A NEW THEORY OF ECONOMIC GROWTH: AN EVOLUTIONARY APPROACH

Аннотация

This article presents a new theory of economic growth. It integrates technological innovation, knowledge diffusion, institutional adaptability, sustainability, digital transformation and human capital development. It explores how economic policies can be adjusted to ensure long-term development in the contemporary world. It also provides additional insights on regulatory frameworks, global integration and financial system resilience. Keywords:economic growth, innovation, knowledge diffusion, institutional adaptability, sustainability, digital transformation, entrepreneurship, policy-making, global integration, technological progress, humancapital, financial resilience, infrastructure development. Economic growth is a fundamental concern for economists, policymakers, and researchers. Traditional models, such as those proposed by Adam Smith, Robert Solow, and Paul Romer, have laid the groundwork for understanding how economies expand. However, with rapid technological advancements, globalisation, and shifting market dynamics, a new theory of economicgrowth is needed toreflect contemporary economicrealities. 1. TheNew Theory's Core Principles The new theory of economic growth integrates complexity science, institutional economics and technological innovation. It emphasises endogenous innovation cycles. This theory challenges traditional models that view technological progress as exogenous. It posits that innovation is cyclical and arises from systemic interactions between firms, governments and consumers. These cycles create self-reinforcing mechanisms that sustain economic expansion over time. 2. Knowledge Diffusion and Network Effects Economic growth depends on the speed at which knowledge spreads across industries and nations. Technological knowledge, when effectively diffused, leads to exponential productivity gains and enhanced global competitiveness. 3. Institutional Adaptability Strong institutions that can evolve with market changes are critical to sustaining growth. Governments and regulatory bodies must maintain flexible policies that support technological advancement, entrepreneurship and financial stability. 4. Sustainability andInclusive Development Modern economies must consider environmental constraints and social equity when fostering long-term growth. Sustainable development requires integrating environmental policies with economicstrategies toensure balanced progress. 5. Digital Transformation as aCatalyst The role of artificial intelligence, blockchain, big data, and other digital technologies is fundamental in accelerating productivity and economic expansion. Digitalization reduces transaction costs, enhances efficiency, and creates new markets. 6. Human Capital Development Education, skills development and lifelong learning are vital for a competitive workforce. Investing inhuman capital leads to more resilient and sustainable economicgrowth. Implicationsfor Policyand Practice page869 INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE ISSN:2692-5206,ImpactFactor:12,23 AmericanAcademicpublishers,volume05,issue02,2025 Journal: https://www.academicpublishers.org/journals/index.php/ijai 1. Invest in education and R&D. Governments and private enterprises must fund research, education and skill development to sustain innovation. Invest in STEM education, vocational training and research institutions. 2. Regulatory Frameworks for Emerging Industries It is essential that policymakers create flexible regulations that adapt to technological breakthroughs. Regulatory sandboxes and innovation-friendly policies must be implemented to ensure that newindustries can flourish withoutexcessiveconstraints. 3. Encouraging Entrepreneurial Ecosystems It is vital to support startups and SMEs through financial incentives, business incubators, and infrastructure development. Reducing barriers to market entry is key to fostering creativity and economicdiversification. 4. Sustainability-Oriented Policies Economic models must integrate green technologies, renewable energy sources and circular economy principles to ensure long-term viability. Climate policies must align with economic growth strategies. 5. Global EconomicIntegration Enhancing international cooperation in knowledge-sharing, trade and technological exchange is vital for more resilient growth patterns. Participation in global supply chains and innovation networks strengthens economic competitiveness. 6. Invest in high-quality infrastructure. This means investing in transportation, telecommunications and digital connectivity. This is essential for enhancing economic productivityand innovation. 7. Make the financial system resilient. A well-functioning financial system is necessary for economic stability. It is vital to balance financial innovation with risk management. This will prevent crises whilefostering economicdynamism.