Impact of Qualitative Components on Economic Growth of Nations

Abstract

According to theory, innovative activity gives a chance to increase a competitiveness and economic growth of nation. The purpose of this paper is validation of that assumption using the latest data available for EU countries. Data set of indicators include: global innovation index, (GII), European Summary Innovative Index (SII), Ranking of Competitiveness of Nations (in a form of summary as well as subsidiary data ) and set of macro economy data (GDP, labor productivity, export, export of high-tech, R&D expenditure as [as % of GDP] etc as measures of economic growth. Various regression models: liner, curvilinear, planar or spatial with one or two dependent variables will be calculated and explained. In addition the appropriate 2 D and 3 D-graphs will be used and presented to strengthen verbal arguments and explanation. The main result of this paper is relationship between innovative activity, competitive ability and growth measured as GDP per capita. Such relationship is shown as fairy good linear span of countries. Only two of them: Luxemburg and Norway due to higher than average growth value are outliers. The valuable outcome of this paper is classification of nation into groups: highly innovative- highly competitive, highly competitive-non innovative, highly innovative- non competitive and non innovative – non competitive. The last group of nations fall into trap of low competitiveness.

Keywords

• Competitiveness
• knowledge
• Social Capital
• Institutions
• R&D
• Economic Growth
• Innovative Activity