National Competitiveness through the Europe 2020 Strategy and Human Development Index in CEE Countries. A Panel Data Analysis

Abstract In the new innovation economy, national competitiveness is an expression of the quality of the human capital and of the capacity to attract and retain the talent. In this paper, we propose to verify the link between the national competitiveness and the human capital, measured by the public expenditure on tertiary education and by the public expenditure on research and development. The research methodology uses the Panel Data method for Central and Eastern European countries by analyzing data on competitiveness scores in the Europe 2020 Report 2014, the Human Development Index 2015, the Global Competitiveness Report 2016 and those on public expenditure on tertiary education and by the public expenditure on research and development, corresponding to the period 2010-2014. The objectives of this paper are: synthesis of theoretical delimitations on competitiveness, highlighting the relationship between national competitiveness and human capital, testing this relationship for the case of Central and Eastern European countries. The results show a significant and a positive relation, indicating that investment in education and research contributes significantly to increasing the national competitiveness. The obtained results draw attention to the fact that Central and Eastern Europe countries need to initiate measures to reduce the drain-brain phenomenon and to create a favorable socio-economic context for retaining and attracting the talent.