Sustained Economic Growth and Technology Policies

Government can consider technology policies that directly augment the incentives for research. We analyzed what the technology policies have effects on the growth rate in the one-sector economy. We know that any increase in the subsidy rate causes the rate of innovation to increase. A subsidy to R&D spurs product development. Faster innovation and growth come as a result. We showed that considering goodness of fit of regression model, we can see that the empirical evidence is strongly in favor of the character of R&D subsidies as the instrument spurring economic growth. We could see that 10% increase in the subsidy (amount) causes the rate of economic growth to increase by 0.8%. So, we can expect that through product innovation supported by technology policy, faster economic growth can be attained in the Korean economy.