Innovation activity in European Union service sector: Similarities or differences?

Abstract

Objective: The article aimed to identify and assess the degree of homogeneity and differentiation of European Union countries regarding innovation activity in individual sections of the service sector.

Research Design & Methods: I developed the research objective using three specific objectives formulated as auxiliary questions. I designed the research in three stages directly correlated with the particular objectives. The research hypothesis assumed that we might group EU countries into internally homogeneous clusters and, simultaneously, externally different in terms of innovation activity in the service sector industries. Firstly, I verified whether innovation activity is homogeneous in individual service sector industries (Levene’s test). I considered homogeneous service industries, demonstrating homogeneity in at least eight indicators. In the second step, I identified homogeneous clusters of EU countries in each service industry (cluster analysis). In the last step, I differentiated between clusters of countries (the T-student test). I used the analysis and logical construction method with its inherent analysis and synthesis.

Findings: In the scope of service sector industries, we may group EU countries into clusters that are internally homogeneous and, at the same time, externally diversified in terms of innovation activity. I identified clusters of internally homogeneous countries in four out of five analysed service sections (except for the transportation and storage industry). The highest degree of homogeneity (100%) was characteristic of innovative activity conducted by enterprises in the scientific and technical activities section. The most significant differentiation between the identified clusters of countries was the characteristic of wholesale and retail trade, as well as the repair of motor vehicles and motorcycles industry (G). Regarding innovation activity in each industry, the defined groups of countries were much more internally homogeneous than significantly differentiated. In industry G, both of the phenomena were at an almost identical level.

Implications & Recommendations: Based on the presented research results, it is possible to develop uniform tools and instruments of pro-innovation policy dedicated to countries aggregated within a specific, internally homogeneous cluster of countries. On the one hand, this policy would be universal for countries aggregated in a given cluster. On the other hand, it could contain instruments and tools specific to a given industry. Such a diversified form of pro-innovation policy would contribute, firstly, to increasing coherence in the scope of the implemented assumptions of the EU innovation policy. Secondly, it would ensure that the instruments used in its scope would be targeted and dedicated to specific groups of enterprises. Therefore, the study may constitute a set of information that policy-makers could use. Moreover, the research results and analyses constitute a source for deepening knowledge on the construction of independent strategies by individual countries as part of innovation activities carried out at the level of various service industries.

Contribution & Value Added: The study is consistent with the currently applicable scientific paradigms and strategic assumptions of the EU countries regarding the cohesion of its members, as well as development based on innovation and related activities. To characterise the issue of innovativeness, I used a methodological approach that integrates extensive tools in the field of research methods.