Learning, innovation, and economic development by latecomers

Learning and building capability for innovation has been recognized as a key binding constraint for economic development by latecomers, especially at the stage of middle income level. In particular, many countries in the South are stuck at the so-called middle income trap, which refer to growth slow-down of the middle income economies. Building innovation capabilities are not easy because it involves various issues, such as barriers associated with IPR protection by the North against imitation efforts by the South, and a limited space for industrial policy under the WTO regimes. Thus, latecomer economies are advised to take detours for capability building or to leapfrog into emerging technologies.