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DESCRIPTION OF PROJECT SOLUTION The solution procedure is stipulated in the project and is structured into four components covering key areas of the researched subject, namely (1) growth performance and stability, (2) institutional quality, (3) innovation performance, and (4) quality of human resources. The project has been undertaken by three research institutions: the Faculty of Economics and Administration (ESF), Masaryk University, and the Centre for Economic Studies (CES), an institute at Grant Fund of the University of Economics and Management (GF VŠEM, o.p.s.), which jointly focused on the first three research components; and finally the National Observatory of Employment and Training (NOZV) at the National Training Fund (NVF, o.p.s), which dealt with the fourth component. Faculty of Economics and Administration, Masaryk University The main output of the 2006 research activity is represented by the analytical methodological publication Competitiveness of Czech Economy, which deals with key factors determining the competitive capacity of the economy, i.e. institutional, stabilization, and innovation aspects. It has been published by Masaryk University Publishing House and has been distributed to central authorities, universities, colleges, and research institutes; to public administration, local and regional authorities at national and international level, as well as to important entrepreneurs and consultancy companies. An electronic version of the publication, together with other materials produced by the Research Centre for Competitiveness of Czech Economy, is also available on the centre’s website. The solution procedure in individual research components has been as follows. I. Growth performance and stability The growth performance and stability component comprises three angles of perspective. These are: (i) an analysis of the performance of the Czech open economy focused on the research of its growth and stability potential, in particular with respect to the impact of monetary policy and inflation goals; (ii) an analysis of cyclical development of the Czech economy based on quantitative evaluation of stylized data; (iii) an analysis of fiscal policy centred on qualitative evaluation of the development of tax ratio components. Monetary policy and the development of the Czech open economy: Growth potential and stability of the Czech economy with respect to monetary policy implemented by central bank are core issues. The quantitative analysis of the economy has to a great extent benefited from an application of the results achieved by means of the original successfully identified dynamic stochastic model of the Czech open economy which also takes into consideration foreign influences on national economy. This model has been derived from the behaviour of representative economic agents; in order to reflect the complex reality, both real and nominal rigidities (inertia in respect to the consumption behaviour of a representative household, price rigidity and violation of the law of one price) have been involved. The structure of the model reflects the main specific characteristics of the Czech economy. The model identifies the development of selected basic factors determining economic growth and quantifies the influence of the openness of the small Czech economy on the degree of stability of is development. The outcomes of model simulations confirmed the significance of changes in the behaviour of economic subjects resulting from a particular monetary policy. Such changes affect the stability of national economy and its potential for economic growth. Stylized data about the economic cycle in the Czech Republic: The research has primarily dealt with stylized facts about the economic cycle in the Czech Republic. The conclusions of the analysis evaluate the stability of the economy and facilitate a more appropriate approach to theoretical models dealing with cyclical fluctuations. Cyclical components of crucial macroeconomic indicators (GDP components and other real and nominal variables) are estimated with the help of the bandpass filter. The behaviour of variables is studied by means of correlations – the analysis has shown whether particular variables are pro-cyclical, countercyclical or non-cyclical, and whether the variables in question keep ahead or behind the business cycle. Another area of the research is focused on Granger’s causality between the GDP cycle and other variables. Based on quantitative analysis, stylized facts about the Czech Republic and other developed economies have been compared and the differences have been evaluated. Finally, the conclusions of an application of alternative economic theories to the stylized facts have been discusses and their information value has been assessed. In addition, one part of a subchapter focuses on individual components of GDP and their development in time with a special emphasis on import and export and their components. Analysis of the development of tax ratio in the Czech Republic: The development of tax ratio and its components (i.e. its structure) is an important factor of competitiveness and growth potential of an economy. A distinction has to be drawn between tax ratio in a narrow sense (measured as the ratio of tax revenue to GDP) and the overall tax ratio (including customs, social and health security contributions). The overall tax ratio has been considered first in “gross” segmentation (direct taxes, indirect taxes, and social and health security contributions). Consequently, its individual components have been further separated (according to the types of taxes) and have been subject to a detailed analysis. Special attention has been paid to meeting the targets of state budget, which represents an important tool of fiscal policy. The analysis covers the period of 1996 to 2004. II. Institutional quality Broadly speaking, competitiveness can be viewed as a capacity of a long-term and sustainable growth. In a similarly broad perspective, institutions as such may be understood as sets of rules and general determinants of development. The main goal of the research has therefore been a complex analysis of institutional influences upon economic growth over the fifteenyear period starting in 1990 (note the link to the previous Growth performance