Research and Development Efficiency in Public and Private Sectors: An Empirical Analysis of EU Countries by Using DEA Methodology

Abstract

Both the fourth industrial revolution (Industry 4.0) and its embedded technology diffusion exponentially progress and grow in terms of technical change and socioeconomic impact. The aim of this study was the evaluation of research and development efficiency in the public and private sectors in EU countries. The Data Envelopment Analysis (DEA) methodology, within which the slack-based model was applied, was used to achieve this aim. The Malmquist index (MI) was used to calculate changes in research and development efficiency during 2010/2013 and 2014/2017. The results present a decrease in total Research and Development (R&D) productivity in public and private sectors for an average of EU countries (28). However, Spain, Slovenia, and Portugal (in the public sector), and Ireland and Romania (in the private sector) revealed an increase of a total R&D productivity during 2010/2013 and 2014/2017 that was primarily influenced by an increase of technical efficiency (catch-up effect). Similarly, the results confirm the differences in R&D efficiency in private and public sectors in the European countries. The study’s results also provide a valuable platform for creators of national strategic and innovative investment and educational plans, and creators of relevant policies and create a platform for national and international benchmarking indicators.