Chapter 15 Economic Growth Model Considering Innov...
We construct an economic growth accounting model that consists of human capital，material capital，innovation factor，energy factor，and estimate the elasticity of output factors in the 7provinces of east China during 2004—2014.We calculate the contribution rate of human capital，energy and other factors to the economic growth.Production factors of different regions or different industries have different growth flexibility.The most significant elements to the first and second industry growth are energy and material capital.Industrial growth did not jump out of the path dependence of extensive input.Shanghai and Jiangsu are two typical areas.Shanghai's growth is mainly dependent on material capital and energy.The growth pattern of Jiangsu depends on the diversity of elements and innovation.Jiangsu model is more adapted to the needs of the new normal economic growth.We construct economic growth simulation model based on system dynamics.The system simulation result shows that：the economic growth of the east China is mainly dependent on the material capital or energy input.Economic growth is still extensive.Accordingly，improving the optimal allocation of input factors and promoting the rational flow of input factors between regions，are beneficial to improve the output efficiency of the factors.
Figure 15-1shows the simulation system of economic growth in East China.This economic growth system is composed of 7provinces and cities'economic growth subsystem.Based on the analysis of economic theory and the result of data regression，the system dynamics model is more concise and clear.Different subsystems have their own characteristics.The subsystem needs different input elements.Economic growth in some areas depends on variety inputs.
Diversification of input factors can reduce the excessive dependence on a certain production factors.The positive effect of innovation elements can ensure the sustainability of growth.What impact will it have on the economic system by changing the input？System simulation can simulate the change of economic system.The system dynamics simulation model was built with Vensim 5 software.
Taking Shanghai ＆Jiangsu as examples to illustrate the variables in the subsystem：
（1）Total GDP of Shanghai（shanghai GDP）
（2）First industry growth rate of Shanghai（shanghai GDP1gr）
（3）Second industry growth rate of Shanghai（shanghai GDP2gr）
（4）Third industry growth rate of Shanghai（shanghai GDP3gr）
Figure 15-1 The simulation system of economic growth in East China
（5）First industry output value of Shanghai（shg1）
（6）Second industry output value of Shanghai（shg2）
（7）Third industry output value of Shanghai（shg3）
（8）Material capital growth rate of Shanghai（shanghai K）
（9）Energy consumption growth rate of Shanghai（shanghai E）
（10）Advanced human capital growth rate of Shanghai（shanghai H3）
（11）Medium human capital growth rate of Jiangsu（jiangsu H2）
（12）Primary human capital growth rate of Jiangsu（jiangsu H1）
（13）Technical progress rate of Jiangsu（jiangsu T）
The research takes the average value of the relevant data from 2004to 2014as the initial value of the model.The error between the simulated data and the original data is 10.73%.The simulation model can reproduce the economic growth system.Data simulation process：Increase the growth rate of an input element with fixed values for other variables.Compare the effects of different factors to the total GDP in East China.
The simulation data of GDP showed in Figure 15-2.
Figure 15-2 The simulation data of GDP
The effect of factor indicates that the economic growth in East China mainly depends on the input of energy and material capital.Energy and material capital investment is suitable for the current economic system in East China.East China's economic growth is still extensive.It is difficult for innovation to play the leading role in the growth of the existing economic system.Obviously，we should construct a ecosystem for the innovation of all kinds of innovation groups.In practice，we can solve the problem with the multi-lever-perspective（Figure 15-3 MLP hierarchy framework）.
Figure 15-3 MLP hierarchy framework
Innovation groups share interaction，fusion to achieve symbiotic sharing of the formation of expansion.Sharing platform enters the next stage of competition through innovation.Combining with the above analysis，we construct the ecological hierarchy model（Figure 15-4Innovation ecological hierarchy model）.
Figure 15-4 Innovation ecological hierarchy model
Within the innovation ecosystem，the three levels affect each other.The sustainable development of social economy requires the change of medium system and micro system.Health evolution of medium system and micro system lead to promote the realization of macro demand.Technology development is a direct exogenous variable that affects the evolution of niche innovation groups.Therefore，the factors affecting the development of the technology，such as technical support，system regulation and the establishment of mutual trust system，are the driving variables to promote the evolution of niche health.