and stability component). The starting point of the analysis can be identified with the theoretical connections existing between individual determinants and economic growth. Subsequently, the development in individual areas has been analysed and the impact of the development of particular factors on competitive capacity of the economy has been determined. The whole of research into institutional quality in 2006 was divided into four separate subfields. The first deals with institutional factors as such; the second focused on microeconomic environment, the third on macroeconomic environment and economic policy, and last, the fourth subfield concentrated on external influences. This division is without any doubt an artificial one since individual factors overlap; however, such a methodological tool helps to a better understanding of the issue. Within the first – institutional – subfield, five subject matter areas, which we believe play a crucial role in long-term competitiveness of the Czech economy, have been analysed. The scope of the analysis covers: legal system, political stability, corruption, demographic development, economic liberties. The second subfield is concerned with growth determinants from a microeconomic perspective. This line of research includes analyses of individual markets of production factors as well as the issue of regulation and deregulation of economy and protection of competition. Government activity is discussed in the third, macroeconomic subfield. The object of this analysis is the implemented economic policy in its fiscal, monetary, social and structural aspects with regard to its impact on the development of economic potential of the country. Lastly, the fourth subfield is focused on the analysis of the influence of external factors. This issue has been treated from the viewpoint of all three basic markets – thus attention is paid to foreign trade, capital transfers, and migration. Within the realm of this component, research has been also focused on the analysis of determinants of economic growth. This orientation allowed the creation and definition of a theoretical and methodological framework for a more detailed analysis of individual factors of economic growth, particularly in connection with the first component. A search for the determinants of sustainable growth of a potential product allows for an identification of longterm sources of competitiveness of the Czech Republic. In this conception, the competitive capacity of an economy is identified with an ability to achieve long-term economic growth. Therefore, the search for the factors of competitiveness is transformed into a search for the factors of long-term economic growth. This analysis has been concerned with several (conflicting) theories of long-term growth and the very notion of competitiveness. The efficiency of government and institutional changes with respect to the creation of transparent and functional business environment has been subject to scrutiny; equally, the government’s influence on the general degree of regulation in society has been examined, special attention being paid to economic regulation (price regulation, job market regulation, and financial institutions regulation). The analyses of the quality of the regulation process deal with the period between 1990 and 2006. Individual determinants of the quality of regulation have been analysed, too. One of the basic assumptions underlying the research derives from the belief that a low quality of public administration creates space for corruption, the analysis of which also falls within this area. An inseparable part of the analysis is formed by an assessment of the quality of the legal system including the protection of property rights and the creation of a legislative framework for entrepreneurship. This is the area where the evaluation of the quality of administration overlaps with the quality of business environment. III. Innovation performance The research is based on the notion that the competitiveness of national economies and their supranational integrations is primarily determined by the competitiveness of their basic elements – individual companies. Competitiveness, depending to a great extent on the innovative performance of the companies and, in a broader perspective, on their economic success, is determined not only by factors related to the general environment, but also by factors specific for the region in which the company is economically active, and especially by factors specific for the company’s internal and external environment. The research work has been divided into partial goal-oriented tasks: research of innovation performance and competitiveness on company level, research of innovation and competitiveness from regional perspective, and research of innovation performance and competitiveness from the perspective of public support for innovation activities. Research of innovation performance and competitiveness on company level: The task was oriented towards a secondary analysis of the results of empirical surveys and towards the preparation of an empirical survey of the competitiveness and innovation performance of companies in the Czech Republic. These goals have been fulfilled and the following points have been achieved: (i) secondary analyses of the results of empirical surveys related to the investigated subject matter in the Czech Republic and abroad have been conducted; (ii) a methodology of empirical investigation of competitiveness and innovation performance of companies in the Czech Republic has been developed; (iii) a simulation of the empirical survey methodology has been conducted; and finally, (iv) a financial analysis of selected companies has been conducted. The pilot phase of the empirical survey was not fully undertaken in 2006. Research of innovation performance and competitiveness from regional perspective: (i) an analysis of business environment in individual regions and (ii) a secondary analysis of innovative companies have been done. Regional quality of business environment and innovation potential of companies have been particularly researched. Further, secondary analyses of innovative companies included in the database of Association of Innovative Entrepreneurship CR have been conducted. Research of innovation performance and competitiveness