ABSTRACT
The economies of Central and Eastern Europe (CEE) grew rapidly at the beginning of the 21st century until the 2008 global financial crisis, which hit this region very badly, with some exceptions (e.g. Poland). Since 2008 growth has resumed, but at much lower levels, and the process of convergence that was very strong before 2008 has slowed down substantially. This raises issues about the foundations of the pre-2008 growth, as well as the basis of future long-term growth. Metrices of innovation dynamics explicitly or implicitly assume a specific understanding on how technology and innovation impacts growth. For example, a conventional policy model of technology upgrading assumes that R&D is the major source of growth. This model is the basis of the new (endogenous) growth theory. After the ‘transition recession’ during the 1990s, R&D systems in CEE started to recover during the first decade of the 21st century.
