SME efficiency in transforming regional business research and innovation investments into innovative sales output

Based on data provided by the Regional Innovation Scoreboard on 23 capital and 184 non-capital regions in Europe, slacks-based models of data envelopment analysis (DEA) reveal that the efficiency by which business research and innovation inputs are converted at regional-level aggregated innovative sales output in small and medium-sized enterprises was significantly lower in capital regions in the period 2006–14. In view of efficiency maximization, a majority of the capital regions overinvest in non-research and development innovation activities, are over-specialized in knowledge-intensive industries, and fall behind in converting research and innovation inputs in intermediary intellectual property outcomes.