from the perspective of public support for innovation activities: This area of research has been concerned with the delimitation of the areas of co-operation between universities and regional authorities of public administration and professional associations involved in the innovation processes in the particular regions and possessing a potential to cultivate them. The possibilities of cooperation with higher education institutions in the preparation and implementation of strategic documents of territorial self-governing units (regional, municipal) related to human resources development have been discussed. The scope of co-operation with the university (Masaryk University) in the form of student work placements and involvement in the preparation and implementation of strategic documents of territorial self-governing units has been set. Another area of research focused on the preparation of an empirical survey of the competitiveness and innovation performance of individual companies. First, a secondary analysis of the results of empirical surveys carried out in the Czech Republic and abroad was carried out. The main concern of the research has been the methodology (including organizational aspects) of an empirical survey dealing with companies based in the Czech Republic. Theoretical bases of the survey, especially of the hypotheses concerned with the factors influencing competitiveness and innovation performance of companies were formulated. Several versions of a questionnaire for field research were prepared. This questionnaire, together with methodological principles of the empirical survey, was discussed at a meeting of an expert group composed of top managers of selected companies, company associations’ representatives and other specialists. The questionnaire was tested by a simulation realized by the research team in co-operation with company representatives. This simulation resulted in a request for substantial changes of the original questionnaire. As part of the preparatory work on the empirical survey, financial analyses of a sample of approx. 1,700 companies were conducted in parallel. The research into this component also comprised an identification of main factors responsible for the competitive ranking of individual regions of the Czech Republic in a wider European context (regional accessibility potential including accessibility of foreign regions at the NUTS II level, economic sensitivity derived from the definition of sensitive industries within the EU-15 and their employment share, economic standard determined by relative values of regional GDP and the quality of business environment based on the identification of main influence factors reflecting the investment and development preferences of companies). A dynamic assessment of the main indicators of regional competitiveness (regional GDP of individual regions of the Czech Republic and its development, average wage and is development, unemployment rate and its development, education standard of the population defined in terms of the education index and its development, migration balance indicating a region’s general attractiveness) played an equally important part in the analysis and resulted in a typology of the regions. Further attention was paid to development of the very methodology of regional assessment of innovative quality of business environment, with the emphasis on the changing preferences of innovation-oriented companies (the growing significance of employment and environmental factors and, on the other hand, the declining importance of infrastructural factors) and its application to the regions of the Czech Republic. Centre for Economic studies (CES), National Observatory of Employment and Training (NOZV) The key output of the CES and NOZV in 2006 is The Czech Republic Competitiveness Yearbook (analytical part), published both in print and electronically (website and a CDROM). The Yearbook presents the analytical methods applied in the research and provides an overview of its thematic orientation. The publication consists of four chapters (the first three were produced by CES and the fourth by NOZV). Partial outputs of the research are indicated in the bibliography list. The 2006 Yearbook presents an analytical work that follows the statistical methodological approach of the previous year. I. Macroeconomic performance and stability The first chapter deals with growth performance as well as with the processes of real and nominal convergence to the average of the EU. The second chapter is focused on the development of industry structure from the perspective of gross value added, labour productivity and employment rate. Apart from standard methods of structural analysis, the approach utilizing input-output tables is also applied. The third chapter deals with supply and demand and macroeconomic balance. Growth factors on the supply side comprise labour growth, capital growth and the development of total factor productivity. Macroeconomic balance is analysed in particular in relation to national savings and domestic investment, including their impact on external balance. Growth and convergence: This chapter shows the causes of low growth performance of the economy in the second half of the 1990s and the factors which led to the acceleration of economic growth in the years 2001-2005. Special attention is paid to the influx of direct foreign investments and to the growing influence of companies under foreign control. Economic growth is measured not only by the traditional gross domestic product indicator, but also by means of alternative indicators of real national income. These take into account also the impact of shifts in foreign terms of trade and processes of primary and secondary distribution of income with the world. In the case of the Czech Republic, the indicators of real income demonstrate more favourable results in overall economic performance on a long-term basis than the traditional GDP indicator. The real convergence process is measured by the level of GDP per capita in parity with purchasing standard. The convergence of the Czech Republic’s economic standard to that of the advanced countries of the EU was marked by abrupt fluctuations during the 1990s. The turn came during the period of 2000-2005 when the pace of convergence became much quicker. Along with the real