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Export Competitiveness: Innovation

  Innovation and Quality

- Papers - Case Studies- Websites

Translating research foundation into economically productive commercial applications remains a critical missing link in many developing countries. A country’s ability to develop new technologies increases its ability to understand and adopt new technologies from abroad. Yet, the adoption of new technology via trade, FDI, or licensing is neither guaranteed nor cost free. Countries need to invest in developing firm-level learning capacity or ensure adequate investment on research and development (R&D).

There is a role for public policies for building institutions for the support of commercial innovation that are export-relevant. In order to be effective and save market distortions, such institutional designs should aim to immunize the intervention from interference by political cronyism and corruption. Government interventions need to be carefully designed to stimulate markets for private risk capital so as not to crowd out investment from within the market.

Further opening to trade and FDI might allow enterprises to gain more from global knowledge flows. While intervening on business enabling environment, regulations on technology transfer should be specifically liberalized so as to widen the scope for reducing barriers to technology licensing contracts. Technology licensing is a key channel of domestic and global knowledge absorption, yet is underused in many developing countries. The governments should also consider strengthening infrastructure for technology licensing including through the possible creation of technology acquisition funds.


Public Financial Support for Commercial Innovation
Author:  Itzhak Goldberg, Manuel Trajtenberg, Adam Jaffe, et al
Europeand Central Asia Chief Economist’s Regional Working Paper Series, Vol.1, no.1, January 2006, Private and Financial Sector Development Department (ECSPF), the World Bank

This report focuses on the rationale, instruments (primarily financial instruments, such as matching grants and VC), and institutional requisites for effective public support for commercial innovation. The study provides a theoretical framework for examining the rationale for public participation in funding of private industrial R&D and commercialization of innovative ideas.

Technology, Adaptations, and Exports: How Some Developing Countries Got it Right

Author: Vandana Chandra

Source:   PREM Economic Policy, 2006, the World Bank


Due to lack of incentive, expertise, information and other resources, it is hard for individual firms in developing countries to adapt new technologies, and therefore to improve their competitiveness. In such cases, governments can make a significant contribution to growth by encouraging or enabling the private sector to seek, acquire, adapt, and deploy modern technologies of production. This article provides in depth discussion about this topic. 

Strategies for Regional Information Systems: Learning Transfer and Applications

Author: Philip Cook, Olga Memedovic,

Source:  United Nations Industrial Development Organization


This paper explains the concept of regional innovation systems. It argues that global economic forces have raised the profile of regions and regional governance not least because of the rise to prominence of regional and local business clusters as vehicles for global and national economic competitiveness. A combination of public and private governance at regional level to promote systemic innovation is advocated.

Technological Capabilities and Industrialization

Author: Sanjaya Lall

Source:  World Development, Vol. 20, No. 2, pp. 165-186,1992.

This paper set out a simple framework for explaining the growth of national capabilities, which is based on the interplay of incentives, capabilities and institutions. Market failure will harm the technological capabilities, and therefore corrective intervention is necessary. Based on the experience of some industrializing countries, it is concluded that interventions, carefully and selectively applied, are necessary for industrial success.
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"Market-Stimulating" Technology Policies in Developing Countries: A Framework with Examples from East Asia

Author:  Sanjaya Lall

Source:  World Development Vol. 26, No. 8, pp. 1369-1385, 1998

Based upon evolutionary approaches and drawing upon Asian development strategies, the author analyzed the concept of “market stimulating technology policies” and proposes an analytical framework for technology development. The paper suggests that strategic choices are involved at all stages that cannot be resolved entirely by recourse to free markets.
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On Technology Policy and Its Institutional Frame

Author:  V., V. Bhatt

Source:   World Development, Vol. 3, No. 9, September 1975, pp. 651-663

This is a discussion of some of the institutional aspects of technology policy. Technical Consultancy Service Centres (TCSCs) is necessary for identifying specific technology gaps and devise suitable technology policy. TCSCs’ functioning should be organically related with the tasks of the development banks. International centers are essential for diffusion of appropriate technology, and for solving certain difficult core technology problems.
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Transfer of Technology to Developing Countries: Unilateral and Multilateral Policy Options

Author:  Bernard M. Hoekman, Keith E. Maskus, Kamal Saggi

Source:  World Development Vol. 33, No. 10, pp. 1587–1602, 2005

This paper analyzes national and international policy options to encourage the international transfer of technology, distinguishing between four major channels of such transfer: trade in products, trade in knowledge and technology, foreign direct investment, and intra-national and international movement of people.
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  Case Studies
Fundacion Chile: 29 Years Innovating

Source: Fundacion Chile


This is a brief retrospect about Fundación Chile, a privately owned, non-profit institution created in 1976 through an agreement between the Government of Chile and ITT Corporation. The mission of Fundacion Chile is to add economic value to Chile’s products and services by promoting innovation and technology transfer activities, aimed at taking better advantage of Chile’s natural resources and productive capacity.

Scottish Diaspora: Building Networks as Economic Development Interventions

Author: Mairi MacRae

Source: GlobalScot


Globalscot is an international business network of over 900 senior influential business leaders who are committed to generating opportunities for Scotland. Globalscot invests in developing global relationships; accessing world class business knowledge and expertise and growing a resource to advance Scotland’s economic development

Mauritius Country Economic Memorandum: Managing Change in a Changing World
Source: Africa Region Macro-economies I, January 29, 2007, the World Bank

Chapter 4 of this report introduced the National Innovation System (NIS) of Mautitius, which is designed to promote interactions among firms, academic institutions, public and private research facilities, and legal, design, consultancy and financial support services. Many of the components of Mautitius’ NIS are capable and well managed and carry out their mandates effectively. Some have achieved international renown.

Unleashing India's Innovation
Author: Mark A. Dutz
Source: The World Bank

The book discusses the actions that strengthen India’s innovation environment, enhance productivity growth, and reduce poverty. A vast array of areas are covered, ranging from India’s broader economic and institutional regime—with a priority on promoting stronger competition among enterprises to unleash innovation—to more specific areas, such as R&D, FDI and grassroots innovation.

  Web sites
World Bank: Innovation Initiative - Latin America and the Caribbean
World Bank: Science, Technology and Innovation Initiative
World Bank Initiative: Knowledge for Development
Innovation in Israel

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