CC BY
15UDC 330.3; 338.001.36; 338.22; 338.142
IMPACT OF INNOVATIVE DEVELOPMENT ON STATE REGULATION OF THE NATIONAL ECONOMY: COMPARATIVE DATA OF FORMER USSR COUNTRIES
YUZBASHIEVA GULSHEN ZAHID KIZI Head of the Department of Economy Institute of Azerbaijan Ministry of Science and Education,
Baku, Azerbaijan
ABASOVA SAMIRA HUSEYN KIZI
Leader Researcher of Economy Institute of Azerbaijan Ministry of Science and Education, Baku,
Azerbaijan
YUZBASHIEV ISRAFIL HABIB OGLU
Employee of SOCAR representative office, Geneva, Switzerland
Annotation. Today, a lot of work is being done to overcome the technical and technological gap with developed countries, despite some local achievements, which requires a large-scale technical and technological modernization of the economy. The lack of modern market relations, the low level of competition is one of the causes of technical and technological problems, which reveals the need to find our own way of the economy effective modernization. Therefore, it is advisable to consider the patterns of building an innovation market and the possibility of effective state intervention in this process. This article discusses the role of the state in innovative transformations, as well as 3 main factors of innovative changes: scientific developments, investment, productive forces. The data of Azerbaijan is analyzed in comparison with USSR former countries. The authors also consider not only the possibilities of the innovative potential of the national economy, the competitive advantages of former USSR countries, but also models of the country's innovative development that are acceptable to Azerbaijan.
Key words: innovative development, technological support, investment of innovative projects, competitive advantages of former USSR countries, state regulation of innovative transformations, models of innovative development.
VI. Lenin in 1916 in his work "Imperialism, as the highest stage of capitalism" [1], based on the analysis, gave a final assessment of free competition capitalism and brought out a new phase of capitalism - imperialism, characterized by the concentration of capital, the suppression of competition and the growing influence of large corporations. This situation is especially evident in the current situation, with the intensification of globalization process, regionalization, a pandemic and an increase in the number of local wars. In 1908 J. London in his book "Iron Heel" noted [2]: "...while you are trying to return the age of competition, the trusts calmly deal with you", "...the age of competition is leaving, and it is being replaced by the age of concentration of production".
As you can see, what was predicted a century ago is relevant at the present time. It is important to know who, why and for what purpose will carry out innovative development, since for progressive development it is expedient to develop the real sector of the economy by using the innovative and investment potential in order to ensure sustainability and reduce dependence on the world market conditions. Therefore it is advisable:
> for the introduction of innovative technologies in public administration, the state itself must be the producer and main supplier of these innovations to itself. The production of all software products and technological base should be produced, supplied and serviced only by our own state-owned closed enterprises;
> a special system and control of data transmission over networks is needed (encryption and coding in parts, and then their combination into a single whole);
> the introduction of innovative systems involves a certain level of training of qualified personnel, but to simplify this process, it is advisable to use the simplest interface model. Also, before the introduction of innovative technologies, it is important to test them qualitatively for their correct technical functioning;
> the decision-making system on the part of the state and the system itself for the development and implementation of innovative technologies in state industries should be flexible.
Modernization is finding the priorities of the future in reality and finding the best ways to this future. Structural changes occur due to factors of production, investment and innovation, but highlevel structural changes are created due to innovations in the conditions of economic growth, which are more effective. This leads to the development of infrastructure, the growth of qualifications, the expansion of sales opportunities, the growth of internal competition, investment in reducing production costs, and increasing the overall potential.
Structural changes, at the level of factors, are carried out due to the availability of natural resources, surplus and cheap labor. Initially, on this basis, economic growth is ensured, then mechanisms for changing proportions, but the most effective structural changes are achieved when using sources of national wealth.
This, as noted above, revealed the need to create conditions not for the economic growth of an inefficient structure, but for real innovative growth and development, which involves improving the structural quality of economic system and expanding its capabilities in terms of innovation; the expediency of the relationship between science, business and state to solve existing problems.