convergence, nominal convergence that concerns price levels, inflation rates, interest rates, and wage levels was also in progress. Structural changes: This chapter deals with the development of industry structure of the Czech economy from the perspective of gross value added and employment rate. The analysis moves from a macroeconomic perspective drawing on basic production sectors to individual industries with a special focus on the manufacturing industry and its structure. The development of labour productivity comes under special scrutiny. The comparison is made both in time series and in relation to selected EU countries. Apart from the analysis at the level of individual sectors and industries, special attention is paid to particular groupings of activities according to their technological and knowledge intensity level within the manufacturing and services industry. Apart from sector perspective, the development of import and export of high-tech products is also considered from product perspective. In addition, standard structural analysis methods are complemented by an approach based on input-output tables. The research involved a comparison of production multipliers that are important for the analysis of the role played by individual sectors in the performance of national economy as well as in international comparison. A division of activities according to their technological and knowledge intensity was employed, too. Cluster analysis based on coefficient matrix of total consumption was used in order to define sector units that play an important role, among other things, in the dissemination of technologies, knowledge and innovation in economy. Supply, demand, and stability: This chapter deals with factors that affected the growth of GDP on the supply and demand side as well as with their impact upon macroeconomic stability. The analysis of growth factors on the supply side takes into consideration the growth of labour, capital, and the development of total factor productivity. The results of this analysis have clearly shown that the growth experienced by the Czech economy was predominantly fuelled by the growth of total factor productivity. The 1996-2004 period on the job market may be characterized by an overall drop in employment rate. It was not before 2005 when the situation showed signs of improvement. On the other hand, the demand side of Czech economy displayed the following characteristics – in the long-term perspective, domestic demand was growing faster than domestic supply (GDP) while keeping external imbalance under control. This development was caused by a favourable development of terms of trade. Only in 2005 did the situation change owing to declining terms of trade. The assessment of macroeconomic stability is based on the relation between domestic supply and demand, and on the relation between national savings and domestic investment, which has an impact on current account balance. A more detailed look at the relationship between savings and investments in individual institutional sectors points to a potential danger related to the decline in household savings as well as the diminishing public sector savings. II. Institutional quality The first chapter of this section centred on quality assessment of governance and the second on business environment as a way of indicating institutional quality of the Czech Republic and the EU. Both chapters proceed from the outputs of World Bank programmes supplemented with particular views of other specialized analytical institutions. The chapter on quality of governance comprises a comparative analysis in the field of corporate governance. The concept of institutional quality is evaluated by means of a comparison with the level of public expenditure and with competitiveness indices. The second chapter focuses on the assessment of the position of the Czech Republic in respect of business environment, not only within the EU framework, but also in wider international context. The assessment covers a wide range of characteristics and the results are interpreted with respect to further economic and institutional indicators: tax burden, the index of economic freedom, and the level of corruption. Quality of governance: The assessment and measurement of the quality of governance is based on data compiled over the period of more than ten years and published as part of the World Bank Governance Matters project. In addition, a number of other resources complement this basis. The aim of this effort is to provide an evaluation of the quality of governance in the Czech Republic, both in comparison with other transitive economies and within the whole of EU. The complex index of the quality of governance is based on an evaluation of the following areas: quality of democracy, political stability, government efficiency, the degree of regulation burden, quality of legal order, and corruption control standards. Supplementary surveys carried out by other subjects largely confirm the assessment reached. The second subchapter deals specifically with the field of corporate governance. The object of the scrutiny is in particular the structure of public administration bodies as well as their legal liability; further, a comparison with selected EU countries is drawn. The survey has also outlined possible solutions for the future. The final chapter is centred on the dynamics of institutional changes typical of new EU member countries, both in relation to the sum of public expenditure measured as a percent of GDP and in relation to the competitiveness index published annually by World Economic Forum. The results point at a division of new EU member states into two categories, reflecting the countries’ tendency towards different types of capitalist society. Business conditions: This chapter presents the results of World Bank survey of 2005 realized as part of the Doing Business project with a particular emphasis on and assessment of the Czech Republic’s position within the EU and in wider international context. Characteristics of regulatory burden and its impact on business activities are the main criteria according to which entrepreneurial conditions are assessed. The chapter takes into account ten indicators of business environment considered in the project in 2005, i.e. starting and closing a business, business