Elements needed for economy based on knowledge contributing for growth and development of the small and medium companies

In the framework of the contemporary theory of the economic sense, within the
scientific researches and debates the emphasize is more and more put on the analysis of the
link between knowledge, i.e. education and the research and innovation activities (as basic
institutional channels for generating and cumulating knowledge) and economic growth.
Knowledge, innovations and the human capital take central position within such analyses,
working as factor inputs which increase the activity of the whole economy creating the so
called invisible or untouchable capital. The basic competitive advantage of a modern
economy, or the so called economy based on knowledge is no longer the cheap labor or the
low taxes, nor the geostrategic position. It is the knowledge of workers, their creativity and
innovativeness, proactivity, the entrepreneur spirit and the expertise in defined areas. A
certain economy can be highly competitive and survive on the world market only by
continuous investing in the knowledge of its own citizens, in the education and the scientific
and research activities. In this paper, through the methods of induction and deduction,
analysis and synthesis, as well as historical and trendy comparative analysis, we have come
to generalized attitudes, conclusions and recommendations about the subject of research but
also about the applicability of these perceptions in the case of Republic of Macedonia. In this
context, the purpose of this paper is to determine the economic justifiability of investment in
human capital, to approbate the channels of influence of education and scientific and
research developmental activity on the creation of human capital and together with it on the
economic growth and development, to set the basic elements needed for economy based on
knowledge and to determine the interaction among education, innovation, and the small and
medium enterprises through the prism of thecost-benefitanalysis.
Keywords: education, scientific research activity, human capital, invisible capital