Innovation-led Pathways to Economic Growth

Heli Koski, Natalia Kuosmanen and Tero Kuusi

No 147, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract This brief presents key findings from Etla’s “Innovation-Driven Pathways to Economic Growth” project, which deepen the understanding of the mechanisms behind innovation-driven growth and evaluate the role of innovation policy in promoting sustainable growth in Finland. The findings underscore the critical role of foreign inventors and skilled employees in driving innovation and economic renewal. Immigration of highly skilled individuals enhances knowledge and diversity, boosting the effectiveness of innovation policy measures, such as R&D subsidies. Fully realizing this potential requires the effective integration of foreign experts into research and innovation activities. Supporting the green transition simultaneously presents Finland with significant opportunities to strengthen its competitiveness. While Finland’s share of green production currently lags behind international leaders, the country’s industrial structure and high-tech expertise provide a solid foundation for growth. Effectively targeted R&D subsidies can boost productivity and improve societal welfare. Targeting support for high-innovation-capacity companies can accelerate structural economic reforms. However, policymakers must consider adjustment costs, which can reduce the impact of growth policies.

Keywords: Innovations; Immigration; Productivity; Economic growth (search for similar items in EconPapers)
JEL-codes: D23 F22 J61 O3 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2024-12-11
New Economics Papers: this item is included in nep-cse, nep-env, nep-gro, nep-ino and nep-sbm
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