Sustainable Growth Path Research Articles

The Role of Technology and Automation in Streamlining Business Processes and Productivity for SMEs

Purpose: This research investigates the vital role of automation in enhancing business process efficiency and overall productivity within SMEs. It also discusses how technology can help overcome bottlenecks arising from human operation, resource limitation, and operational inefficiency, which have commonly been experienced by SMEs. Materials and Methods: The study combines an extensive review of existing literature with case studies from various industries to evaluate the effects of automation tools on SME operations. These tools range from cloud-based solutions to AI-powered systems, providing insights into their impact across different business processes. Findings: Research has shown that automation improves productivity in SMEs by up to 30%, reduces manual errors by 25%, and enhances data accuracy by improving employee focus on strategic tasks. In addition, the standardization of processes through automation ensures less variability in output. Automation also impacts customer experience positively by ensuring speed in service delivery and quality improvement in products. High upfront costs, however, combined with a shortage in skilled personnel and integrating new technologies with existing systems, remain barriers to wider adoption by SMEs. Implications to Theory, Practice and Policy: Accordingly, the study recommends that the following measures be taken to counteract the problems posed: phase in automation, cooperate with technology providers who will devise cost-effective solutions, and invest in comprehensive training programs to fill the skills gap. Government incentives, such as tax breaks and subsidies, could also push SMEs toward broader automation. Thereafter, successful integration of automation will enhance the competitiveness of SMEs and create a sustainable growth path in the digital economy.

Barriers and opportunities of the circular economy in small and medium enterprises: a systematic review of the literature

This study aimed to present a portrait of studies on Circular Economy (CE) in Small and Medium-sized Companies (SMEs), from 2011 to 2021, referring to articles published in Scopus database journals. To this end, a systematic literature review (RSL) was developed, which collected a sample of 141 articles, which, after being evaluated, resulted in a total of 25 studies to be investigated, falling within the scope of this proposal. The main results show that the connections between the subjects are increasing, confirming that the implementation of CE aimed at SMEs has become a relevant issue that requires scientific deepening. There is a greater incidence of economic and political barriers, emphasizing the lack of financial resources combined with the lack of incentives for industries. The research contributes by exploring the concept of CE, taking into account current discussions on the subject. It is important that the barriers that inhibit the application of CE are overcome, that a model is properly designed and joint and strategic actions are implemented. The suggestion for future research involves the creation of a theoretical framework that articulates the identified elements and serves as a basis for SMEs, translating the transition as a path of sustainable organizational growth.

Towards sustainable growth paths for work integration social enterprises in the circular economy

An important presumed social impact of the circular economy (CE) is job-creation for vulnerable groups. This creates opportunities for Work Integration Social Enterprises (WISEs), which are established to organize economic activities for workers with a distance to the labour market. In this paper, we identify challenges, opportunities, and sustainability aspects for WISEs in the CE. We apply Computable General Equilibrium (CGE) model results and conduct 20 expert interviews, providing an empirical contribution to recent research agendas on the social impact of the CE and the role of WISEs in Circular Societies. Our results show that WISEs should not take job-creating opportunities of the CE for granted, most specifically in the business-to-business (B2B) markets they are active in. While WISEs conceive competitive advantages to perform core CE jobs, they need to develop organisational capabilities to convert this potential into high added value activities within regionally embedded circular value chains. When identifying conditions for sustainable growth paths, we reveal a strong interconnectedness between social, environmental, and economic dimensions. We recommend management professionals and policy makers to measure, validate, and communicate social and circularity outcomes and invest in partnerships along value chains and across policy domains.

Political Economy of Tax and Digital Transformations in Pakistan (Special Invited Lecture)

