Higher Education’s Role in Fostering Innovation. Impact of Financing on Patent Development — Case of European Union

Abstract

Innovation is a key catalyst for economic devel­opment, providing a comprehensive framework to address those many challenges that humanity is facing. Nowadays, the phrase ‘higher education’ fre­quently accompanies discussions about innovation. In this context, higher education institutions are seen as a key driver of innovative development. However, on their way to excellence, higher education institu­tions are supported by government funding, which plays an important role in supporting and encourag­ing innovation. Thus, the main objective of this paper is to analyze the impact of education spending on innovation in EU countries using the latest available data. The methodology is O.L.S. on panel data using Driscoll and Kraay’s covariance matrix estimator, whose standard error estimates are robust to distur­bances for heteroscedasticity, autocorrelated with MA(q) and cross-section dependent.

The results certify the direct link between higher education funding and the increase in the number of innovations in the context of access to information using broadband technology, supported by the em­pirical evidence provided by the importance of uni­versities as agents of economic and social develop­ment and suggesting the need to strengthen public financial allocations for R&D.