Innovation expenditures efficiency in Central and Eastern European Countries

The purpose of this paper is to verify if money spend on R&D are used efficiently in CEE countries. Nowadays, innovativeness is one of the most crucial factors accelerating economic growth. Increasing innovativeness is particularly important for developing countries, where policymakers are implementing various innovation strategies. The Europe 2020 strategy sets the target of 3% GDP for R&D spending. Many studies emphasize a significant effect of increasing expenditures on R&D on economic growth, but an efficiency aspect has not been covered in the literature. The article is based on critical review of the main literature of the subject and own empirical studies. The statistical data is sourced from the main international statistics. Calculations were performed using the method of DEA. DEA method allows to assess input-output efficiency. The calculations are carried out based on the program Statistica 10. and Excel spreadsheet. The paper gives a general review of the innovation level in CEE countries. The analysis shows that among CEE countries, the most innovative is Czech Republic, which is spending the most on innovation. However, hypothesis that increasing spending on innovations is not causing proportional effects has been confirmed. Main conclusion of the research is that innovation spending should be increased gradually in aim to achieve optimal results. This research may contribute to discussion on innovation policy design, and can be used by policy makers to develope national innovation strategies.