If the economy remains based on raw materials, then economic growth will never be able to turn into economic progress. If the economy becomes technological but does not expand, economic growth will be impossible. The problem of quality remains the main economic problem. This is especially important, since the comparative advantage that determines national competitive advantages is now being formed. As noted above, the real and effective implementation of many projects does not depend on the amount of investment (invested money), but on the quality and efficiency of the management system.
It is expedient to optimize the public spending more effectively. It is not just the direction of money as a resource. That is important the return on them. Effective innovation processes should be iterative, which ensures that promising ideas are quickly developed in practice. Unsuccessful ideas are discarded too. The full development of innovative technologies' sector is hampered by foreign manufacturers that occupy a leading position in the technology market.
Now most of the oil and gas equipment is imported from abroad. As a result, millions USA dollars are being invested in foreign machine-building complexes' development, while the domestic engineering industry of Azerbaijan does not have the subsidies to develop, stimulate and regulate production. The process of artificially limiting production at domestic enterprises is underway.
Customers are focused on the purchase of imported equipment and specialized design institutes do not have the funds to design the new modern models of equipment either to maintain the existing potential. There are difficulties with the sale of manufactured products. It is advisable to carry out a product leadership strategy that promotes an innovative way of economic development. The main elements of this strategy are: high quality, market leadership, penetration into new markets.
The task of the state is to ensure the sustainability of the industrialization process through the implementation of an appropriate consistent policy. Increasing economic complexity is impossible without setting real priorities for growth and development. State policy should be built, highlighting a range of priority areas, concentrating resources on them, while moving towards the innovative stage of economic development through attracting investments that carry modern technologies that, in combination with qualified personnel and scientific, technical and technological developments, can relatively quickly ensure the competitiveness and self-sufficiency of the economy.
Increasing the level of investment in the economy will allow moving from a factor-driven stage to an investment-driven stage. Public investment promotes structural adjustment, growth and development in order to accelerate the process of economic transformation, achieve sustainability without reducing social contributions.
The direction of investments by state and private sector in certain priorities, coupled with the creation of new and development of existing industries, contributes to the restructuring and restructuring of Azerbaijan industry. The emphasis on real priorities, agricultural sector's strengthening, infrastructure, alternative energy contribute to the direction of business in real priorities determined by state. This was a consequence of the fact that business directed its efforts only to where there was greater profitability, taking into account government support.
Therefore, it is advisable to correctly balance the efforts of state and business, which creating conditions for transition to the investment stage of growth and development. It is important to constantly increase the labor productivity in existing industries by improving the quality of products, giving them new consumer properties, improving manufacturing technology or increasing production efficiency. It is important to develop the ability to compete. The strategic objective is:
> real, not endless attraction of investments;
> solution of those tasks that can push the economy to development and increase its budgetary security;
> formation of system of goals, the achievement of which is in the hands of the regional authorities.
Важны меры экономической политики по повышению производительности и поиск баланса между технологической интеграцией и инвестициями в человеческий капитал. Развитие по трем направлениям: управленческий потенциал (управленческая культура, качество управления, эффективность мотивирования), ресурсы (ресурсный потенциал, финансовый потенциал, взаимодействие с инвесторами), результаты (качество продукции, рыночная позиция, инновационная эффективность).
Economic policies to increase productivity are important. It is necessary to find a balance between technological integration and investment in human capital. Development is possible in three areas: managerial potential (management culture, management quality, motivation efficiency), resources (resource potential, financial potential, interaction with investors), results (product quality, market position, innovative efficiency).
Table 1.
Monetary and financial statistics of former USSR countries, (%) [3]
2015 2016 2017 2018 2019 2020 2021
Azerbaijan -36.29 22.12 6.93 7.81 23.31 14.69 31.28
Belarus 14.88 1.84 56.57 20.29 9.36 21.70 12.70
Georgia 9.93 27.98 8.06 14.81 13.44 20.83 -3.64
Kazakhstan 39.16 8.67 7.25 20.12 3.64 41.84 -
Kyrgyzstan 9.50 34.32 12.51 0.21 14.29 27.50 8.84
Moldova 7.10 12.08 11.18 17.73 7.56 18.76 3.43
Russian Federation 16.22 5.85 9.09 16.84 15.95 21.72 30.71
Tajikistan 16.02 71.07 20.95 7.01 20.12 20.30 -
Uzbekistan 34.82 22.45 44.86 -1.87 17.76 15.44 28.28
Ukraine 0.84 13.56 4.58 9.21 9.57 24.82 11.16
Source: https://data.imf.org/regular.aspx?key=63087883 monetary and financial statistics by indicator.