1. THE NEED FOR A COORDINATED TAX AND SUSTAINABLE GROWTH STRATEGY I The 1985 National Tax Reform Commission (NTC) recommended a coordinated set of policies on tax policy, administration, and digital transformation to take the tax/GDP ratio from around 14 percent as it was then, to 20 percent by 1990, to underpin a sustainable growth path. The interim report of the NTC called the CBR “the most corrupt of Pakistani institutions.” The final report paid a great deal of attention to the interrelationships between tax evasion, smuggling and corruption. 1 The report emphasised a coordinated approach to reforming all taxes and administration, and that a tax-by-tax approach with tax administration determined separately would not do. Unfortunately, the report was shelved as Pakistan extracted geographic rents from the war against the Soviets in Afghanistan. While the NTC could not have imagined that the tax/GDP ratio would decline after three decades of interactions and support from the IFIs, that the country would find itself on the brink of default consequently, or the depths to which rent-seeking and corruption might plumb. A coordinated approach to multilevel tax policy and administration should also address key political economy challenges if Pakistan is to overcome the current economic crisis and move towards resilient and sustainable growth in the medium term. This is especially critical given the unprecedented “perfect storm” of the pandemic, climate shocks and once in a century floods, and ongoing disruptions in global value chains. The contrast with India is striking. With a general government tax/GDP ratio well above “the tipping point” of around 15 percent, India has been able to run a greater general deficit and much higher overall debt level than Pakistan (see Table 1 and Chart 1), without running into a potential debt crisis. It is important to stress that India by a Constitutional Amendment to harmonise the VAT across subnational jurisdictions has begun to address faults inherited from the pernicious 1935 Government of India Act, that still influences revenue assignments in Pakistan. The increasing geo-political importance of India, and the country’s greater resilience and attractiveness for FDI provide important contrasts and lessons for policy makers in Pakistan.

The role of shadow banking towards a sustainable growth path

This paper utilizes data from 26 countries to document the relationship between renewable energy consumption, shadow banking, traditional banking, and economic growth covering 2010–2021. Employing panel quantile approaches, the results indicate a negative and significant impact of renewable energy consumption on economic growth, highlighting the initial high costs inherent in transitioning to renewable energy sources. Moreover, the findings reveal that shadow banking, along with traditional banking, tends to weaken the negative impacts of renewable energy consumption on economic growth, particularly in countries with medium and high levels of economic development. Finally, panel causality tests confirm bidirectional causality between economic growth and renewable energy consumption, economic growth and shadow banking, and renewable energy consumption and shadow banking. These insights underscore the need for policymakers to consider the role of alternative financing mechanisms in the transition to renewable energy.

Analysis of the Insurance Applicant's Obligation of Truthful Disclosure

Since China implemented the reform and opening-up policy in 1978, the insurance industry has gradually embarked on a path of sustained growth and development. In 2001, China joined the World Trade Organization, ushering in an unprecedented era of expansion and diversification in the insurance industry. Against the backdrop of increasing public risk awareness, insurance has become an important tool for individuals seeking to mitigate potential losses in their risk efforts. However, this trend has also raised concerns about the ethical and legal responsibilities of insurance companies. A common dissatisfaction expressed by policyholders is that there is a difference between the optimistic description of insurance products during the sales process and the refusal of claims for false reasons after risks occur. This phenomenon has raised doubts about the true disclosure obligations of insurance companies under the Insurance Law and the necessity of improving transparency and accountability in insurance transactions. This study aims to delve deeper into this complex issue by examining the legal framework of policyholders' true disclosure obligations under the context of insurance contracts. By doing so, it seeks to contribute to the ongoing legal reform discussions within the insurance industry, with the ultimate goal of promoting a more fair, transparent, and harmonious insurance ecosystem that benefits all stakeholders.

Impact of trade and investment on income surge in Bangladesh: Evidence from trade liberalization regime

Trade and investment are crucial drivers of economic growth. Successful execution of trade and investment policy can elevate a developing country to a sustained growth path and make it self‐reliant. Bangladesh implemented a trade liberalization policy in the 1980s, deviating much from its conservative trade policy. This article assesses the impacts of trade, investment in physical as well as human capital, and a few trade policy variables on income surge for the liberalized regime. The econometric analysis finds that export, import, and domestic investment stimulate income. The impact of foreign investment is not conducive. Public spending on education also contributes to the income surge. Among the policy variables, trade openness and currency depreciation produce a beneficial impact. Population growth retards economic growth. The baseline results hold in the estimations involving several specifications of variables and testified as robust. The article views that a comprehensive approach to trade and investment policy would ensure the comparative advantage of trade and the well‐being of Bangladesh.

