Do innovations stimulate employment growth in private firms?

For Uzbekistan experiencing a demographic gift phenomenon, the increased supply of workforce poses significant challenges for the Government to reap benefits from growing population and reach sustainable and inclusive economic growth. Using a sample of 46,405 firms from 30 countries in Europe and Central Asia region in World Bank Enterprise Survey data, we estimate the effect of innovations on employment growth in firms. Our preliminary results imply product and process innovations experienced by enterprises improves employment growth, the effect is even stronger in firms with higher growth rate. The positive employment effects of innovations in firms in Uzbekistan would improve the absorption of growing working-age population on condition that firms are provided with incentives to invest in product and process innovations