The Efficiency of CEE Countries Innovation System

Abstract

Three decades after transitioning to market economies, Central and Eastern European (CEE) countries continue to lag behind the “old” EU member states in terms of economic convergence. This persistent gap is compounded by a pronounced shortfall in innovation capacity. An innovation system that is well-coordinated, well-funded, and responsive to technological trends enables a country not only to integrate novel maritime technologies but also to contribute to their development. Without such systemic capacity, countries risk falling behind in critical sectors, including shipbuilding, port logistics, environmental compliance, and digital maritime infrastructure. This study evaluates the efficiency of public, private, and higher education sectors R&D expenditure, with a particular focus on the temporal dynamics of innovation efficiency. Using Data Envelopment Analysis (DEA), the paper assesses cross-country variations in innovation system performance, while Malmquist Index is used to detect intertemporal changes of countries productivity. The findings reveal that while the innovation gap between CEE countries and older EU members remains significant, there are encouraging signs of progress. Notably, Estonia, Slovenia, and Poland have exhibited the most substantial gains in innovation productivity. In contrast, Latvia and Slovakia have stagnated at levels similar to those of the late 1990s, and the Czech Republic, Hungary, and Lithuania have seen considerable declines. Persistent inefficiencies in public and higher education R&D systems pose ongoing challenges, although private sector investment has played a partial compensatory role in offsetting these structural weaknesses.