National innovation beyond linear models: An exploratory QCA of asymmetric pathways to successful and failure-bound innovation strategies of EU economies post-Covid-19

Abstract

This study examines the asymmetric pathways leading to different innovation performance outcomes in the 27 European Union (EU) member states in the years before and after Covid-19. The study offers a novel approach to innovation analysis that contrasts with traditional linear approaches. Crisp-set qualitative comparative analysis (csQCA) was used to analyze variations in innovation performance pre-Covid-19 (2019) and post-Covid-19 (2023) across the 27 EU member states. Data were sourced from the Global Innovation Index (GII), published annually by the World Intellectual Property Organization (WIPO). The analysis focused on five key dimensions: human capital and research, infrastructure, market sophistication, business sophistication, and gross domestic product (GDP). The results reveal configurations (strategies) of these conditions (dimensions) that lead to successful or failed innovation performance. Four strategies lead to success and three lead to failure, with perfect consistency (1.0) observed across all solutions. A key finding is that the decline of market sophistication is a necessary condition for failure. The study also reveals several complex causal relationships, in which similar conditions can produce opposite outcomes depending on their configurational context. The findings contribute to the innovation policy literature by highlighting the importance of developmental approaches to innovation and by challenging the assumption that singular improvements in firm sophistication necessarily lead to higher innovation performance. Moreover, the research provides interesting insights for policymakers and practitioners, particularly in the context of the new EU Competitiveness Compass and the emerging environmental, social, and governance (ESG) regulatory framework. The study offers evidence-based recommendations for designing resilient innovation strategies in post-crisis scenarios.