Innovation Efficieny. A Cross-country Analysis

Innovation activities are crucial both for safeguarding or increasing competitiveness and for tackling grand challenges such as climate change. Research and development expenditures are important drivers, in turn, of innovation performance. In the past 20 years, Austria has successfully increased its R&D expenditures relative to GDP to the second position within the EU and the fifth position worldwide. At the same time, Austria has not managed to reach the top in innovation rankings and to become a leading innovation country. This report hence investigates whether Austria's innovation performance is merely measured badly, or whether Austria indeed features a lower efficiency of its innovation activities. Methodologically, data envelopment analysis is used to pinpoint Austria's efficiency scores relative to a sample of EU and OECD countries. The results show that in three areas of Austria's innovation system – science, technology and innovation – Austria has indeed potential to increase its efficiency relative to the best practice countries.