Abstract
The edited volume entitled Innovation Systems, Economic Development and Public Policy: Sustainable Options from Emerging Economies is a collection of essays and is being published to honour Professor Lakhwinder Singh on the occasion of his retirement from Punjabi University, Patiala (India). The volume aims to present different facets of looking into the nature, structure, growth and impact of innovation on different entities. It is an attempt to present a way forward for the future approaches for long-term growth, sustainability and inclusiveness amidst dynamic and fast-changing technological frontiers. The work presents the meticulous empirical as well as theoretical material on the characteristics and delves into how innovation systems, economic development and public policy intersect in the context of emerging economies. The studies explored how these economies can leverage their unique strengths and overcome challenges to foster sustainable economic growth through effective policy measures that promote innovation, technology transfer and responsible resource use. The topics covered in this volume are highly relevant in the context of global economic dynamics and the ongoing efforts of many countries to achieve balanced and sustainable development in a rapidly changing world. Moreover, researchers, policymakers and practitioners often explore these themes to inform their strategies and decision-making processes. This volume is divided into four sections comprising 17 chapters (including introductory chapter by Swati Mehta and Baldev Singh Shergill) that are devoted to the themes on ‘industrial linkages’, ‘innovation systems’, ‘sub-national systems’ and ‘growth and sustainability’, respectively.
The first section of the volume takes us through the fundamentals of industrial linkages that sharpen our understanding on how economies evolve over time. They play a significant role in promoting economic growth, diversification and resilience. Policymakers and economists closely study these linkages to develop strategies that support the development and transformation of evolving economies. These linkages are of utmost importance keeping in view one of the key goals of United Nations Sustainable Development Goals (SDG 9), covering several targets for promoting industrial restructuring. Four chapters have been contributed in first section. These are summarized as follows:
Daniel K. N. Johnson and Tianyi (Lincy) Qin, in their contributory Chapter 2, motivated to see whether more innovative sectors grow faster (or slower) economically, or is the causality reversed, such that growing (or stagnant) sectors become more (or less) innovative? Across 35 sectors at national level, they empirically analysed the patterns for India and the United States over the years 1995–2011. The results confirmed that, at the national level, innovation Granger-causes production and not vice versa, except where it Granger-causes more innovation instead, but a plurality of causal linkages is possible within specific sectors (p. 25). The role of technology transfer to developing countries has been discussed by Vinish Kathuria (Chapter 3) and offered some suggestions on what needs to be done to maximize the recipient country’s benefits from the transferred technology. This chapter highlighted that there are three key concerns in technology transfer that have implications for innovation and growth for developing countries. The first concern is whether appropriate technology is being transferred. Second, once the technology is acquired, it has to be diffused and; third, if technology has to serve people, then it has to be not only adapted to local conditions but also be affordable to them. The chapter has concluded that, to remain competitive, a nation should continuously upgrade and innovate.
Chapter 4 (by Leonardo A. Lanzona, Jr), entitled Educational Liberalization, Innovation, and Economic Growth, has empirically attempted to show the impact of foreign participation constraints on the educational and economic outcome across the comparative countries: Vietnam, Indonesia, Thailand, Bolivia and Guatemala. The results from the diagnostic tests indicated that the restrictions on the mobility of professionals may be more inhibiting, given how tedious it is for foreigners to apply for the numerous permits, all from different government agencies, to allow the practice of their professions in the country. The message is that opening up the sector is not the only solution to improve the quality of education in the country—it may, however, serve as a catalyst for development. Finally, the comparison on the structure of innovation in India and China has been made by Swati Mehta and Baldev Singh Shergill (Chapter 5). The analysis clearly indicated that India needs to concentrate more on increasing its efforts for innovation that could boost growth, productivity and inclusive development in the country. From policy point of view, authors suggested that there is need to promote inter-linkages between industry, universities and research institutes with an emphasis on building a stronger human capital, especially in India.
