This book focuses on the economic factors which have impacted on the low-wage economies of Central and Eastern Europe (CEE), over the past twenty years. In this period CEE economies were mostly driven  by low-wage  based foreign direct investment (FDI).  Earlier publications made the case that the potential of this growth engine has been exhausted and that there is room for dynamic wage increases given the accumulated productivity reserve due to past wage moderation.

Searching for ways of how to break out of the low-wage trap, this publication, considers the policies which are needed to support a sustainable convergence process with their western European counterparts.

Chapters in this book examine different aspects of the CEE growth model, taking into consideration the changing role of FDI, the consequences of efforts to upgrade production capacity in both the foreign investment and domestic sectors.

Authors also explore the role of innovation, R&D and the use of EU Cohesion Funds as instruments to boost growth in the region. The importance of developing human resources and preparing CEE economies for the digital age, are key features of this publication.

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Table of contents

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Béla Galgóczi and Jan Drahokoupil: Introduction

Gábor Hunya: Chapter 1 - Conditions for an investment revival in Central and Eastern Europe

Magdolna Sass: Chapter 2 - Is a live dog better than a dead lion? Seeking alternative growth engines in the Visegrad countries

Marzenna Anna Weresa: Chapter 3 - Innovation, human capital and competitiveness in Central and Eastern Europe with regard to the challenges of a digital economy

Mark Knell: Chapter 4 - R&D internationalisation and local innovation in the Visegrad Group after the FDI peak

Andrea Szalavetz: Chapter 5 - Industry 4.0 in ‘factory economies

Martin Ferry: Chapter 6 - The role of EU funds in enhancing the development potential of CEE economies

Balázs Szent-Iványi: Chapter 7 - Investment promotion in the Visegrad four countries: post-FDI challenges

Zhelyu Vladimirov: Chapter 8 - The EU industrial policy and SME development in Central and Eastern Europe