Determinants of Kuwait long‐run and short‐run economic growth

AbstractThis paper examined the relationship between growth and its demand side determinants in Kuwait from 1970 to 2020. A set of autoregressive distributed lag models were applied to estimate the long‐ and short‐run relationships between economic growth and its determinants. The results suggest that exports, gross fixed capital formation (investment), imports and household spending exhibit a long‐run relationship with economic growth. While exports, gross fixed capital formation, share of government spending in GDP and household spending exhibit short‐run relationship with growth. Moreover, the results suggest that long‐ and short‐run economic growth in Kuwait is mainly driven by exports and to a lesser extent household spending. As Kuwaiti exports are dominated by oil exports and oil production is limited to the organisation of petroleum exporting countries quota this limits the policy makers from the most effective tool to stimulate growth. In this context Kuwait needs to enact policies to diversify exports, build a local industrial base, utilise imports to feed into non‐oil export sectors, direct investment spending to develop non‐oil industries and encourage FDI to facilitate innovation and technology transfers and spill overs to progress from a volatile oil‐based economy to a more diversified and sustainable growth path.

Delivering E-governance services in Bangladesh through Libraries and Information Centers: Realities, Challenges and Possibilities

Bangladesh is trying to achieve Smart Bangladesh Vision 2041 to put the country on a new, sustainable path of growth while also serving as a role model for other developing nations. With that goal in mind, the government is trying to introduce e-governance services in every government sector. This study looks into user perspectives, obstacles, and suggestions for offering e-governance services through libraries and information centres. A proposed e-governance service delivery model for public libraries is also presented in this paper.

Economic Growth in the Age of Ubiquitous Threats: How Global Risks are Reshaping Growth Theory

Abstract One of the most outstanding accomplishments of the economic science over the last decades is the development of a sound and coherent theory of economic growth. Research in growth theory has demonstrated that significant and systematic increases in well-being are attainable whenever the right formula is implemented. When combined with efficiency, the ingredients of this formula – innovation, the diffusion of ideas, and human capital accumulation – can drive the economy toward a virtuous path of sustained growth. Notwithstanding, this is an overly optimistic view of growth that does not account for the many obstacles that the creation of wealth may encounter. The current essay surveys cutting-edge research on growth theory to conclude in favor of a paradigm shift: the main concern is no longer just with how to correctly combine production inputs, but with how their efficient use is eventually hampered by a large collection of worldwide risks and threats. Global risks come in many shapes (they can be classified as economic, environmental, geopolitical, societal, and technological) but, in any case, they call for a reexamination of growth theory.

Analysis of Factors That Have Hampered Economic Growth in Italy

Italy's economic growth since 1990 faced domestic challenges, including structural issues, tax evasion, bureaucratic inefficiencies, and political corruption. Externally, as an EU member and participant in global economic forums, Italy's fiscal policy constraints and the need for a comprehensive strategy to foster economic development are evident. This article employs a multifaceted research approach to analyze the economic development of Italy in 1990. First, the documentary analysis includes a comprehensive review of the academic literature of various economists, the historical record of Italy and Europe, and the study of national institutions to understand the economic situation at that time. In addition, quantitative data analysis was conducted using economic indicators such as GDP, unemployment rate, and investment and trade data. These data were statistically analyzed to identify trends and implications for the development of the Italian economy. A combination of literature and data analysis methods were used to comprehensively analyze Italy's economic development since 1990 and to provide an overall understanding of both internal and external factors that influenced its economic development. Finally come out with recommendations for Italy's economic development that will help it to develop effective policies and strategies that will lead to a more sustainable path of economic growth.

Технологическое развитие и производительность труда: региональная проекция

Taking into account the current economic agenda, returning to a path of sustainable growth is a fundamentally relevant issue. One of the key drivers may be increased labor productivity. However, regional differences in the dynamics of scientific and technological potential may hinder the achievement of this goal. The article provides a comparative analysis of the dynamics of labor productivity and the models of technological development demonstrated by Russian regions for the period 2010–2020. To take into account regional heterogeneity, the country’s regions were grouped into four groups according to two dimensions – the level oflabor productivity and the level of scientific and technological development. It was found that the growth of labor productivity in different groups of regions was accompanied by different combinations of capital-labor dynamics, changes in innovative and absorptive abilities, and production efficiency. The results of the study also indicate the priorities of regional scientific, technical and industrial policy: 1) support for the growth of capital-labor ratio in developed and developing regions; 2) for developing regions with high scientific and technical potential – priority areas of support should be related to increasing innovative capabilities, and for low ones – with stimulating increased production efficiency.

