Economic Analysis and Evaluation of the Dependence of Industrial Sectors on Innovation Potential

Abstract

In the industrial sector of the national economy, particularly within the manufacturing subsectors, engaging in the initial, intermediate, and final stages of the national innovation process, especially initiating the first stage requires courage and a high level of entrepreneurial risk. This entrepreneurial spirit must be especially strong in the machinery, equipment, food, and light industry subsectors, where ideas for the creation of new products, technologies, and services should form more rapidly. As this characteristic is most evident in the food production subsectors of Azerbaijan’s manufacturing industry, the econometric model based on the country’s official statistical data demonstrates statistically significant results, despite some variables showing low statistical significance. Overall, the model is statistically robust and satisfies the normality condition. The practical implication of the findings suggests that continued state investment policies in the food and machinery-equipment manufacturing subsectors could further enhance innovation potential in both areas. The proposed model also implies that the production of innovative food products and machinery based on local raw materials could become more cost-efficient while simultaneously improving quality indicators to meet modern domestic and international market demands.