The second section of the volume highlights that innovation systems are critical for the development of developing economies. While they face unique challenges, with the right policies, investments and collaborations, these economies can build vibrant innovation ecosystems that contribute to sustainable economic growth and improved living standards. The chapters summarized in this section are as follows:
Sanika Sulochani Ramanayake (in Chapter 6), in the context of Sri Lanka, found that growth-driven national innovation system (NIS)-associated indicators were not performing adequately. To overcome crisis in the long run, the government of Sri Lanka needs to make some policies to connect the university and industrial sectors for R&D. Moreover, conducive environment, in terms of investment through joint venture companies, may be needed to encourage both private and public firms to collaborate with foreign firms with higher technological capabilities. Rajesh GK and Mammo Muchie, in Chapter 7, tried to provide a case study of how an innovation systems approach can shed light on the dynamics of agricultural technology diffusion in the specific context of India’s sericulture industry. The analysis indicated that India needs to replace the strategy of direct technology transfer from abroad and undertake a more introspective policy.
Manish Kumar and Pushpa Trivedi empirically explored the measurement of productivity and its determinants of the Indian electronics industry (of 148 firms at a 4-digit level of industrial classification) for the period of 2004–2005 to 2016–2017 (Chapter 8). The estimated results of the model show that firm size and profitability positively explain firm-level productivity, while firm age has no significant impact. On the basis of findings, author(s) proposed an active government role in resource (re)allocation and industry-specific policies to foster innovation and entrepreneurship to reduce import dependency in the long run (p. 180). Anurag Anand, in his Chapter 9, has empirically investigated the role of firm specific factors in determining inter-firm differences in the export behaviour of firms in case of Indian Motor Vehicle industry. The study found clear evidence that younger companies are more successful in the export market. In the light of analysis, the study highlighted the role of government to improve the international competitiveness of domestic companies.
Sub-national innovation systems refer to the networks of institutions, organizations and actors within a specific region or locality that collectively contribute to innovation and economic development. These systems operate at a sub-national level, such as within a city, state, or province, and are an essential component of a country’s overall innovation landscape. Sub-national innovation systems are critical drivers of economic growth and competitiveness. They are shaped by the unique characteristics and resources of a region, and effective governance, collaboration and investment are essential to harness their full potential for innovation and development. What follows is the summary of studies contributed in the third section.
In Chapter 10, Nirvikar Singh used the conceptual framework of an innovation system to discuss the manner in which digital technology can have an impact on the entire economy of India. The chapter threw light on the importance and characteristics of a start-up ecosystem. The chapter concluded that the falling cost of information technology and the increased size of that sector together represent a major opportunity for digital technology to emerge as the foundation for a national system of innovation. To overcoming the weakness of human capital generation, author suggested a range of new skills to promote digital innovation in India. He argued that effective institutions are of significance importance to promote infrastructure development, investment, skill development and cultural exchange. Chapter 11, by Bhagirathi Panda, has focused on how innovation and institutions play a role in the economic landscape of this north-eastern region (NER) of India within the context of the Act East Policy. The results pointed out that NER was a laggard in the field of innovation. Hence, to improve the institutions and innovation ecosystem in the region, a concerted effort is required by the government to bring private players and community together in a formalized arrangement.
In Chapter 12, Keshab Das has examined how local firms adhere to global standards. This chapter touched upon several important aspects of the labour market, particularly in the context of small and medium-sized enterprises and industrial clusters of Tiruppur, Surat and Mumbai. Author indicated that in spite of increasing awareness pertaining to the business benefits of following global standards by the local firms, there is little to suggest that these firms are even at the threshold of coming up with alternative standards that could threaten the prevailing ones. A case of reverse innovation in the microfinance sector in South Asia has been examined by Surender Mor and Arvind Ashta in Chapter 13. They highlighted with the help of an example that mobile banking and correspondents banks were successfully serving the needy segment of the population (unbanked population) in many parts of the world, and this needs to be promoted to the rest of the world where financial inclusion has not taken place (especially in the rural areas). Of course, more research is needed in this area as rightly pointed out by the authors.
