The role of research and development in economic development of the countries

The cost of research and development and technology improvement result in cost decrease, productivity improvement and export growth. New Technologies cause enhancement in production factors and create further variations in productions. Furthermore, technologies create changes in comparative cost of production, and increase the comparative advantages in corporations and ultimately in the countries. Research, development and innovation costs, and new technologies allow corporations to improve their production abilities; thus resulting in capacity growth, cost reduction, quality improvement, and timely delivery. Unique characteristics of Innovation and new ideas are not challengeable. For example, achievements in a new method, will give others easier access, without causing interruptions to the previous users. Therefore, such products are produced once and can be mass-produced then after. In this article, the importance of research and development in the growth of value added through an endogenous growth is explained. While revising Romer's endogenous model of growth, a mathematic model for Iran's economic growth was made and the effects of R&D, spillovers resulted from R&D, labor force, physical capital and human resource based on OLS was evaluated. While considering the effects of innovation management in R&D improvement, other effects of innovation management were also analyzed. This article intends to analyze the effects of R&D throughout the country and innovation management within corporations to obtain economic growth.