Resource scarcity, circular economy and the energy rebound: A macro-evolutionary input-output model

We propose an Agent-Based Stock-Flow Consistent model combined with a simplified Input-Output (IO) structure of production. In the model, heterogeneous firms interact in the energy, material, capital and consumption markets. Materials for production of consumer goods can be manufactured using non-renewable or recycled material inputs. We examine the conditions under which the circular economy emerges through market mechanisms, as well as it can be a source of the rebound effect. An important novelty of our approach is that recycling and mining sectors employ different types of capital for production. Capital goods (machinery) are produced by capital firms, which constantly engage in innovations to improve their technological features. This way we endogenize changes in technological coefficients of the Input-Output tables. We show that sectoral interdependencies along the value chain can render the energy rebound effect due to the circular economy (CE) even if energy intensity of the recycling process is lower compared to mining. This effect depends on the impact of investment in the recycling sector on the aggregate demand and energy use along the entire value chain. We assess the role of macroeconomic policies, namely mission-oriented innovation policies (MOIPs), active fiscal policies (AFPs), and environmental taxes in fostering the CE transition, while mitigating the rebound effect. We find that the combination of MOIPs and active fiscal policy is the most effective in promoting the circular economy, preserving employment and ensuring a sustainable growth path.

Social capability and long-term sustained growth

Long-term growth is not a simple transition along the path of equilibrium growth, but a process of the interplay of technological, economic, institutional, and social factors. Social capability is an important prerequisite for late-developing countries to catch up with leading countries, and the combination of social capability and the technology gap co-determine the potential of a country to improve productivity through catching up. This paper clarifies the theoretical mechanism of social capability to promote economic growth, and reveals that accountability quality may become capability gap which impedes the convergence of economic growth of the low-income countries by analyzing the panel data from 166 countries over the period 1996–2019. This paper believes that with the rising income level, it is the general path of sustained economic growth to promote the modernization of economic structure while ensuring the supply of goods and effective social incentives.

Carbon dioxide emissions and the Environmental Kuznets Curve: evidence from the Association of Southeast Asian Nations.

We examined the relationship of carbon dioxide (CO2) emissions with real per capita GDP and energy consumption in the ASEAN region using panel data from 1960 to 2021. We employed various panel unit root tests (IPS, Fisher-ADF, Fisher-PP) and panel cointegration tests (Kao and Pedroni). We find robust empirical evidence supporting the validity of the Environmental Kuznets Curve hypothesis, suggesting the existence of a per capita income turning point (approximately USD 4,808.85) where CO2 emissions and real income begin to decouple. This suggests the presence of an environmentally sustainable economic growth path beyond this threshold. The study highlights the importance of a reduction of fossil fuel use and the adoption of coordinated strategic plans among ASEAN member states to reduce carbon dioxide emissions.

Indo-Russian Economic Engagement: Legacy Issues, Dynamic Shifts, and Possibilities for the Future

The economic relationship between India and Russia has been limited and faced various challenges historically. However, changing geopolitical and geoeconomic situations have created new opportunities while also presenting challenges and risks. This paper aims to analyse the legacy issues and dynamic shifts in international trade and order that are currently taking place. The article explores the ongoing transformation of Indo-Russian economic engagement and proposes possible means for moving forward. The existing advantages of both countries in the areas of trade and investment are also outlined.Assuming a resolution to the Russian Special Military Operation in Ukraine, the paper proposes an economic roadmap for continuing the recent momentum in the trade and economic relationship between Russia and India. The first step is to strengthen bilateral trade in existing priority export sectors of both countries. This can be followed by deeper cooperation in oil, civilian nuclear energy, and defence sectors. The introduction of rupee-rouble trade, even partially, could significantly boost these efforts. The paper also advocates for involving the private sector in these efforts by adopting a proactive approach by both governments.By combining immediate efforts with long-term geopolitical maneuvers on both sides and an early resolution of the Russian Special Military Operation in Ukraine, it is possible to push bilateral trade and investment levels onto a sustainable growth path in the future. The paper argues strongly for this approach.