As can be seen from Table 1., the policy pursued contributed to the improvement of Azerbaijan's position from a minus value (-36.29%) to positive share - 31.28%, in Russia (16.22/30.71) and Ukraine (0.84/11.16) against the background of a deterioration in the situation in Belarus (14.88/12.70), Georgia (9.93/-3.64), Kyrgyzstan (9.50/8.84), Moldova (7.10/3.43) and Uzbekistan (34.82/28.28).
Any competition leads to the development of an economy that produces new objects of competition. This will help improve the current situation in the economy, reduce economic inequality, improve security in the country and real implementation of the set priorities.
Table 2.
Rating of former USSR countries in the world (2021) [4]
Countries Security Economics Index/place 2015г. Index/place 2016г. Index/place 2020г. Index/place 2021г.
Azerbaijan 6.4 4.7 77.3/80 76.3/81 71.3/78 75.1/71
Belarus 5.6 5.1 75.6/87 73.9/92 65.8/103 68.0/98
Georgia 5.6 5.7 79.3/70 78.9/72 71.2/81 72.6/79
Kazakhstan 4.0 5.5 68.3/100 66.5/113 59.8/117 61.2/116
Kyrgyzstan 6.2 7.1 82.2/62 81.1/64 73.9/73 76.4/68
Latvia 2.6 3.7 48.6/140 47.4/141 42.3/144 44.0/146
Lithuania 2.8 3.7 43.0/148 42.4/149 36.5/154 38.7/155
Moldova 5.1 5.9 73.0/96 73.2/93 66.0/101 67.0/103
Russian Federation 7.7 5.2 80.0/65 81.0/65 72.6/76 77.3/65
Tajikistan 5.7 6.3 83.4/57 83.8/57 75.5/66 75.1/72
Turkmenistan 5.1 4.1 77.5/78 76.0/83 69.1/91 68.2/97
Uzbekistan 6.2 5.4 85.4/51 83.5/60 69.0/92 72.0/80
Ukraine 6.7 6.8 76.3/84 75.5/85 73.1/74 69.8/92
Estonia 2.3 3.2 43.8/146 43.4/146 38.5/148 39.5/152
Source: https://nonews.co/directory/lists/countries/fragile-states-index.
As can be seen from Table 2., according to the index of weak states in the world, Azerbaijan occupies the middle places in the list (80 in 2015 and 71 in 2021). This is better than places of Kyrgyzstan in 2015 and in 2021 (62 and 68), Russian Federation (65 and 65), Tajikistan (57 and 72). Good positions have got Estonia (146 place in 2015 and 152 place in 2021), Latvia (140 and 146 places), Lithuania (148 and 155 places), Kazakhstan (100 and 116 places), Moldova (196 and 103). Despite the places taken by Azerbaijan in the list, the country's situation was complicated by military actions on the part of Armenia and the countries supporting it.
But, despite all the difficulties, Azerbaijan emerged victorious (an impeccable victory in 44 days, which became the object of study by many developed and developing countries of the world) on the political and economic arena, coupled with the solution of social problems, despite the presence of a large number of refugees. A systematically pursued economic and social policy, supported by real political achievements, is helping to improve the current situation. Crises are used by developed countries as an effective tool for managing the world economy, military conflicts are one of the elements of economic competition (energy and food prices).
Labor productivity provides an estimate of GDP labor cost levels and growth rates over time. Thus, providing general information on the effectiveness and quality of human capital in the production process for a given economic and social context, including other complementary resources and innovations. used in production.
