Transforming power of research and development on inequality and well-being: a European Union perspective within the circular economy framework

To establish a "well-being economy" that prioritizes human and environmental welfare, understanding the relationship between income inequality, research and development (R&D) potential, and human development is crucial. This study delves into these relationships in European Union (EU) countries, focusing on the adoption levels of a circular economy (CE). Analyzing data from the 27 EU member countries spanning 2010 to 2020, a cluster analysis was utilized to categorize nations based on their CE adoption levels. The panel regression analysis findings revealed a marked positive correlation between income and R&D, with countries having a more robust CE adoption showing stronger ties. Furthermore, a notable positive link was discerned between R&D and human development indicators. Despite these significant relationships, the government R&D sector exhibited inefficiencies, especially in countries with heightened CE adoption. These findings carry profound implications for policymakers, urging a redefinition of economic growth metrics and a shift toward a well-being economy that emphasizes human and environmental health.