Below the radar: What does innovation in the Asian driver economies have to offer other low income economies?
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However pressing the distributional concerns of redressing inequality and overcoming poverty are in the short-run, in the long run meeting the development needs of humankind requires economic growth. This much is indisputable, although the composition of this growth - the weight given to different social and environmental parameters - is of course subject to contestation. Growth can arise from one or a combination of two different sources – an increase in the amount of investment applied to production (“extensive growth”), and an improvement in the quality of this investment (“intensive growth”). Most rapidly-growing economies draw on both the extensive and intensive margins. But, increasingly through the last three centuries, and inevitably even more so in the coming centuries as global resources are depleted, the focus of attention has been, and will be, placed on the intensive margin. And as we now have also realised, innovation and technological change lie at the centre of investment quality and therefore at the root of growth and development agendas. It was not always so. In the early part of the 20th century as far as most analysts were concerned, the capacity of economic systems to produce more over time simply took place. And if it was determined by anything it was by the rate of investment i.e. by the rate of addition to the stock of capital within the economic system under consideration. This tradition was placed in question by a remarkable study carried out in 1956. Using conventional comparative static techniques, Robert Solow (1957) attempted to provide a statistical explanation of the causes of US manufacturing growth over the period 1911- 56. He concluded that only around 12.5% of the observed growth of labour productivity (output per worker) over this period could be 'explained' by increments in the stock of capital, the remaining 87.5% being a 'residual' or an unexplained 'technological change' or ‘improvement in productivity'. What was significant about this study was that a major economic magnitude (the rate of economic growth) could not apparently be explained by the established causal variable. It was not so much the rate of investment that was important but rather the productivity of investment – and that remained unexplained. From that point on the growth agenda became one of identifying what these causal factors might be and clearly an important one was investment in science and technology.1 In turn of course issues of science policy then became strategic since science was concerned above all with the creation of new knowledge much of this presumably economically useful. The link with the agenda for underdevelopment was just as significant since underlying all international poverty and inequality were poor economic conditions. It was this above all that gave rise to the drafting of the Sussex Manifesto by a group of policy-oriented social scientists at the Science Policy Research Unit and the Institute of Development Studies at Sussex University (Singer et. al., 1970). The Sussex Manifesto (hereafter, SM) reflected best-practice thinking at the time, and has continued to frame (or perhaps reflect) the dominant mode of thinking about, and the patterns of organising science policy in, and for, low income economies. It is a model which overwhelmingly focuses on science and technology as the primary source of technological change and the historically high-income northern economies as the primary locus of new technology and innovation. It has also tended statistically to conflate S&T with R&D expenditure. However, in recent years there have been major structural changes in processes of innovation, and in thinking about innovation processes. Little of this has filtered through to the development community which continues to run on old tramlines. In this paper we briefly review the old model (Section 2) and then focus on the new currents of thinking and practice about innovation, so-called Mode 2 innovation (Section 3). This is followed in Section 4 by a discussion of a series of emerging and outlier trends in innovation in various global settings. These trends offer the possibility for developing economies of disrupting dominant power relations in innovation, and also of better meeting the needs of the poor. This leads us in Section 5 to identify the potentially key role played by an innovation surge in the Asian Driver economies, and its potential relevance to meeting developmental needs in other low income economies. In this final section we also note however some outstanding science policy questions and the importance of keeping these questions alive in policy debates.