Thus, GDP per hour worked (GDP at constant 2017 prices in international dollars on manufactures personnel) in 2021 was: Estonia - $42.0, Latvia - $33.9, Lithuania - $41.0, Russia -$30.3, Kazakhstan - $29.5, Belarus - $21.8, Turkmenistan - $19.6, Georgia - $16.8, Azerbaijan -$15.8, Ukraine - $15.8 $, Moldova - $14.4, Uzbekistan - $9.2, Tajikistan - $8.0, Kyrgyzstan - $7.1. The level of working poverty in Georgia is 3.0, in Tajikistan it is 1.0, in Turkmenistan it is 1.0, in Uzbekistan it is 7.0, and in other countries it is zero [5]. The importance of International Labor Organization (ILO) in strengthening the country's capacity to produce well-paid labor is growing.
In developed countries, poverty is associated with unemployment. Therefore, it is important to expand employment opportunities and raise the incomes of the working poor. (Employment share by economic class in 2021 with the lowest economic class based on the World Bank's international poverty line of $1.90 per day [5].
Table 3.
Labor force participation rate in the countries of the former USSR
Countries 2015 2016 2017 2018 2019 2020 2021
Azerbaijan 65.5 66.3 66.6 66.8 66.5 62.8 63.8
Belarus 64.0 64.4 64.4 64.5 64.3 64.0 63.7
Georgia 68.8 68.4 66.2 63.9 67.1 59.3 58.9
Kazakhstan 70.9 70.1 69.2 70.1 70.1 69.2 69.1
Kyrgyzstan 62.4 61.5 60.1 58.8 58.6 55.9 56.5
Latvia 60.1 60.4 60.8 61.4 61.2 61.7 60.1
Lithunia 59.2 60.3 60.6 61.5 62.1 62.6 62.1
Moldova 44.5 44.8 42.2 37.3 42.3 40.3 38.6
Russian 62.6 62.8 62.8 62.9 62.2 61.9 61.4
Federation
Tajikistan 42.3 42.4 41.8 41.3 40.9 40.5 40.3
Turkmenistan
Uzbekistan 60.3 60.0 59.8 59.5 59.3 57.6 57.7
Ukraine 56.3 56.3 56.3 56.3 56.3 55.1 55.1
Estonia 62.1 62.9 63.7 63.8 63.6 63.6 70.2
Source: https://ilostat.ilo.org/topics/labour-costs/
Thus, the level of participation in the labor force has improved in Lithuania (in 2021 - 62.1 against in 2015 - 59.2), in Estonia (2021 - 70.2 against 2015 - 62.1). In other countries, despite the same undulating trend, in relation to 2015 the situation worsened. Thus, in Azerbaijan there was a decrease from 65.5% in 2015 to 63.8% in 2021, in Belarus from 64.0% to 63.7%, in Georgia from 68.8% to 58.9%, in Kazakhstan from 70.9% to 69.1%, in Kyrgyzstan from 62.4% to 56.5%, in Moldova from 44.5% to 38.6 %, in Russian Federation from 62.6% to 61.4%, in Tajikistan from 42.3% to 40.3%, in Uzbekistan from 60.3% to 57.7%, in Ukraine from 56.3% to 55.1%, respectively.
In the ratio of employment and population in 2021 was equal to 52.1% in Azerbaijan, in Belarus
- 67.5%, in Georgia - 41.1%, in Kazakhstan - 65.9%, in Kyrgyzstan - 55.9%, in Moldova - 38.8%, in Russia - 58.4%, in Uzbekistan - 53.2%, in Ukraine - 49.9%, in Estonia - 59.3% [5].
Employed in agriculture in 2020 was equal to 36.3% in Azerbaijan, in Belarus - 10.9%, in Georgia - 19.8%, in Kazakhstan - 13.5%, in Kyrgyzstan - 17.2%, in Moldova - 21.1%, in Russia -6.0%, in Tajikistan - 39.5%, in Uzbekistan - 26.2%, in Ukraine - 15.4%, in Estonia - 3.0%. As you can see, a larger percentage of employed people had been in agriculture sector of Azerbaijan.