licensing, enforcing contacts, investors’ protection, property registration, loan acquisition, staff recruitment and dismissal, foreign trading, and taxation. Each subchapter provides a comparison of conditions in respect of a particular indicator. The following part brings a more detailed evaluation of individual components of the indicators in question, providing an account of the specifics of the Czech legal system in the respective areas. Furthermore, both implemented and assumed changes aimed at an improvement in critical areas are presented. The last chapter provides a comprehensive overview of results achieved by individual EU countries in the ten indicators of business conditions and, furthermore, in the case of the Czech Republic structured in terms of their individual components according to the level of quality achieved. In addition, relations between the quality of regulation and other economic and institutional indicators are outlined – in particular the relation between the level of tax burden, the index of economic freedom, and the level of corruption. III. Innovation performance The first chapter concerns an assessment of the characteristics of a qualitatively based competitive advantage using a complex analytical framework. A distinction is drawn between the sources of the advantage, those of technological knowledge, and key competitiveness components (with emphasis on the importance of an involvement of companies from host countries in the supra-national value chain). The following chapter analyses in detail, with the help of the concept of national innovation system, the input (financial and human resources, including specific preconditions) and the output of innovation performance (particularly on the basis of the results of innovation surveys). The third chapter evaluates the characteristics of an information society, especially according to relative significance of expenditure on ICT, the quality of related infrastructure, the offer of services and the use of applications by key subjects on a scale starting at macroeconomic and ending at company level. Competitive advantage: The international comparison is based on the analytical framework of the matrix and the diamond of competitive advantage, which takes into account both economic and knowledge-based progress and evaluates the degree to which political measures are appropriate. The matrix defines competitive advantage as a cost vs. quality-based variable and innovation capacity as a quality determined by external vs. internal technological knowledge. The positions of individual countries are specified according to the level of competitiveness achieved (driven by production factors, efficiency, and innovation) and the modes of knowledge application (passive technological transfer, adaptation to local needs, and innovation capacity itself). The diamond of competitive advantage provides for a more detailed analysis of the countries’ positions according to four basic pillars comprising four indicators specified by the role they play in the achievement of qualitatively defined competitiveness. The indicators taken into consideration are: progress in production technologies, completeness of value chain, quality of environment, and the development of relations and interactions. Specific attention is paid to the importance of technological transfer in global value chain in the new EU member countries. The analytical data in the EU-25 clearly manifest the differences among countries as far as reaching the target level of innovation-based competitiveness is concerned. Inputs and outputs of innovation performance: The evaluation draws on a conception of national innovation system which is directed towards academic science and its education function, business sector and its innovation potential, as well as regulatory policy aimed at the creation and maintenance of infrastructure support for the innovation process. The input analysis comprises system characteristics, dynamics and structural changes of research and development sector and specific issues related to its internal division and interaction of its components. The analysis takes advantage of international databases and characterizes methodological relations in the systems of indicators applied (Frascati manual). The input side comprises a wider context of factors with an impact on innovation performance, including availability of top-class qualifications, the standard of publications, the extent and dynamics of public expenditure on research and development, co-operation between universities and companies, and accessibility of venture capital. Innovation outputs can be characterized by means of innovation performance of particular companies. The analysis has been enabled by regular statistical surveys focused on innovation in EU member countries together with further research into this field undertaken in the Czech Republic. The analysis also takes into account references to specific conceptual and methodological problems related to statistical survey and measurement of innovation (Oslo manual). Information society and ICT: The introductory part of this chapter defines the notion of information society and outlines the possibilities of measuring its quality. The state of information society achieved in the Czech Republic is subject to a detailed analysis based on a number of selected characteristics in comparison with other, primarily EU-25, countries. The analysis draws on a group of sixteen indicators, whose values show a better position of the Czech Republic in infrastructure, in particular in telecommunications and mobile devices, in contrast to the country’s use of Internet-connected services and electronic business applications. The following part deals with an analysis of current state and expected increase in demand on the ICT market in the Czech Republic and other new EU member countries, the key indicators being the volume of demand for means and projects of infrastructural nature, e.g. safety technologies, and the volume of demand in the sector of progressive application of ICT and information services, such as outsourcing, system integration. A comparison of the structure of the demand in the Czech Republic and some of the old EU countries forms part of the analysis. On the other hand, the analysis of the supply side of the ICT