Building knowledge-based economy in the EU: methodological background and policy solutions

The purpose of this paper is to highlight some major theoretical concepts, related to the notion of the knowledge-based economy, and to analyze EU policies, aimed at strengthening R&D potential and technologies commercialization of the EU member-states. The theory of endogenous economic growth shows that human capital acquisition determines technological progress, which, in turn, stimulates the growth of a whole economy in the long run. Its practical verification illustrates the growing contribution of human capital against physical capital into the economic growth of developed economies, that has been observed since the beginning of the 20th century. The concept of intellectual capital explicitly shows that the essential elements of the improvement of the competitiveness of the organization are located inside the organization, and, to be more exact, they concern human resources of the company. The policies to set-up the knowledge-based economy in the EU are based on the complementary action of «Horizon 2020» (EU framework program for research, development and innovation) and numerous national and sub-national initiatives and tools to support research, development and innovation. Some of the supranational instruments are focused on the large-scale collaborative research and development (Public Private Partnerships, European Institute of Innovation Technologies, Public Procurement of Innovation, R&I and Innovation Actions), others are more conducive for the commercialization of the existing technologies on the local and microeconomic levels (SME Instrument, InnovFin, «The Fast Track to Innovation»). Synthesizing of national models of innovation policies gives grounds for identifying five groups of countries, based on their R&D priorities, correspondence of fundamental and applied research, the role of the private sector, as well as the structure of policy tools and mechanisms used.