The share of agriculture sector in structure of national economy in 2020 has equal to: in Azerbaijan - 7.6%, in Belarus - 7.8%, in Georgia - 8.4%, in Kazakhstan - 5.8%, in Kyrgyzstan -14.6%, in Latvia - 4.6%, in Lithuania - 3.6%, in Moldova - 11.0%, in Russia - 4.1%, in Tajikistan -24.9%, in Turkmenistan - 11.4%, in Uzbekistan - 27.3%, in Ukraine - 1.8%, in Estonia - 2.5%. Employed in industry in 2020 has equal to: in Azerbaijan - 14.6%, in Belarus - 30.6%, in Georgia -18.2%, in Kazakhstan - 249%, in Kyrgyzstan - 26.2%, in Moldova - 21.8%, in Russia - 26.5%, in Tajikistan - 45.8%, in Uzbekistan - 23.2%, in Ukraine - 24.3%, in Estonia - 29.1%.
In 2020 industry sector in structure of economy has equal to: in Azerbaijan - 37.1%, in Belarus
- 29.2%, in Georgia - 15.8%, in Kazakhstan - 28.9%, in Kyrgyzstan - 22.9%, in Latvia - 15.4%, in Lithuania - 20.5%, in Moldova - 15.9%, in Russia - 26.6%, in Tajikistan - 19.1%, in Turkmenistan -38.7%, in Uzbekistan - 27.6%, in Ukraine - 21.0%, in Estonia - 19.2%. At the same time in 2020 the share of employed personnel in service sectors has equal to: in Azerbaijan - 49.0%, in Belarus -58.5%, in Georgia - 61.9%, in Kazakhstan - 74.1%, in Kyrgyzstan - 56.6%, in Moldova - 57.1%, in Russia - 67.5%, in Tajikistan - 15.5%, in Uzbekistan - 50.6%, in Ukraine - 60.3%, in Estonia - 67.9%.
Services in structure of economy in 2020 was equal to: in Azerbaijan - 22.8%, in Belarus -30.5%, in Georgia - 40.4%, in Kazakhstan - 30.6%, in Kyrgyzstan - 28.9%, in Latvia - 44.2%, in
Lithuania - 34.5%, in Moldova - 33.3%, in Russia - 37.5%, in Tajikistan - 20.1%, in Turkmenistan -29.6%, in Uzbekistan - 24.6%, in Ukraine - 34.8%, in Estonia - 43.4%.
Export share in 2020 was: in Azerbaijan - 35.7%, in Belarus - 61.9%, in Georgia - 37.4%, in Kazakhstan - 30.2%, in Kyrgyzstan - 31.3%, in Latvia - 60.3%, in Lithuania - 73.5%, in Moldova -26.5%, in Russia - 25.5%, in Tajikistan - 17.5%, in Turkmenistan - 74.2%, in Uzbekistan - 263%, in Ukraine - 39.0%, in Estonia - 71.2%. The share of managers, specialists and technicians in 2020 was equal to: in Azerbaijan - 23.1%, in Belarus - 41.0%, in Georgia - 33.6%, in Kazakhstan - 36.9%, in Kyrgyzstan - 19.7%, in Moldova - 31.1%, in Russia - 45.9 %, in Tajikistan - 38.7(, in Uzbekistan -20.0%, in Ukraine - 37.6%, in Estonia - 48.1% [6].
Economic development is a process of economic growth based on the growth of production capacities in the country, that is, the ability to transform its production activities. The existing low production capabilities and extraction of natural resources, coupled with cheap labor, do not create a solid and real basis for real economic growth and development, since technical, technological, organizational and managerial changes underlie economic growth and development. Emerging innovations are important in setting technological priorities in those industries where it is combined with a quality component.
The state is carrying out a technological restructuring, but the process of transferring these enterprises to the private sector continues, which implies the transfer of all finances to the private sector. This complicates the process of control and implementation of structural changes. To improve the efficiency of state asset management, it is important to introduce strategic planning, which gives a clear forecast and guidelines for corporations and businesses to determine their strategies based on a common development line. From the point of view of the economic efficiency of the development of the public sector, the problem is the inefficient system of state property management.
Increasing spending on education, health care, training and retraining of personnel, support for small business is not just the state's contribution to social development. This is, first of all, a condition for increasing labor productivity, the development of high technologies and economic growth in general, integration into the world economy not only of raw materials industries, but also technologically advanced manufacturing industries, state support in various forms of priority sectors of the economy.
