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Theoretical and Applied Economics
No. 3 / 2019 (620), Autumn

Innovation as imperative for increasing productivity and economic growth: The case of the selected EU member countries and non-EU member countries

Lejla TERZIĆ
University of East Sarajevo, Bosnia and Herzegovina

Abstract. In the changeable environment of increasingly powerful and multiplex competition, it becomes one of the key preconditions for an appropriate reaction to worldwide challenges. The productivity and economic growth have to be recognized as a multi-dimensional mechanism containing various interlinked components accomplished through investments in innovation. The purpose of this paper is to explore the link between the components of innovation, productivity and economic growth in selected EU- member countries and non-EU member countries. The research results have shown that the productivity and economic growth in selected countries are significantly linked with their innovation rank. The innovation capability indicators measured by the innovation indices can be beneficial in comparative analysis between countries, and provide valuable information for countries to identify their own strengths and weaknesses, compare themselves with similar countries, and create consensus about fields of future actions.

Keywords: innovation, productivity, economic growth, EU-member countries, non-EU member countries.

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