How progress the production relations in transition period into the innovation economics during post-industrialization period. How this process examining in growth theories. The knowledge factor, by “having been an increasing return” along the patent’ economic length, cause an increase in total factor productivity of the industries where the knowledge employed as an input. Knowledge by having been realized a higher marginal return compare to average return is a production factor with an increasing return. Since the knowledge input have been an increasing return, this characteristics of the factor brings it’s effect in production process dynamic. This structure of the knowledge factor creates increasing return in “production function”. Whether indicate adequate effect of this qualification of knowledge input respect to the attempt of emerging economies “rise from middle income trap” , and how? In this study, the subject analyzed within the concept of a developed model that based on “factor augmenting technologies” approach in the theory.
Middle income trap, growth theories, endogenous economic growth, factor augmenting technologies, escape competition effect, Schumpeterian effect. JEL Classification: O40, O41.