The government is carrying out many managerial, organizational, social and economic changes in order to improve the situation of the population. The social orientation of budget expenditures is being strengthened. (See Table 4.)
Table 4.
Distribution of budgetary funds of Azerbaijan in thousand AZN and in %
Budget expenditures In thousand AZN в %%
2020 2021 2020 2021
Total: 26416.3 27412.4 100 100
General government services 3533.0 3974.0 13.4 14.5
Protection, national security 3755.1 4541.6 14.2 16.6
Court, defense, prosecutor's office 1826.2 203.3 6.9 7.4
Education 2774.3 3092.2 10.5 11.3
Healthcare 1687.6 1378.6 6.4 5.0
Social protection and welfare 3112.6 3164.2 11.8 11.6
Culture, information, sport 342.0 372.1 1.3 1.4
Housing and communal services 245.7 217.3 0.9 0.8
Agriculture 862.2 910.4 3.3 3.3
Environment 240.6 246.0 0.9 0.9
Economy activity 5545.6 5500.6 21.0 20.1
Services not included in the main departments 291.4 1982.4 1.1 7.2
Source: [7]
As can be seen from Table 4., the structure of Azerbaijan's budget expenditures (% of total expenditures) has the following focus: public administration and law enforcement, defense is the strengthening of the state 38.5%, education, health, culture, science, information and physical education, social sphere - these are social expenses 29.3%. The data show that it is expedient to strengthen the social orientation of the development of the state in order to achieve sustainable economic growth and development. Budget expenditures are characterized by relatively large expenditures on defense and slightly smaller expenditures on the social sphere, that is, on education, social payments and health care, and culture.
Social spending tends to increase with overall spending. "Power" spending, on the contrary, is still a priority in budget policy, and this is natural for the current period of development, since without it would be impossible to win the war in 44 days and liberate the occupied lands. Power index of countries with categories ranging from military power and finances to logistical capabilities and geography (the lower the number, the better):
Russian Federation has got the 2nd place (0.0501), Ukraine - 22nd place (0.3266), Belarus -52nd place (0.8124), Uzbekistan - 55th place (0.8272), Azerbaijan - 63rd place (1.0251), Kazakhstan
- 64th place (1.0615), Turkmenistan - 83rd place (1.6728), Lithuania - 85th place (1.7083), Georgia
- 88th place (2.0014), Kyrgyzstan - 90th place (2.2011), Moldova - 94th place (2.2515), Latvia - 95th place (2.2758), Estonia - 108th place (2.6527), Tajikistan - 111th place (2.7163) [8]. Usually had observed the power spending supporting. There is an increase in spending on social contributions. The current policy contributes to the stabilization of the situation on the world energy markets and contributes to the diversification of gas supplies to Europe. The Azerbaijanian development model testifies to the strengthening of political and diplomatic position of country, to financial independence.
It is important to find the "golden mean" in choosing the direction of the country's development. The way out of this situation is not catching up development, but the formation of new directions of development, taking into account the concentration of intellectual capital. Therefore, Azerbaijan Government defines the transition to an innovative development path as a target setting that contributes to increasing the country's competitiveness. This is important, since the secret of any "economic miracle" lies in the correct choice and implementation of development priorities that contribute to the next wave of economic growth for the chosen national economic development model. Based on the above, the authors consider a model of innovative development under the auspices of the state, which will include the following characteristic features:
> due to the strengthening of globalization process, regionalization, the emergence of world technological leaders, it indicates the expediency of state support not only at the stage of inception, but also subsequently, provided that the situation does not become more complicated. Now there is no mass culture of entrepreneurship that promotes the development and implementation of new production technologies. This situation has developed due to the presence of a low level of a full-fledged innovation market. Modern technologies have become complex and large-scale, and small business structures cannot implement them, which requires the presence of large corporations with state support in order to turn them into global leaders in their respective industries. Competitive processes have embraced low-tech sectors of economy (shops, restaurants, construction, tourism, etc.). It is important to diversify into high-tech industries (microelectronics, biotechnology, shipbuilding, etc.), which will determine the future development of the country;
