INNOVATION, IMITATION AND ENTREPRENEURSHIP

Grace Li Ann Yong () and Kong Weng Ho ()
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Grace Li Ann Yong: Centre for Research in Pedagogy and Practice, National Institute of Education, 1 Nanyang Walk, Singapore 639798, Singapore

The Singapore Economic Review (SER), 2006, vol. 51, issue 02, 147-173

Abstract: This paper analyzes the gradual shift in the technological paradigm of an economy as it approaches the world technology frontier. The model developed in this paper consists of firms which employ skilled workers as an important input in technological advancement, but the novel feature here is the entrepreneur, who is the brain of technological progress. The entrepreneur has to decide to undertake either imitative or innovative activities, of which decision both affects and is affected by the country's distance to frontier. Specifically, the entrepreneur needs to have a minimum ability threshold level in order to carry out innovation. This endogenous threshold level falls as the economy moves closer to the technological frontier, enabling more entrepreneurs to be engaged in an innovation-based strategy, and consequently, moving the economy from a technological structure that is based on imitation of foreign technologies to one where domestic innovation dominates. The transitional dynamics of the model shows that there exists a steady state distance from the world frontier that countries will eventually converge to. We also find that it is possible for countries under certain conditions, to be trapped in a regime carrying out only imitation of world technologies.

Keywords: Technology diffusion; innovation; entrepreneurship; growth (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (18)

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Working Paper: Innovation, Imitation and Entrepreneurship (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:51:y:2006:i:02:n:s0217590806002378

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DOI: 10.1142/S0217590806002378

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