Bridging innovation system research and development studies: challenges and research opportunities

Abstract

This paper links innovation system analysis to economic development. Both fields are young and interdisciplinary. The origins of research on innovation systems goes back to the early 1980s (Freeman 1982, Lundvall 1985, Freeman 1987) although it links to several predecessors such as Babbage (1832, 3rd edition), List (1941) or Marshall (1965). Development economics, on the other hand, took off in the 1940s (Rosenstein-Rodan 1943) but, since then, it has been going through so many dramatic changes that yet cannot be characterised as a ‘mature’ field. In the recent years, particularly in the framework of Globelics, there has been a renewed interest on applying the innovation system concept in developing countries. However, some critical questions remained unanswered: Is innovation system a useful concept for understanding and explaining what goes on in a developing country? Can it be used as a tool and a framework for agents and agencies in charge of designing public policy and business innovation strategies? The assumption behind this paper is that we can answer a conditional ‘yes’ to both of these questions and in the first part of this paper we try to specify the conditions and we do so in a dialogue with critiques developed within the community of evolutionary and development scholars. Another important question is how the approach fits into the historical and current trends in development economics. In the second part of the paper we give a brief assessment of how development economics has evolved and we draw some lessons for a research strategy. We will argue that the crisis of the first generation of development economics that was represented by scholars such as Nurkse, Myrdal, Hirschman, Singer and Sen has left a void in development economics that cannot be filled neither by mainstream neoclassical economics nor by ‘new growth theory’. We see the innovation system approach as a serious candidate to fill this void. The paper is structured as follows. In the next section we review the concept of innovation system (in dialogue with other alternative concepts like national learning systems), the different forms of studying innovation systems and the critical dimensions to consider when studying innovation systems, particularly in developing countries. Section 3 reviews the recent evolution of Development Economics, pointing out to the main weakness of this discipline, particularly when it comes to the analysis of the factors underlying under-development. Section 4 proposes and discusses how innovation system research can contribute to development economics and vice-versa. The paper concludes highlighting the main research gaps in innovation systems and development and proposes a future research agenda in this topic.