
"The advantage of low-cost labour, initially a short-term catalyst for economic growth in the region, is being eroded and must be replaced with a more sustainable and long-term strategy for success. A structured approach to fostering innovation is what differentiates the successful economies, and collectively governments, educational institutions and businesses can create a dynamic environment which allows the untapped wealth of domestic talent to flourish. Information Technology today forms the foundation for a high percentage of the world’s most innovative solutions and can have a transformational effect on economic development – ideas, innovation and IT, an unbeatable combination."
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Paul Lewis, Managing Editor, Executive Briefing, Economist Intelligence Unit.
"The post-communist economic transition of the CEE countries has been remarkable, but it has relied on investment from foreign companies. Governments need to be aware that it is no longer enough to imitate and assimilate innovation from abroad – they must encourage a favourable environment for home-grown innovation, or the long-term growth potential of the region will suffer."
Supporting Resources
Notes to editors
About the survey:
A Time for New Ideas is an Economist Intelligence Unit report that looks at the current state and future prospects of innovation in Central Eastern Europe (CEE). The report is based on three main components: a worldwide survey of 370 executives carried out in Spring 2008; the Economist Intelligence Unit’s own innovation model; and 20 in-depth interviews with C-level executives, consultants and other experts in the field. Over half of the executives surveyed are based in the CEE; all operate significant business in the region; two-fifths have annual global revenues below $100m and 16% over $10bn; over half are either C-suite executives or board members and over one-quarter are CEOs or managing directors, in all representing 19 different countries.
About Oracle
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About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of about 650 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.
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