Abstract:
Neoclassical economic theory states that the
growth of the nation primarily is dependent on the
innovation potential of the country. However, this
theory is often being refuted by the recent empirical
research, proving that the innovations are becoming
more cost-extensive, late in generating return on
invested capital and not as useful as they used to be.
The present study researches the effect of
innovation on the EU member-countries economic
development, having selected R&D expenses,
number of patents and number of researchers as
innovation proxies.
The results prove that there is a strong
relationship between the R&D expenses and GDP
growth as well as the labour productivity, but no
evidence was found that the number of scientists or
the number of patents significantly influence
economic development of the country.
