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Supply side basis of endogenous growth

Yusuf Kurtoğlu

The theory emphasizes the significance of human capital for innovations in which the knowledge accepted as a production factor. Beside the level of human sources, the other key factor affect to the innovations is seen as the technological absorptive capacities of the firms. Within the context of innovations, “accumulation of the new knowledge” has the key importance that increases as the creative activities accelerated. During the R&D activities internal and external knowledge which embedded in people and goods interact each other by which the creative knowledge forms as a result. While the internal knowledge comprise of firms own technological stocks and skilled human sources, foreign trade and direct investment ventures are functioning as the major ways of utilizing the external knowledge with the aim of facilitating into the innovative efforts. Besides, firms’ “profit making necessities”, and universities/research institutes’ “methodical scientific studies” are also considered as major conditions that economically and socially effect to the R&D investment decisions. Thereby, such fundamental factors and requirements of the knowledge accumulation process which give impetus to the innovations reflects “the supply side basis of innovative activities and endogenous growth”.

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