Articles · Vol. 2 No. 9 (2026)

The Impact Of Innovation Potential On The Competitiveness Of National Economies: A Comparative Economic-Empirical Analysis

Authors

  • Sarvarbek ALLAYEV

Keywords

innovation potential national competitiveness Global Innovation Index R&D intensity labour productivity innovation efficiency resource rents Uzbekistan cross-country analysis. 577 www.mijournals.com E-ISSN 3069-8375 Vol. 2 (Issue 9/2026)

Abstract

This article examines the extent to which national innovation potential explains cross-country differences in economic competitiveness. Innovation potential is measured by the Global Innovation Index (GII) 2025 score, competitiveness is proxied by labour productivity in the Porterian sense (GDP per capita at purchasing power parity), and research intensity is captured by gross domestic expenditure on R&D as a share of GDP. A cross-section of 98 economies (69 with R&D data) is analysed by means of correlation analysis, ordinary least squares estimation with heteroscedasticity- consistent standard errors, quadratic and split-sample specifications, and a residual- based measure of innovation efficiency. Innovation potential and competitiveness are strongly and positively associated (r = 0.714; ρ = 0.750): a ten-point increase in the GII score corresponds to approximately 55 per cent higher output per capita. When innovation potential and R&D intensity are entered jointly, only the systemic indicator remains statistically significant, which suggests that research spending translates into competitiveness only through the institutional and absorptive capacity that surrounds it. The relationship is concave, and its marginal payoff is roughly twice as large below the sample median as above it, indicating that catch-up economies gain most from incremental improvements in innovation capability. Residual analysis identifies a systematic decoupling of income from capability in resource-rentier economies and confirms Uzbekistan’s status as a modest over-performer despite the lowest research intensity in its peer group.

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