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Innovation Policy and Development in the ICT Paradigm: Regional and Theoretical Perspectives

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  • Kalvet, Tarmo

Abstract

Innovation policy forms a foundation, and probably the most important one, of economic development in any society, especially in today’s society driven by information and communication technologies (ICT). The Schumpeterian processes of creative destruction need stewardship – creative destruction management – and this paper aims to explore some key aspects of innovation policies from the perspective of the current ICT paradigm. The basic feature of the latter is the trend towards globalisation, towards facilitation of heterogeneity, diversity, and adaptability, which leads to market segmentation and niche proliferation as well as to production disaggregation and segment relocation. Analysis of innovation policies of the Central and Eastern European (CEE) countries shows that their current national innovation system based innovation policies are lacking several crucial features. First, one of the central arguments of creative-destruction management is paradigm-based, activity-specific priority-setting, but such wide-scale selection mechanisms have been and are still missing, and currently innovation policies by themselves can not lead to economic restructuring. Second, the whole concept of innovation systems has to a large extent focused on activities related to the production and use of codified scientific and technical knowledge leading to the situation where existing policies have essentially nothing to do with the average companies. Third, the current paradigm is characterised by globalised and open financial markets which, in case of the CEE countries, have enforced speculative economic growth, fuelled by domestic consumption and based on foreign borrowing. Finally, while the state is generally considered an important factor influencing how concrete innovation systems develop, linkages to policymaking itself and administrative capacities are quite missing and need to be revived, including the reconsideration of governance.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19387.

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Date of creation: 2009
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Handle: RePEc:pra:mprapa:19387

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Keywords: innovation; economic development; innovation policy; ICT Paradigm; open innovation; governance; dissertations;

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  1. Luc Soete, 2007. "From Industrial to Innovation Policy," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 273-284, December.
  2. Edler, Jakob & Georghiou, Luke, 2007. "Public procurement and innovation--Resurrecting the demand side," Research Policy, Elsevier, vol. 36(7), pages 949-963, September.
  3. Jan Fagerberg, 2003. "Innovation: A Guide to the Literature," Working Papers on Innovation Studies 20031012, Centre for Technology, Innovation and Culture, University of Oslo.
  4. Chaminade, Cristina & Edquist, Charles, 2005. "From theory to practice: the use of systems of innovation approach in innovation policy," CIRCLE Electronic Working Papers 2005/2, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  5. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  6. Bianchi, Milo & Henrekson, Magnus, 2005. "Is Neoclassical Economics still Entrepreneurless?," Working Paper Series in Economics and Finance 584, Stockholm School of Economics, revised 02 Feb 2005.
  7. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
  8. Karl Aiginger, 2007. "Industrial Policy: A Dying Breed or A Re-emerging Phoenix," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 297-323, December.
  9. Chang, Ha-Joon, 1993. "The Political Economy of Industrial Policy in Korea," Cambridge Journal of Economics, Oxford University Press, vol. 17(2), pages 131-57, June.
  10. Erik S. Reinert & Rainer Kattel, 2007. "European Eastern Enlargement as Europe's Attempted Economic Suicide?," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 14, TUT Ragnar Nurkse School of Innovation and Governance.
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