The risks of the wrong climate policy for developing countries: Scenarios for South Africa

In this paper, a demand-driven growth model is used to explore climate change scenarios faced by the South African economy. The focus is on key macroeconomic variables including employment, productivity, income distribution, trade, and fiscal balances. Results show that emission reduction alone will not put South Africa on a sustainable and equitable growth path. Expansionary macroeconomic policies are necessary. We show that, under sufficient global mitigation, expansionary fiscal and monetary policies lead to faster output and productivity growth, higher employment, and lower inequality. By contrast, macroeconomic tightening or “free riding” on global emission reduction lead to inferior outcomes, putting sustainable development out of reach.

Toward a sustainable growth path in Arab economies: an extension of classical growth model

Background/ObjectivesMany economies are on the trajectory of alternative growth drivers other than conventional capital and labor. Access to credit facilities is a pertinent indicator of economic growth. In line with the United Nations Sustainable Development Goals (UNSDGs-8) agenda, the national goal for sustainable development for most economies and Arab economies is no exception. Therefore, the current study adopts a traditional growth model by exploring the relationship between gross domestic product (GDP) per capita, credit for private sectors, ratio of exports, real GDP, and per labor force participants for selected Arab economies annually from 2001 to 2020.Research designThis study leverages the Fourier Kwiatkowski–Phillips–Schmidt–Shin (KPSS) unit root test and second-generation panel econometrics as estimation techniques, such as Westerlund and Edgerton panel cointegration test, and the use of two estimators, namely the augmented mean group (AMG) and common correlated error mean group (CCEMG), to obtain robust results.FindingsEmpirical findings from Westerlund and Edgerton panel cointegration tests validate the long-run equilibrium relationship among the outlined variables. Further empirical results indicate that the share of exports is negatively significant with economic growth in countries such as Kuwait, Lebanon, Tunisia, and Jordan. Additionally, savings and labor force participation have a positive relationship with economic growth in individual countries such as Algeria and Bahrain. As per the panel, there is no significant relationship between labor force participation and economic growth. This indicates that the skilled labor force enhanced economic growth.ConclusionsThese findings come with inherent far-reaching policy suggestions for economies and panels. Further details on country-specific policy actions are presented in the concluding section.Graphical

Foreign Portfolio Investment and Economic Growth in Malaysia

This study examines the relationship between foreign portfolio investment (FPI) and Malaysia’s economic performance. In particular, the study analyses the relationship between FPI and real gross domestic product (GDP) using the widely adopted Granger causality test and the more recent Toda and Yamamoto’s (1995) non-causality test to establish the direction of causation between the two variables. Similar method is also applied on the relationship between volatility of FPI and real GDP. Additionally, the study uses an innovation accounting by simulating variance decompositions and impulse response functions for further inferences. Using quarterly data covering the period from 1991 to 2006, the study finds evidence that economic growth causes changes in the FPI and its volatility and not vice versa.. The findings suggest that economic performance is the major pull factor in attracting FPI into the country. Thus, it must be ensured that the Malaysian economy remains on a healthy and sustainable growth path so as to maintain investor confidence in the economy. JEL classification: G15, C32, C12 Keywords: Foreign Portfolio Investment, Economic Growth, Granger Causality, Toda-Yamamoto Non-causality, Variance Decomposition

Economic growth, poverty traps and cycles: productive capacities versus inefficiencies

PurposeThe authors analyse a growth model to explain how economic fluctuations are primarily driven by productive capacities (i.e. capacity utilization driven by innovations and know-how) and productive inefficiencies.Design/methodology/approachThis study’s methodology consists of the combination of the economic growth model, à la Solow–Swan, with a sigmoidal production function (in capital), which may explain growth, poverty traps or fluctuations depending on the relative levels of inefficiencies, productive capacities or lack of know-how.FindingsThe authors show that economies may experience economic growth, poverty traps and/or fluctuations (i.e. cycles). Economic growth is reached when an economy experiences both a low level of inefficiencies and a high level of productive capacities while an economy falls into a poverty trap when there is a high level of inefficiencies in production. Instead, the economy gets in cycles when there is a large level of the lack of know-how and low levels of productive capacity.Originality/valueThe authors conclude that more capital per capita (greater savings and investment) and greater productive capacity (with less lack of know-how) are the economic policy keys for an economy being on the path of sustained economic growth.