This paper summarises the arguments and counterarguments within the scientific discussion on the effects of R&D investment on the essential components of the economic development such as economic growth, competitiveness, labour market and inequality reduction. The main purpose of the research is to highlight the position of Bulgaria in the world economy concerning R&D development. In the article frame, the authors compared the R&D expenditures dynamics of Bulgaria and the EU28 by the prism of innovations in business and higher education. Systematisation literary sources and approaches for solving the problem indicated that R&D caused the changes in the job market that led to the necessity to adjust the university system. There is currently a lag. Methodological tools of this research were as follows: the method of processing quantitative data, content and comparative analyses, situational and sectoral analyses, and graphical dynamic analysis. The object of research is the dynamics of investments in innovations in Bulgaria and EU28. The emphasis is placed on the role of research centres, enterprises, clusters and education institutions in R&D development to assess the level of innovation achieved through R&D. The obtained results of an empirical analysis showed that the cluster approach raised R&D to a new level and helped to bring universities and business together. Rethinking of the public policies and investing in technology centres will help for the adaptation to the new realities of the labour market. The research results could be useful for employers, high tech research centres and universities. This study is expected to be the base for further studies dedicated to boosting economic competitiveness and social welfare due to the promoting implementation of innovations. Keywords competitiveness, economic growth, inequality, innovation, labour market, Research and development (R&D).