Innovation in emerging economies

New research sheds light on factors that affect innovation in emerging markets.

A recent National Bureau of Economic Research (NBER) working paper sheds light on the relationship between innovation and globalization in emerging economies. One of the researchers' interesting conclusions: In an emerging market, one factor that induces local firms to innovate is involvement with multinational corporations -- whether through supplying them domestically or by exporting or importing.

Yuiry Gorodnichenko, Jan Svejnar and Katherine Terrell analyzed existing survey data from 27 "transition" economies in Central and Eastern Europe and the former Soviet Union.  The researchers used a quite broad definition of innovation (on the theory that, in developing economies, innovation may involve some form of imitation, such as adopting an existing technology). Developing or upgrading a product, acquiring new technology or obtaining a new quality accreditation like an ISO certification all qualified as innovation for this study.  The study had a number of findings -- including that innovation rates by local firms were not affected by having a higher proportion of skilled workers, but that companies with more university-educated workers were more likely to innovate.

1 Comment On: Innovation in emerging economies

  • suresh10in | January 12, 2009

    It has been suggested here that innovations in emerging economy firms are largely the result of linkages with multinational enterprises as a result of globalisation.This is not entirely true from my experience because there is a shift in production,investment and market flows which is culturally dependent and contingent on the structure -environment inter phase.Sometimes cyclical processes inherent in the economical and technological dynamics on its own causes a shift in focus from the west to the east or north to the south. This could have hastened the liberalisation and globalisation processes,but not due to it.Otherwise one cannot explain the sudden transformation taking place in respect of countries like India and to a certain extent China,since these countries have developed the base or endogenous capacity to reap the benefits whatever from globalisation,since they had systems that matured to that level and facilitate interactions influenced by environment through their structure to evidence the influence of the techno-economic as well as culture specific cyclical process.In fact opening up their markets had deleterious efffects in the case f Latin American countries earlier,and elsewhere recently,until they earned the maturity based on the cyclical polity,in terms of economic and technological cycles.The internal dynamics merely found an external expression and even molded or mounted the globalisation processes as such.
    SURESHKUMAR,SCIENTIST ADVISOR,NIIST,CSIR

Add a comment