Estonia, Slovenia and Lithuania occupy the first three places in a new Knowledge Economy (KE) Index launched by the European Bank for Reconstruction and Development (EBRD). The index measures the performance of the 38 economies where the bank invests, alongside the economies of eight frontier innovators, including the USA, Germany and Japan.
The new data on how individual countries are progressing in their development of the skills, technology and infrastructure needed to deliver innovative economies will provide important guidance to both policymakers and investors.
“This is an important initiative which will help our countries identify their strengths and weaknesses in innovation,” said Mattia Romani, EBRD managing director, economics, policy and governance. “Such an impartial analysis is a prerequisite for developing policy guidance and targeting our investment.”
“There are no one-size-fits-all policies to promote the knowledge economy,” Mr Romani added. “Rather, countries should adopt reforms that take into account the stage of their knowledge-economy development.”
Estonia, which tops the ranking, performs particularly well in the areas of institutions for innovation and ICT infrastructure. Economies with good formal and informal institutions are more likely to specialise in innovation-intensive industries, while a key pillar of any knowledge economy is information and communications technology infrastructure and its use, as this underpins effective knowledge exchange. Broadband speed and penetration have a positive impact on growth in the form of productivity gains as innovative firms increasingly require faster and more sophisticated ICT infrastructure.
Other countries performing well in the index include Latvia, Poland, Croatia, Slovakia and Hungary, all of which make the top 10. Belarus, whose government has recently taken steps to improve the innovation climate, is in 11th.
The worst performing countries in emerging Europe are Bosnia and Herzegovina (29th) and Kosovo, which is ranked 35th.