Innovation-Driven Labour Productivity Growth: Empirical Evidence from Developing Economies

Innovation is widely recognised as a fundamental engine of economic growth and productivity enhancement. In the context of developing economies, where there is the existence of structural challenges and dynamic opportunities, innovation plays a crucial role in transforming production processes and improving the productivity of the workforce. This study investigates the relationship between innovation indicators and labour productivity in developing economies, including China, India, Brazil, Thailand and Indonesia. Recognising the challenges and opportunities these countries face, the research provides a comparative analysis to identify key factors influencing labour productivity growth through innovation. This research employs a quantitative approach, utilising data from the World Bank, the International Labour Organisation, and various national statistical agencies. Using panel data analysis covering the period from 2007 to 2022, the study evaluates the impact of key innovation indicators, such as R&D expenditure, patent filings and technological adoption, on Labour productivity growth across the selected developing nations. The empirical results show the importance of innovation determinants in enhancing the value added by workers in the economy’s production process. The findings highlight the varying pace and effectiveness of innovation-driven growth in productivity among the countries studied and offer insights into the key drivers of innovation for enhancing labour productivity. The policy recommendations include targeted investments in education and skills training, fostering a conducive regulatory environment for innovation, and improving investment in the R&D sector to drive growth in labour productivity. These strategies are essential for enabling sustained productivity growth and inclusive economic development in the developing world.