Innovation Policy for Development: an Overview

Manuel Trajtenberg

No 275698, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: This paper provides a framework for thinking about innovation policies for development; it does so by flashing up the key issues which arise in this context, and by examining in detail the case of innovation policy in Israel. A few premises guide the analysis: First, innovation for development should be construed as a broad notion that includes widely distributed innovations of all stripes, both in products and in processes, generated by rank and file workers as much as by R&D labs. Second, the economic rationale for government support of R&D needs to be adapted to the economic environment of developing countries; the notion of spillovers should be reexamined in view of globalization, and the same goes for the working of “General Purpose Technologies” (GPTs). The Israeli economy offers a fascinating illustration of extraordinary success in innovation, particularly in ICT, yet the benefits from the High Tech sector eluded the rest of the economy, giving rise to a “dual economy” and slow growth for the economy as a whole. Understanding this outcome provides valuable insights for the design of growth-promoting innovation policies. Lastly, the paper discusses the policy corollaries that emerge from the analysis, and in particular the main levers which innovation policies for development should act upon: skills formation, provision of incentives, access to information, and availability of finance.

Keywords: Financial Economics; International Development (search for similar items in EconPapers)
Pages: 39
Date: 2006-07
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Related works:
Chapter: Innovation Policy for Development: An Overview (2009)
Working Paper: Innovation Policy for Development: an Overview (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275698

DOI: 10.22004/ag.econ.275698

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