Innovation and Growth: A Schumpeterian Model of Innovation Applied to Taiwan

Haider Khan ()

Oxford Development Studies, 2002, vol. 30, issue 3, 289-306

Abstract: Following Schumpeter, we assume that innovation in specific firms, or groups of firms, can have economy-wide effects. Models based on this idea can be shown to have multiple equilibria. The idea of a positive feedback loop innovation system, or POLIS, is formalized by picking an appropriate sequence of equilibria over time. It is shown that POLIS has empirical relevance by applying the formal model to an actual economy. The 1997-98 financial crisis in many Asian countries, most notably South Korea, seemed to have reversed the conventional wisdom regarding the "East Asian miracle". This paper applies the concept of a POLIS to the case of Taiwan to show that, at least in this case, neither the view that the miracle was a mirage nor the view that the growth was a result of factor accumulation only is correct. Ultimately, technological transformation--in particular the creation of a positive feedback loop innovation system--is what makes the difference between sustained growth and gradual or sudden decline. Although problems remain in both the real and the financial sectors, the successes of Taiwan in building the preconditions for an innovation system are worth examining. Upon careful examination of Taiwan's system of innovation within the above Schumpeterian model it is found that Taiwan has a fighting chance of building a POLIS in the near future.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/1360081022000012707 (text/html)
Access to full text is restricted to subscribers.

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:taf:oxdevs:v:30:y:2002:i:3:p:289-306

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CODS20

DOI: 10.1080/1360081022000012707

Access Statistics for this article

Oxford Development Studies is currently edited by Jo Boyce and Frances Stewart

More articles in Oxford Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().