Innovation Policy
436 Pages

Innovation Policy


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Innovation in all its forms, particularly technological innovation, has become a crucial driver of growth, enhancing competitiveness and increasing social well-being in all economies of the world. In a broad and diversified sense, innovation comprises not only the creation of new technology, but even more important, it includes the diffusion and use of products, processes, and practices that are new in a given country context. Inspired by the experiences of both industrial and developing countries, this book focuses on the needs and issues of the latter.
Aiming at creating a climate in which innovative initiatives can multiply and flourish, innovation policy, by its very nature, touches such diverse policy areas as education and training, skills development, science and research, the business environment, information and communication technology, and other infrastructure. Adopting this interdepartmental perspective, this guidebook presents, in detail, the actions required in such a varied set of policy areas that typically work in silos. It offers also insights on the implementation of innovation policies in the difficult contexts of low and medium income countries characterized by the resistance of innovation systems to significant improvements.
'Innovation Policy: A Guide for Developing Countries' is geared toward the policy-making community. This large group includes not only those who deal directly with technology, industry, science, and education but also those in charge of finance and economics. Indeed, it includes the top government leadership, which plays a crucial role in successful innovation policies.



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Published 25 May 2010
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EAN13 9780821382691
Language English
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Innovation Policy
A Guide for Developing CountriesInnovation PolicyInnovation Policy
A Guide for Developing
Countries2010 The International Bank for Reconstruction and Development / The World Bank
1818 H Street, NW
Washington, DC 20433
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This volume is a product of the staff of the International Bank for Reconstruction and
Development / The World Bank. The findings, interpretations, and conclusions expressed in this
volume do not necessarily reflect the views of the Executive Directors of The World Bank or the
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ISBN: 978-0-8213-8269-1
eISBN: 978-0-8213-8301-8
DOI: 10.1596/978-0-8213-8269-1
Cover images (clockwise from far left): © Monty Rakusen/cultura/Corbis; © E.O. Hoppé/Corbis;
© Tim Pannell/Corbis; © Juice Images/Corbis; © Tony Metaxas/Asia Images/Corbis; © Tim Pannell/
Library of Congress Cataloging-in-Publication Data
Innovation policy : a guide for developing countries.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-8213-8269-1 — ISBN 978-0-8213-8301-8 (electronic)
1. Technological innovations—Developing countries. 2. Technology—Economic
aspects—Developing countries. I. World Bank.
HC79.T4I5472 2010
Foreword xv
Preface xvii
Abbreviations xix
Overview 1
Why? The Innovation Imperative 1hat? The Government as a Gardener 2
How? A Pragmatic Agenda 3hat Is Innovation? 4
Policy Concept 5olicy Functions 11olicy Implementation 17
Conclusion 22
Notes 24
References 24
Introduction 25
Innovation, Did You Say? 25
What Is This Book About? 27
Part I Policy Concept 29
1 Why Promote Innovation? The Key to Economic,
Social, and Environmental Progress 31
Innovation and Societies: The Long-Term View 32
Technology and Economic Growth 38nnovation and Emerging Economies 43
Dissemination of Technology 46
New Global Perspectives 48
vvi Contents
Notes 50
References and Other Resources 51
2 How to Promote Innovation: Policy Principles 53
Take a Broad View of Innovation 54
Adopt a “Whole-of-Government” Approach 54
Create a Receptive and Mobilizing Environment 60
Put Efficient Institutions and Instruments in Place 65
Adapt to Societal Specificities 67
Policy Conclusions for Developing Countries 68
Notes 69
References 70
Part II Policy Functions 71
3 Supporting Innovators 73
Provision of Business Services 74
Entrepreneurship and New Innovating Firms 83
Finance for New and Innovative Firms 89
Bridging Institutions: Clusters and Networks 93
Conclusions 102
Notes 103
References and Other Resources 104
4 Improving the Regulatory Framework
for Innovation 107
International Trade and Investment Framework 108
Domestic Institutional and Regulatory Framework 116
Procurement Policies for Innovation 125
Conclusions 130
Notes 130
References and Other Resources 132
5 Strengthening the Research and Development
Base 135
Global Overview of R&D 135
R&D in Developing Countries 139
Public Sector R&D in Developing Countries 148rivate Sector R&D in DeveCountries 150
International R&D Cooperation and Research
Programs 157
Summary and Conclusions 159
Notes 160
References and Other Resources 161Contents vii
6 Fostering Innovation through Education
and Training 165
Skills for a Knowledge-Based and Innovation-Driven
Economy 165
Lessons from Developed and Developing Countries 173
Adapting the Way Learners Learn to the Knowledge
Economy 175
Beyond Formal General Education 183
From Brain Drain to Brain Circulation 190
Conclusion 194
Notes 195
References and Other Resources 195
7 Policy Evaluation: Assessing Innovation
Systems and Programs 199
Benchmarking Innovation at the Country Level 200
Microlevel Innovation Surveys 206
Program Evaluation 213
Innovation Policy Reviews 224
Conclusions 230
Notes 232
References and Other Resources 233
Part III Policy Implementation 235
8 Policy Itation: The Art and Craft of
Innovation Policy Making 237
Adapting Best Practices to the Local Context:
The Pragmatic Innovation Agenda 237
How to Create a Conducive Institutional Framework: The Virtuous Cycle 255
Creating Frameworks for Change: Strategic
Incrementalism 262
Summary of Policy Principles 267
Note 268
References and Other Resources 268
9 Promoting Competitive and Innovative
Industries 271
Innovation, a Global Phenomenon 272
Agriculture 275
Manufacturing 283
Services 288
Policy Conclusions 295viii Contents
Notes 298
References and Other Resources 299
10 Building Innovative Sites 303
Special Economic Zones 304
Science Parks 310
Clusters 316
Fostering Innovation in a City or Region 323
Conclusion 329
Notes 330
References and Other Resources 331
11 Stimulating Pro-Poor Innovations 335
How to Define Inclusive Innovations, Pro-Poor
Innovations 335
Harnessing Formal Innovation Efforts for the Poor 338
Promoting Grassroots Innovation and
Knowledge Initiatives 356
Enabling the Informal Sector to Absorb Knowledge
and Technology 362
Notes 369
References and Other Resources 370
Index 375
O.1 A Few Examples of Innovations in Developing and
Emerging Economies 5
O.2 Innovation Policies in OECD Countries—50 Years of
Experience 10
O.3 Business Services for Innovators 12
1.1 Innovation Is Essential to Tackling Climate Change 37
1.2 India, an Early Innovator 39
2.1 A Brief History of Innovation Policy in OECD
Countries 56
3.1 Priorities for Business Services Support Schemes 77
3.2 Knowledge Vouchers 85
3.3 Types of Incubators 86
3.4 Good Practices for Business Incubators 88
3.5 Singapore: Incubators Underpinning
a Relationship Hub 89
3.6 SME Clusters in India 94
3.7 The Role of Trade Associations in Italy 96
3.8 Sector Associations in Senegal and Cameroon 97