Structural Change and Innovation as Exit Strategies from the Middle Income Trap

Marco Vivarelli ()

No 8148, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper is intended to provide an updated discussion on a series of issues that the relevant literature suggests to be crucial in dealing with the challenges a middle income country may encounter in its attempts to further catch-up a higher income status. In particular, the conventional economic wisdom – ranging from the Lewis-Kuznets model to the endogenous growth approach – will be contrasted with the Schumpeterian and evolutionary views pointing to the role of capabilities and knowledge, considered as key inputs to foster economic growth. Then, attention will be turned to structural change and innovation, trying to map – using the taxonomies put forward by the innovation literature – the concrete ways through which a middle income country can engage a technological catching-up, having in mind that developing countries are deeply involved into globalized markets where domestic innovation has to be complemented by the role played by international technological transfer. Among the ways how a middle income country can foster domestic innovation and structural change in terms of sectoral diversification and product differentiation, a recent stream of literature underscores the potentials of local innovative entrepreneurship, that will also be discussed bridging entrepreneurial studies with the development literature. Finally, the possible consequences of catching-up in terms of jobs and skills will be discussed.

Keywords: catching-up; structural change; globalization; capabilities; innovation; entrepreneurship (search for similar items in EconPapers)
JEL-codes: O14 O33 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2014-04
New Economics Papers: this item is included in nep-cse, nep-ent, nep-gro, nep-ino, nep-knm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published - published in: Economic Change and Restructuring , 2016, 49, 159-193

Downloads: (external link)
https://docs.iza.org/dp8148.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp8148

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().