The fourth section of the volume deals with the innovation, growth and sustainability. These are interconnected and mutually reinforcing concepts. Embracing innovation can drive growth, while integrating sustainable practices can support long-term growth and enhance innovation. Organizations that strike a balance between these elements are more likely to thrive in an ever-changing and socially conscious world. The salient features of the studies contributed in this section are as follows.
Chapter 14 by Sukhpal Singh is devoted to the case study of National Dairy Development Board’s (NDDB) Milk Producer’s Companies (MPCs) with a view to examining the innovations in terms of their governance and management. The chapter concludes that with the help of innovations carried out by NDDB, MPCs had been able to scale up and became viable despite entering the market when it was highly competitive across states where these are located. The analysis also indicated the importance of contract farming among the members of the milk producing companies (mostly small and marginal producers) to ensure regular supply of milk. However, as author argued, small and marginal producers find it difficult to break even sooner, and later bringing in larger farmers creates problem of governance. Nidhi Singh, in Chapter 15, evaluated the issues and challenges experienced in the performance of system building activities by the three major innovation actors: science base, translational base and industrial base actors for the development of an emerging molecular diagnostics innovation system in India. Using the innovation system framework, author found that there is a lack of thrust toward creating exploratory learning, valorisation and applied scientific research. The author suggested that there is a need for a well-articulated goal-oriented targeted policy strategy from the State to assist and develop the innovation pathway for serving socially desirable objectives. Chapter 16 is contributed by VGR Chandran, Angathevar Baskaran and Sonia Kumari Selvarajan. The main aim of the chapter was to explore the solar industry ecosystem in Malaysia, which has seen significant growth over the last decade. The chapter concludes that Malaysia has been successful in building its solar industry market using various policies and programmes with dedicated institutional settings. In the light of analysis, authors suggested that Malaysia may serve as a model for other countries that aim to develop their solar potential to contribute towards the renewable target.
Manish Anand, Rita Pandey and Shailly Kedia, in the last chapter of the book entitled, Mission-oriented Innovation Systems in the Climate Change Context: The Case of Agriculture and Renewable Energy Sector in India, outlines that the sustainability and efficacy of developments in the agriculture sector is intrinsically linked to integrating the issues of poverty, inclusivity and environment, including climate change, in the long-term development strategy at all levels of planning. In this regard, as the authors have highlighted, it requires a good understanding and cooperation between the national and state-level policies, plans and vision.
It can be summarized that the volume largely deals with the debate, methodology and dimensions of innovation systems and its linkages with economic development and public policy with a view to providing sustainable options in the context of emerging economies. This volume skilfully engages in a hitherto unexplored dimension of innovation, provides fresh insights into the discourse on innovation in emerging economies, which is believed to be driven by a combination of local talent, market opportunities, entrepreneurship and global connectivity. Moreover, these economies have the potential to not only adapt existing technologies but also create novel solutions that can benefit both their own populations and the global community. To unlock their full innovation potential, it’s essential for emerging economies to continue investing in education, infrastructure and a supportive regulatory environment while fostering collaboration among various stakeholders. This volume also threw light on the public policies that play a critical role in shaping the innovation landscape in emerging economies. The message of the volume is that by aligning innovation efforts with implementable public policies, while keeping in view long-term sustainability goals, countries can not only drive economic growth but also address pressing global challenges, such as climate change, resource scarcity and social inequality, in a responsible and forward-looking manner. This volume is highly recommended to researchers, academicians, government agencies and policymakers. The issues discussed in this volume would surely benefit all the stakeholders and sharpen their understanding with respect to the concepts associated with the innovation systems and its linkages with economic development, especially in the emerging economies. In the end, it is a useful addition to the literature that would definitely benefit students of economics interested in innovation and innovation systems in particular and social sciences in general.