The limitations of national innovation systems in transition economies. Evidence from Albania

Abstract: Albania is an eastern European and post-socialist country which has shown interesting patterns in terms of economic growth and innovative activity. At the beginning of the 90s, the country shifted from a centrally controlled and isolated economy to an open market economy. The GDP growth in Albania, prior to the 2008 financial crisis was one of the highest in Europe at 6 percent and during the past decade, the country has reached to maintain economic stability despite the global crisis. However, Albania has shown very little progress in science, research and innovative activity during the past 2 decades of capitalism. Thus, this study seeks to discover what constrains the development of the Albanian national innovation system (NIS) by analyzing system failures in the country. Although the socialist governance in Albania was based upon the Soviet-type socialism, the country was characterized by extreme isolation and a harsher communism. Our main findings on the systemic failures of the Albanian NIS include the lack of national and international linkages, low engagement of the private sector in R&D and an undeveloped ICT infrastructure.