Munich Personal RePEc Archive

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

Kalvet, Tarmo (2009): Innovation Policy and Development in the ICT Paradigm: Regional and Theoretical Perspectives. Published in: Tallinn University of Technology Doctoral Theses , Vol. 9, No. 1 (9. March 2009)

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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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