ESSENTIAL IMPORTANCE OF KNOWLEDGE IN NEW EXPLANATIONS OF KEY DRIVERS OF ECONOMIC GROWTH
Authors: Turanjanin Dragan , Cvetanović Slobodan 
Published: November 2022

Knowledge commercially valorized into innovation has always played an important role in economic, and more broadly in social development. It occurs in various forms of expression and can range from highly abstract to very applicative. It is understandable that there is a wide range of knowledge between the aforementioned extremes, but in general it can be stated that all forms of knowledge have a pronounced role in the technological and economic development of countries. With the development of globalization during the last decades, the claim that knowledge is of essential importance in starting economic growth has become especially relevant and is directly related to the affirmation of so-called. new growth theories. For theorists of this direction, the possibility of manifesting non-declining returns of production factors at the aggregate level is quite realistic, primarily due to the growing application of knowledge as the primary driver of economic growth. Also, one of the conceptual starting points for endogenous explanations for growth is the view that the increase in knowledge funds is the result of purposeful decisions of economic actors and not some spontaneous activity. Thus, at the heart of the new explanations of economic growth is the view that knowledge, thanks to the properties of the unlimited growth factor, has an essential significance in its generation. Pointing to the growing importance of market valorization of knowledge into applicable technological procedures in the process of generating economic progress of countries and regions, new explications of the physiology of economic growth created at the end of the previous century paved the way for the emergence of knowledge economy. The knowledge economy is formed and expanded thanks to the resource of knowledge when it is not possible to replace it with any other factor of production. Applied knowledge is commercially valorized in product and process innovations as well as in new forms and methods of organization and forms of production management in most economic sectors, and not only in those directly related to the development of information and communication technologies. The policy of innovation, which unites scientific, technological and industrial policy into a single whole, has become an unavoidable means of stimulating economic growth g great efforts to increase the innovation of the economy, especially in the implementation of their own economic and improving national competitiveness. Recent experience at the global level shows that countries are makindevelopment strategies. In general, these development strategies are based on the messages of the new growth theory, which is based on views on the decisive role of knowledge in shaping modern economic trends. The new theory of growth claims that technological progress is the result of economic activity. In previous explanations of growth, technology was taken for granted, not as the end result of market forces. The new growth theory seeks to internalize technology into a model of market functioning. She points out that, unlike physical objects, knowledge and technology are characterized by growing yields, which start the growth process. New explanations for growth recognize the essential importance of knowledge as a driver of economic dynamics. Since knowledge can be endlessly shared and reused, it can be accumulated without limitation. It is not subject to depreciation or reduction during use. Instead, increasing the income generated by the use of knowledge generates economic growth. The new growth theory helps to understand the current change from a resource-based economy to a knowledge-based economy. In other words, economic development that creates and disseminates knowledge is crucial for the growth of countries, communities and individual firms.