Developing Countries and Innovation: Searching for a New Analytical Approach

Abstract

This article argues that the technological innovation is a contextual process whose relevance should be assessed depending on the socio-economic condition it is embedded in. Without this, technology-led economic policies (of Catch-Up varieties) are unlikely to meet the needs of most people, especially in countries where innovation and poverty reside side by side. We analyze micro-level account of the cognitive and socio-economic context within which innovations arise and argue that a process of real importance is being sidelined: the ability to innovate under 'scarcity' conditions. In this process, idiosyncratic innovative paths are followed, which we argue have been least theorized and which may provide solutions for urgent and otherwise unsolved problems. We sketch a scarcity-induced innovation framework to analyze such paths and provide a brief account of institutional aspects of planning and policy in this approach.

Keywords: Technological innovation, Development, Needs, Scarcity, Problem solving, Institutions

JEL Classification: O12, O25, O31, O33