Page 51 - Azerbaijan State University of Economics

Namiq Abbasov: The Nature of Innovatıve Economıc Growth and Development
Dırectıons of Its Formatıon

In current conditions, for the purpose of achieving high-quality and sustainable
economic growth and strengthening the position of the country's economy in the
globalized world economy, it is necessary to develop and implement improvement
directions for innovative economic development, as well as a legislative frameworks
that stimulate the development of an innovative economy, and the regulatory
mechanisms necessary to ensure innovative economic growth. In general,
economists have identified three interrelated mechanisms of economic growth. The
first mechanism is the efficient allocation of resources; the second mechanism is
capital accumulation; and the third mechanism is scientific and technological
progress. Looking at the experience of developed foreign countries, it seems that the
economic progress of society is mainly focused on the effective use of the
opportunities of science-intensive technological processes. At present, in developed
countries such as the United States, Germany, and Japan, about 70% of exports are
science-intensive high-tech products.

From this point of view, one of the main factors of economic growth in the Republic
of Azerbaijan should be innovation based on science, education, and high
technology. Due to this, effective economic development based on scientific
knowledge and high technologies should be one of Azerbaijan's priority goals.
Azerbaijan has ample opportunities for implementing innovative economic growth.
Thus, as a result of some reforms implemented in Azerbaijan in recent years, our
country has strengthened its position at the international level and has taken a
leading position in the CIS in terms of GDP growth and foreign investment per
capita. At present, the Republic of Azerbaijan has foreign trade relations with more
than 170 countries of the world, and foreign investments in the country's economy
from 1995 to 2020 amounted to 146.97 billion US dollars (The State Statistical
Committee of the Republic of Azerbaijan). However, it is important to note that,
according to economic analysis and comparisons, the level of organization and
development of innovations in Azerbaijan is lower than in developed countries.
Although the amount of funds allocated from the state budget for the development of
science has increased in recent years, its share of GDP is 0.2%, which means this
share of GDP is 10 times less than in developed countries. It is known that
innovation activities have great importance for achieving sustainable economic
development and growth in the economy as well as strengthening the position of the
country's economy in the world market.

In this regard, in order to achieve sustainable economic growth and reduce the
dependence of the country's economy on oil and gas exports, it is important to
develop and implement the necessary development directions and mechanisms
aimed at innovative economic growth as a systematized function of the state.

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