market is oriented exclusively to the Czech market and its development, especially to an evaluation of the current supply of services provided by several leading providers on the market. The analysis of supply and demand is based on data provided by leading analytical companies, especially IDC. The final part of the chapter focuses on the key preconditions of effective application of ICT on company level and further also on specific conditions and requirements for optimal use of ICT in small and medium size companies. IV. Quality of human resources The first chapter deals with the assessment of the level of knowledge and skills of 15-year old and adult population, one of the researched areas being the level of computer literacy of the population. Another area standing in the centre of attention is flexibility of the workforce, in particular occupational and geographical migration. The second chapter analyses youth participation in secondary and tertiary education and the involvement of adult population in individual forms of further education. The crucial factors determining the degree of participation in further education are given special attention. Company education systems and investment in education in general are evaluated. The third chapter deals with personnel availability in technologically demanding sectors, occupational and qualification standards of human resources, and the inflow of tertiary education graduates (particularly of technical and natural science fields of study. The quality of tertiary education is also assessed. Knowledge and flexibility of the population: The first part of the chapter is centred on education structure of the population and on the relation between the proportion of tertiaryeducated workforce and GDP. Educational mobility is analysed by means of the differences in the representation of tertiary-educated people in the workforce leaving and entering the job market. The level of knowledge and skills of 15-year old population is evaluated on the basis of the average mathematical, reading, and natural science literacy, by the ability to solve problems, and according to the proportion of pupils achieving the highest level of mathematical literacy. A similar approach is applied in the analysis of knowledge and skills of adult population. Another field covered by the analysis, computer literacy, is also examined. In addition, attention is paid to the standard of household computer and Internet access facilities. The analysis involves indicators of Internet use intensity in general as well as in relation to individual age groups, in addition, knowledge of computer programmes is taken into consideration. The level of entrepreneurial activities among the population is measured on the basis of the proportion of entrepreneurs in the economy, by their qualification structure and their proportional representation in the employment in individual sectors. Flexibility, professional and geographic mobility are becoming increasingly important features of the workforce. The final part of the chapter focuses on these aspects, as well as on the proportion of fixed-term and part-time contracts, which contribute to the flexibility of the workforce. Life-long learning: This chapter analyses youth participation in secondary and tertiary education and participation of adult population in further education. Detailed attention is paid to individual forms of further education. Participation of adult population in formal education is examined in relation to particular age and qualification groups. On the other hand, participation in informal education is analyzed from the perspective of its extent and purpose; special attention is paid to the participation of the unemployed in retraining programmes. The analysis of participation in informal education involves the extent of self-education and the differences among individual qualification groups. The following part analyses in detail the role of age, education, residence, and above all, the role of occupation in taking part in further education. Participation of highly qualified professionals in individual forms of education is examined. Education programmes provided by employers form a special category of the analysis. The analysis reveals differences in approaches of companies according to size, sector affiliation, ownership forms, as well as in the extent and orientation of the education. The final part of the chapter deals with company spending on education in individual categories of further education, especially with expenditures on initial training in general and expenditures on individual levels of education with the help of indicators covering particular aspects of funding and efficiency of the investment. Human resources for knowledge-based economy: This chapter focuses on human resources in technologically demanding branches of the manufacturing industry. The analysis rests on employment indicators for technologically demanding manufacturing industry. The share of technologically highly and medium demanding branches in total employment rate is analysed separately. The scope of the analysis is further broadened by data on internal structure of employment, the proportion of specialists and technicians and the proportion of tertiary educated workforce within these branches. The analysis of employment in knowledge intensive services, in particular in technologically demanding services, utilizes the same methodology. In addition, ICT facilities of the economy are assessed on the basis of the proportion for ICT jobs in the total employment in the country and the overall demand for ICT skills in the economy. Another researched area is concerned with the influx of tertiary education graduates and doctoral students, particularly of those with a degree in natural sciences or technical fields of studies, which represent an important segment of human resources for activities requiring high level of qualification. The quality of tertiary education is assessed from two perspectives. The first regards the ability to produce adequately educated specialists, while the other focuses on the contribution to the development of science and innovations; a complementary perspective taken into account is concerned with the degree to which tertiary education systems are open in relation to foreign countries.