Transformation of Human Capital as a Driver of Innovative Economy

Abstract

The purpose of this study was to identify key factors that have a significant impact on the level of high-tech production in the region and the development of human capital in seven countries of the Caucasus and Central Asia. A comprehensive literature analysis was carried out to achieve this goal, including data from several countries of the Caucasus and Central Asia, including demographic data, education levels, labor market indicators, health indicators, and research activities. The authors constructed a model of multiple spatial regression, including seven spatial objects and a 5-time series. A qualitative model of cumulative panel regression without signs of multicollinearity was obtained as a result of the step-by-step elimination of collinear and nonessential variables. The results of the study revealed three key factors that are closely and directly related to the level of production of high-tech products. Two relate to the education sector – "the number of university graduates in the field of science and technology", and "the number of researchers per 1 million inhabitants" and one indicator characterizes the labor market – "the employment level in the economy". The authors did not identify a close relationship between the level of high-tech production and economic factors, such as cost and productivity, which contradicts the results of other research and requires more careful study. The results of the research can be useful in the development of measures to promote human capital and innovation policy of the countries of the Caucasus and Central Asia.

Received: 7 September 2023 / Accepted: 19 October 2023 / Published: 5 November 2023