Academic journal article Asian Social Science

Innovation as a Vector of Regional Economic Development and a Necessary Condition for the Progress of the World Economy

Academic journal article Asian Social Science

Innovation as a Vector of Regional Economic Development and a Necessary Condition for the Progress of the World Economy

Article excerpt

Abstract

Innovative development is an essential component of economic development, responding to global challenges of our time. Please be aware that nowadays there is a great increase of not only the practical implementation of innovative technologies and processes, but also of theoretical understanding of these trends in theoretical studies. Exploring the nature of innovation processes and factors of their incentive economics focuses on the large-scale process of generating ideas and theories, issues of priority, issues of innovation, and economic and cultural backgrounds' need for innovative ideas. Innovation is the result of the transformation of ideas, research, development, new or improved scientific and technical, socio-economic, political and other decisions that promote, improve the quality and standards of living of the population and national security through the harmonization of the economic interests of economic entities (profit firms), market of consumer interests (needs at the lowest cost) and interests of society (rationalization needs, environmental protection, reduction of unemployment, the growth of the tax base, increase in average household incomes, reducing their differentiation, growth of intellectual potential of society, increase in life expectancy, increasing competitiveness of regions, countries and so on. Therefore, it is necessary to identify the role of innovation in the development of regional and global economy, which this study is dedicated to.

Keywords: economic development, innovation, progress, regional economy, world economy

1. Introduction

The last third of the 20th century was characterized by turbulent events in the life of human society. Tectonic shifts in the economic, political, and social structures periodically explode established order of things, cause rapid, unpredictable course of events. And perhaps the most dramatic events unfold exactly in the economic sphere. At the heart of these movements is the scientific and technical progress, and the pace is more accelerated.

Society has changed beyond recognition the appearance of new generation of tools and objects of labor, vehicles, and communications equipment. New forms of work organization and management completely changed the look and the very concept of enterprise, industry, productive and unproductive labor. Social structures and institutions underwent significant restructuring and renewal: the ratio of property, regulatory mechanisms of production and distribution of national wealth. There is a new type of labor, both individual and collective.

For nearly a century, the capitalist world at least twice made the transition to a new type of reproduction. In place of line production on the basis of rigid automation there came highly efficient, flexible production, calculated to produce a high quality product for individualized demand. One of the basic conditions for economic development was the growth of competitiveness and ensuring the leading position of domestic industry in international markets of high technology (high-tech) products.

2. Materials and Methods

The object of this study is innovations and their role in the development of regional economy, and the progress of the world economy. In economics, there are two types of growth: extensive and intensive. Economic growth due to an increase in the amount of resources simply by adding factors is the extensive type of economic growth. Economic growth, associated with the improvement of the quality of resources, using the achievements of scientific and technological progress, is an intensive type of growth. Accordingly, two types of growth are two groups of factors:

1) Factors that affect the amount of resources: labor, land, capital, entrepreneurial skills. These factors do not affect the qualification of workers and their productivity, quality equipment and technology does not change;

2) Factors that affect the quality of the resource. …

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