Innovation and ICT use by firms and households in the EU: A multivariate analysis of regional disparities

The purpose of this paper is to investigate the existence of patterns that combine innovation and information and communication technologies (ICT) use, and the factors explaining them in the European Union.

The authors use data for firms and households at the regional level in the EU-27. Factorial and cluster analyses are used to the determine combined patterns for both dimensions and to elaborate a taxonomy of the European regions, respectively. Finally, the multiple discriminant analysis serves to identify the factors that characterize the patterns detected.

The results show the existence of three regional clusters that capture different combinations of patenting and ICT use. Research and development (R&D) expenditure in the business sector, government quality, gross domestic product per capita, the number of researchers, and employment by the highest level of education attained are the key variables explaining the disparities in innovation and ICT use in the European regions.

The conclusions point to the key role played by business R&D and knowledge resources within an institutional framework that facilitates actions oriented to benefiting regions through both knowledge creation and knowledge diffusion derived from the combined activities of innovation and ICT use.

The paper provides for the first time a characterization of the European regions that jointly considers innovation and ICT use. It also contributes to the literature by exploring differences in ICT use by households and firms, and the factors explaining them. The study can provide new insights into the design of public policies that may consider the common factors that explain combinations of innovation and technology use.