> GDP growth, GDP growth per capita, GFCF, GFCF per capita are qualitative indicators of economic growth and development of the country. The recent economic crisis has shown that it is necessary to change the approach to measuring development indicators. Traditional macroeconomic indicators such as GDP do not meet modern requirements, and their use can lead to the persistence and exacerbation of the existing negative social, environmental and economic trends. If, when planning the country's economic development for the long term,
the deformation of human capital and the depletion of natural capital are not taken into account, then such development will not be sustainable;
> Economic growth must be faster than the leading economies that the country is targeting in order to close its gap. A backward structure (an inefficient structure of the domestic economy, in which the basic part falls on the raw materials and service sector) will not ensure long-term economic growth;
> An important initial methodological principle is the use of qualitative factors that ensure the introduction of the latest achievements of science, new possibilities of knowledge. It is not just innovations and qualifications of personnel that are important, but their rational correlation, which, given the systemic state of investment resources, contributes to obtaining additional synergistic effects from their use. Modern economic growth is characterized by the leading importance of scientific, technical and technological progress and the intellectualization of the main factors of production. A characteristic feature of modern economic growth has been the transition to a continuous innovation process in management practice [10];
> Under the current conditions, the dynamic development of economy is formed due to inertial (preservation of the structural parameters of the previous development) and transformational (a sharp change in the existing structure of sectoral output and the nature of the dynamics of the main components of GDP) factors. Both factors are at work [9]. In modern conditions, the main factor in intensifying economic growth is the strengthening of the role of the innovative component of the economy, which complements the existing growth factors. Insignificant investments can lead to large profits, as the development of the innovative component gives a synergistic impetus to other industries. The full development of the sector of innovative technologies is hampered by foreign manufacturers that occupy a leading position in the technology market. This problem is closely related to the problem that hinders the development of exports of innovative products and services from the country. The main prerequisite for the transition is a change in the relative efficiency of borrowing and innovation;
> The lack of development of the innovation sector is the low demand for innovative products and services from the state and business. Activation of the impact of the state on the economic development of the country will contribute to the process of optimizing the structure of production in order to ensure the efficiency of the functioning of economic systems;
> State policy should be built, highlighting a range of priority areas, focusing resources on them, while moving towards the innovative stage of economic development through attracting investments that carry modern technologies that, in combination with qualified personnel and scientific and technical developments, can relatively quickly ensure the competitiveness and self-sufficiency of the economy. An expedient model of the economy based on innovation with progressive inequality, a focus on growth with development, due to the transition to a new qualitative state. Carrying out and real implementation of this will contribute to increasing the competitiveness of not only industry, but the entire economy, strengthening not only the economic, but also the political position of the country.
LITERATURE
1. Lenin V.I. Imperialism as the highest stage of capitalism" 1916. https://www.litres.ru/vladimir-lenin/imperializm-kak-vysshaya-stadiya-kapitalizma/Chitat-onlayn/
2. London J. Iron heel. Astrel Publishing House, 2012. /ISBN: 978-5-271-39034-0, 320 p. (p.14) -https://www.labirint.ru/books/330889/
3. https://data.imf.org/regular.aspx?key=63087883 - monetary and financial statistics by indicator
4. https://nonews.co/directory/lists/countries/fragile-states-index
5. https://ilostat.ilo.org/topics/labour-costs/
6. https://be5.biz/makroekonomika/profile/ru
7. Finance. Baku, State Statistic Committee, 2021.
8. https://nonews.co/directory/lists/countries/global-firepower
9. Abasova S.H., Yuzbashiyeva G.Z. Innovations and Investments like as Providing Sources of Economic Growth in Azerbaijan in Pandemic Conditions (CPSLR 2021), Atlantis Press, 02, 2022 -https://www.atlantis-press.com/proceedings/ispc-cpslr-21/articles
10. Yuzbashiyeva G.Z., Yuzbashiyev I.H. State such as investor of innovative changing: experience of Azerbaijan. Scientific conference "System "Science-Technologies-Innovations": methodology, experiences, perspectives". Center for System analysis and strategic research of the National Academy of Sciences of Belarus.22-23 September 2022. Minsk 2022. p.6. - www.basnet.by
