The Relationship Between Technological Development and Economic Growth in Emerging Economies: Panel Causality Analysis

Technological Development

The concept of technological development is defined as all kinds of inventions and innovations that enable the production of a new good and the process or method that enables the production of an existing good at a lower cost as a result of the increase in the efficiency of the factors used in the production (Huňady and Orviská, 2014). Technological development is one of the most essential elements for economic growth and international competition. For this reason, companies have to make new product and process innovations based on technology in order to maintain their competitive position. The level of technological development, which is one of the indicators that determine the economic position of nations, is extremely important for countries (Inglesi-Lotz and Gupta, 2015), In this context, the most important indicator that distinguishes developed and developing countries from each other is “Technological Development Levels”.

According to Chris Freeman and Luc Soete, the founders of the innovation system, technology is defined as a concept used to express both the knowledge itself and the integrated state of this knowledge within a business system using physical production goods. In addition to the conceptual explanations of the word technology, it is seen that different definitions have been made by many authors and researchers in terms of economics in the academic literature. If a scientific definition is required, technology is generally considered as “a social process that transforms inputs into outputs” (Freeman and Soete, 2003).