Creation of The Competitive Enviroment Concerning Research and Development In The European Union

Abstract

Globalization of Research and development (R&D) is important factmore and for long term economic growth and competitiveness, it is mainly driven by Trans National Corporations (TNCs) which tend to increase their R&D spending outside of the European Union (EU). In this report the research is focused upon the possibility of the EU to link to the globaly driven process of R&D. Impact of R&D to long term economic growth is explained by usage of New Growth Theory through Paul M. Romer's model from 1986 and empirical data from 1991 to 2001, while the explanation of how R&D impacts competitivness of the economy is conducted through the usage of Michael E. Porter. TNC's motives for investing in R&D in locations outside of home countries are explained by usage of the OLI paradigm. Afterwards the startegy of the EU for R&D, seen through The Integrated Guidelines For Growth and Jobs (2005-2008), is analized with the aim to see if the strategy corresponds to the new trends concerning R&D in the world.