Survey Report on Research, Development, Innovation and Competitiveness in the Romanian Industry

Abstract

The paper is done based on a survey on 170 Romanian firms. The results of the questionnaire show that R&D intensity depends on turnover and on geographical location. However, various sector-based R&D intensities are not conclusive (except the under-performing food and beverages industry, and the over-achiever electrical machinery sector), probably because the economic transformation is still ongoing in Romania. Furthermore, the type of ownership does not influence significantly the extent of R&D activity. One possible explanation is that local market characteristics are more important than the structure of ownership.

More than half of the respondent firms have a specialized R&D department, but most of these departments operate with very few employees. On industry average, last year 81% of firms introduced new products, 61% introduced new technological processes, and 48% introduced new methods of distribution. 40% of firms increased their R&D expenses (35% as a net balance), while only a net balance of 7% increased their R&D employees.

Despite the large share of product innovators, some other figures are striking and could only be interpreted that a large share of the new products come from imports, licensing or imitation, rather than from own R&D. In this regard, 55% of product innovative firms did not increase their R&D expenses, and 40% of them do not operate a specialized R&D department, while 63% of firms which were not process innovators still acted as product innovators.

Domestic competitiveness is significantly influenced by the introduction of new distribution methods. The fact that new products or new processes failed to be statistically significant for domestic competitiveness may suggest that the nature of competition on the domestic market is altered.

Instead, foreign competitiveness of Romanian firms is not influenced by the distribution method, which is a confirmation of Romanian exporters' dependency on foreign intermediaries. Foreign competitiveness is strongly and positively correlated with the introduction of new products and with the existence of a specialized R&D department. Product innovation increases foreign competitiveness, which is a sign of the normal functioning of foreign markets.

Keywords: Research, Development, Innovation, Competitiveness, Romania

JEL Classification: D21, L6, O31, O32