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Directions of changes occurring in the world econom y in recent years show the transformation of the industrial economy into a knowledge-based ec onomy, using the technological and innovative potential. This transformation has highlig ted the competitive advantages of countries and regions specializing in the production of hightech products. A lot of research has been trying to find out what the drivers of innovat ion really are, though there has not formed one consensus. The aim of the paper is to investiga te nfluence of research and development (R&D) expenditure on economic growth in EU member st ates and to assess whether there is a significant relationship between countries’ R&D ef forts and their innovation and between innovation and per capita income, as postulated by R&D based endogenous growth models. Basic source of data is Eurostat database and Europe an Innovation Scoreboard reports. Results confirm positive and statistically significan t impact of government R&D expenditure, which is the main driver for economic growth during the analysed period. Highly developed countries are conducting research to seek new sourc es of innovativeness and methods for creating innovative potential. The results also sugges t that the EU countries that do not have effective R&D sectors seem to promote their innovati on hrough technology spillovers from other countries.

DILEMMAS OF THE CREATION OF INNOVATION POLICY IN MEMBER STATES