Understanding absorptive capacities in an "innovation systems" context consequences for economic and employment growth

Rajneesh Narula

No 04-02, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro –level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation.

Keywords: New economy; absorptive capacity; knowledge (search for similar items in EconPapers)
JEL-codes: F21 O11 O31 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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Working Paper: Understanding absorptive capacities in an "innovation systems" context: consequences for economic and employment growth (2004)
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