The Impact of the Economic Downturn on Innovative Performance in Poland

Contemporarily, innovations play a crucial role in strengthening competitive advantage of emerging economies. Effective innovation activity provides opportunities for diminishing the innovative gap between these economies and innovation leaders. In case of Poland a relatively less severe economic downturn in comparison to other European Union countries may prove a significant accelerator of this process. On the other hand the increase of risk aversion caused by the global economic crisis of recent years leads to constraining innovative projects, especially by private investors, and this could in turn affect adversely the long-run competitive position of Polish enterprises. The paper aims at investigating the impact of the global economic downturn on the innovative performance in Poland. The analysis was conducted for the period 2006-2011, on the base of statistical data provided by Central Statistical Office of Poland and Eurostat. The impact of economic downturn on general macroeconomic characteristics and on the demand- and supply-side determinants of innovativeness in Polish economy were examined. In order to achieve the aim of the paper the analysis of the share of innovative enterprises, level of innovation expenditures and the effects of innovation activity measured by the share of revenues from sales of new or significantly improved products was conducted. Additionally, the impact of the size of enterprises on their resistance to unfavourable economic conditions during the latest global crisis was examined. The results of the analysis indicate that the uncertainty caused by the global economic crisis affected adversely the overall innovative performance of Polish enterprises. The analysis revealed simultaneous increase of R&D expenditures intensity and patent activity. As R&D expenditures in Poland are financed mainly by public funds these results imply that the innovative activity during the economic downturn may be focused increasingly on basic instead of applied research. This indicates the potential weakening of connection between the sectors of science and business. Moreover, the analysis revealed, that the larger enterprises proved relatively more resistant to economic turbulences. Furthermore, economic crisis turned out to be a factor that contributed to increase of the level of divergence between large and small or medium enterprises. The results imply therefore the necessity of creating favourable conditions for development of networks of collaboration on innovation activity. In this light the innovation policy aiming at strengthening the collaboration between science and business sectors as well as between enterprises, during the current economic downturn becomes of crucial importance.