The assessment of knowledge economy efficiency: comparing Turkey with the European Union countries

Knowledge economy is an economy that produces, distributes and uses information. Nowadays, investment in quality information rather than capital inputs is becoming more and more important for countries to develop and to be able to compete with each other. The increasing speed in the creation and spreading of knowledge has made it a crucial component in economic development. It is a fact that the countries that make large investments in information factors experience a fast and sustainable growth and are the most dynamic and competitive countries in the world. In this paper, we use context dependent DEA to measure the relative efficiency of the European Union (EU) countries', including Turkey, knowledge economy policy based on 2016 data. In addition, we implement factor-specific DEA in order to identify achievable targets in short term for each output of countries. Four outputs and three inputs were used in the analysis. The results showed that Germany is clearly ahead of other countries such as France, England, Malta and the Netherlands. Turkey, on the other hand, separates from other countries and is the least efficient one. The reason for this separation is that Turkey produces less output than expected relative to its facilities. Another conclusion of the paper is that the countries' patent applications and high-tech exports are more inefficient than other knowledge economy outputs.