The impact of R&D spending and technology on economic development

In the 2000s, the increasing importance of the relationship between Research and Development (R&D) expenditures and technology has highlighted the discussions about the impact of technological progress and innovation on economic growth and development. Many theoretical and empirical studies in the economics literature stated that technological progress promotes economic growth and development. Especially, after the 1990s, the difference in productivity and the growth rates of per capita national income between OECD and non-OECD countries has increased and these differences proved the impact of the technological progress on economic growth and development. There is very comprehensive literature on the impact of technological progress on economic growth, both theoretical and empirical studies have shown the impact of technological progress and innovation on economic growth very well. However, there are only limited theoretical and empirical studies about the impact on economic development. In this context, it is important to determine whether technological progress and innovation promote economic development. The main purpose of this study is to determine the effect of R&D expenditures, technological progress, and especially technological diffusion on economic development using selected OECD countries' data. According to the findings of the study, it is clear that policymakers can contribute to the economic performance and prosperity of their country by increasing R&D expenditures, number of patents and trade of technology and promoting technological progress in this new century.