The Impact of Technological Innoavtion on Economic Growth Across Countries

Technological innovation is a key driver of economic growth; however, its effect varies across countries at different development levels. This study examines the relationship between technological innovation, measured by the Global Innovation Index (GII), and economic growth, measured by Real GDP per Capita, across Developed and Advanced Economies, Developing Economies, and Emerging and Developing Economies. Utilizing panel data from 88 countries, the analysis implements a fixed-effects regression model with robust standard errors to address heteroscedasticity and serial correlation. Findings reveal distinct patterns in innovation’s impact on growth. Developed and Advanced Economies show the strongest positive relationship, where high GII scores align with economic performance. Developing Economies exhibit mixed outcomes due to structural barriers like limited R&D investment and weaker institutions. Emerging and Developing Economies experience a non-linear relationship, where innovation yields greater advantages beyond a threshold. Controlled variables, including population size, literacy rate, and trade openness, also influence economic outcomes. Recommendations include increasing R&D investments, fostering academia-industry collaborations, and prioritizing human capital development. Additionally, Emerging and Developing Economies should adopt innovation-friendly policies, such as tax incentives and infrastructure improvements, while regional cooperation can help bridge technological gaps. This study underscores the heterogeneous impact of innovation and the need for tailored strategies to maximize its benefits for inclusive, sustainable growth.