Evaluating the Impact of Technological Innovation in Driving Economic Growth Across OECD Economies (2000–2025): An Econometric Analysis

Abstract

Irfan Saleem, Amos Sunday Iluromi and Arora Rashmi

This study examined the relationship between technological innovation and economic growth across the 38 OECD economies over a twenty-five-year period (2000–2025). Using a panel data framework, the research employs a Fixed Effects model with Driscoll-Kraay robust standard errors to account for cross-sectional dependence and heteroscedasticity. The empirical results reveal that R&D expenditure (β = 0.214, p < 0.01$) and human capital (β = 0.312, p < 0.01) are the primary drivers of Gross Domestic Product (GDP) per capita, while patent applications show a positive but more modest impact (β = 0.089). The findings highlight a "commercialization gap" and emphasize that technological advancements yield the highest economic returns when coupled with high levels of tertiary education. This research provides timely evidence for mission-oriented innovation policies in the post-AI transition era.

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