Public and private investments in innovation activities in Serbia

Abstract

Innovation is seen as a driving mechanism for the overall national development. It is the fundament of knowledge-based economy and a source of national competitiveness. In emerging economies, innovation is acknowledged as a process that establishes competitive advantage on the global market. Therefore, this research paper points out the importance of public and private investments in innovation activities in Serbia as a typical representative of emerging economy. The data used for evaluating the level of investments are gathered for the period from 2014 to 2021 and comprise a set of various variables such as public and private research and development (R&D) expenditures, information and communication technology (ICT) use, assessment of available ICT trainings for the employees and other. Methodological approach that is employed in the research is based on the Least Squares (LS) method of regression. The computational outcome proposes that firm investments and ICT use are entirely explained through integrated independent variables (R2=1) while public support and finance report inferior result (R2=0.630). For evaluating summary innovation index according to innovation investments, important element is investment in private sector (R2=0.476). The emphasis is on encouraging larger investments in private and public sectors.