Innovation and competitiveness: Culture as a long-term strategic instrument during the European Great Recession

The study promotes the role of culture as a long-term strategic instrument for innovation and competitiveness capacities, using data on European Union countries. The recent Great Recession (2008–2013) serves as a case study of macro conditions' broad differences. A priori, economies where effects from the Great Recession are greater should display deteriorated innovation capacity and competitiveness performance, more than in countries where effects are less severe. The empirical evidence derived by this study, however, does not support this hypothesis. Culture affects innovation and competitiveness capacities, and thus growth prospects, irrespective of prevailing macro conditions. Social learning and organizational structure exemplify culture's influence. A society that has or is developing a pro-innovation culture can perform better in the future, despite adverse macro conditions. In contrast, an anti-innovation culture hinders innovation and competitiveness, even if policymakers improve macro conditions.

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