Our conference discussion begins with a definition of “innovation” as the introduction of new or improved products, production techniques and organizational structures, as well as the discovery of new markets, and the use of new input factors (Schumpeter 1934). Historically East Asian countries and companies tend to adopt innovations from developed countries (Kim 1997), but in recent years this region has moved beyond imitation to become a global manufacturing base. Past studies have shown how this has led to increases in productivity and competitiveness (Porter 2002) and subsequently to economic growth (Pavitt 1999; Yusuf 2003). Following these analytical threads, the particular focus of this conference is articulating the pathways to innovation.
Despite the best efforts of countries and companies to protect their intellectual property, innovation tends to migrate across organizational, national, and regional boundaries (Ernst 2003). The rise of South Korea, Taiwan, China and India as locations for technology-intensive industries (e.g., electronics, software, etc.) leads us to question traditional “industrial upgrading” theories arguing that technology flows from developed to developing countries. Re-examining the national and international nexus brings back into view how innovations can flow from developing countries to developed countries as well.
Since most studies tend to examine the “structural” prerequisites for innovation, they neglect to “socially embed” the paths to innovation. This embedded approach brings into relief the institutions and social actors necessary for innovation. The role of policymakers, businesses, and universities/research institutes is important for understanding how the “rules of the game” facilitate and hinder the emergence of innovations. Policymakers create “economic space” for new markets; entrepreneurs enter these nascent markets with new products. We examine the role of policymakers and business people in separate sessions, followed by a session on the role of “public private partnerships” in creating pathways to innovation. These exogenous factors then provide the context for understanding how variations in the “intra-firm” paths to innovation affect company performance.
When the rules of the game change what consequences does this have or not have on a country’s technological capacity? Given our understanding of the policy instruments, economic institutions, and governance structures derived from this conference, the final session examines whether the pathways to innovation in developed and developing countries has led to economic development. Pursuing this line of discussion during our conference should reveal future pathways to innovation and a better way of life.