Page 55 - Azerbaijan State University of Economics

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

Robert Solow, who later won a Nobel Prize in Economics, was one of those other

economists who discovered a very large residual, using a very different methodology
and different time period. As it happened, he got the same result for the size of the
residual – 85%. It was precisely the size of this residual that persuaded most economists
that technological innovation must have been a major force in the growth of output in
highly industrialized economies [Nathan Rosenberg (2004)].

III. MATERIALS AND METHODS
Studying the nature of innovative economic growth and its development directions
in a framework takes into account their theoretical and practical aspects. So in this
article, the mentioned aspects have been reviewed.

Innovation economists believe that what primarily drives economic growth in
today’s knowledge-based economy is not capital accumulation as neoclassical
economics asserts, but innovative capacity spurred by appropriable knowledge and
technological externalities. Economic growth in innovation economics is the end-
product of: [Antonelli, C. (2003)], [Johnson, Bjorn (2008)].

• knowledge (tacit vs. codified);
• regimes and policies allowing for entrepreneurship and innovation (i.e. R&D
expenditures, permits and licenses);
• technological spillovers and externalities between collaborative firms;
• systems of innovation that create innovative environments (i.e. clusters,
agglomerations and metropolitan areas).

In my view, innovative economic growth is understood as the increase in GDP
through the application of new technological advances in the national economy, the
creation of new and better-quality, highly competitive products and services.
Especially through commencing innovations that are achieved via the renewal and
expansion of relevant markets, changes in working conditions, organization, and
management. The innovation resource is a direct product of the intellectual activity
of the active part of the more professional and creative working population in the
country. The advantage of using the combined factors of innovation is the transition
to a new type of development in any economy, the acquisition of important features
in the marketing environment, and the achievement of a sustainable and competitive
economy. In my opinion, the criteria that characterize innovative economic growth
are as follows:

• The main sources of economic growth are science, education, and high and
science-based technologies.

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