Innovation and Catching-Up

If we extend the perspective to the most recent decades, as we will do in this chapter, this diversity in strategies applied and performance becomes even more striking

Jan Fagerberg; Manuel M. Godinho

2009

Scholarcy highlights

  • The history of capitalism from the industrial revolution onwards is one of increasing differences in productivity and living conditions across different parts of the globe
  • 250 years ago the difference in income or productivity per head between the richest and poorest country in the world was approximately 5:1, today this difference has increased to 400:1. In spite of this long run trends towards divergence in productivity and income, there are many examples of backward countries that – at different times – have managed to defy the trend by narrowing the gap in productivity and income between themselves and the frontier countries, that is, by “catching up”. How did they do it? What was the role of innovation and diffusion in the process? These are among the questions that we are going to discuss in this chapter
  • If we extend the perspective to the most recent decades, as we will do in this chapter, this diversity in strategies applied and performance becomes even more striking
  • In the middle we find the remaining European and Latin-American countries joined by two Asian economies, Hong Kong and Japan
  • At the very bottom we find three potential “caching-up” countries with a very dismal performance, Philippines, Argentine and Mexico, which “fall behind” rather than “catch up”, to use the terminology suggested by Abramovitz
  • As List before him, that these efforts may be seen as an attempt by the present economic and technological leaders to “kick away the ladder” their own countries used to arrive at their present levels of development
  • An extensive treatment of the role of firms in catching-up processes is beyond the scope of this essay, we will try to emphasize a few points that we believe may be useful for further work.13 Research on the role of firms in innovation and long run economic change commonly stress that, in most cases, firms only have imperfect knowledge on the relevant options in front of them, and that they tend to be myopic, searching in the neighbourhood of their existing competence for relevant information, suggestions and solutions

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