Reproduced by permission from Innovation and the Development Agenda: An OECD Innovation Strategy
Edited by Erika Kraemer-Mbula and Watu Wamae
Theoretical debate on innovation systems in relation to developing countries
For the most part, the innovation systems approach is based on the socioeconomic
contexts of the advanced countries in which it originated. As a result, it focuses on formal
organisations and institutions.The concept remains broad and is viewed as lacking a
strong theoretical foundation (Lundvall et al., 2002). Arguably, this provides some scope
for adapting the concept to different contexts, including developing country contexts, in
ways that can strengthen innovation for development. However, interactions among
actors in developing economies appear much weaker than in more advanced economies,
and organisations and institutions are not well established. Furthermore, in contrast to
advanced economies, innovative activities in developing countries occur in a socioeconomic
environment that is largely defined by informal arrangements. Learning in such
contexts is under-researched despite its importance in innovation processes.
Focus on the formal sector
Discussions about strengthening innovation systems still focus almost exclusively on
formal organisations and institutions. As a result, policy formulation is typically oriented
towards fulfilling, expanding or reforming formal organisations, especially those directly
engaged in generating knowledge. Therefore, much of the debate about the generation of
knowledge focuses on the role of universities and public/private research institutes as
major sources of the knowledge.
The focus on the formal sector in the innovation systems perspective creates an
important challenge for many developing countries. These countries have highly informal
institutions and organisations. Furthermore, most productive activities depend largely on
knowledge that is not codified in formal research, education or training institutions. The
scant attention paid to the informal sector in the innovation systems framework suggests
that its significance is not acknowledged. Yet, it represents three-quarters of nonagricultural
employment and over 40% of the gross national product (GNP) of many
African countries (see Chapter 4). There is a strong argument for adapting the innovation
systems framework as a tool for understanding innovation in a developing country context.
Recognition of the importance of informal organisations and institutions in no way
suggests that adapting the innovation systems framework in ways that adequately address
them would be straightforward. It is, therefore, perhaps not surprising that the large and
expanding informal segments of developing countries have been neglected in discussions
of innovation systems. However, as a tool for analysis, the innovation systems framework
is likely to be more useful if it provides greater clarity on the relation between learning
and innovation for development in less advanced economies.
Knowledge systems in developing countries
The coexistence of “traditional” or “indigenous” knowledge and “scientific” or
“modern” knowledge is a typical feature of developing countries. Modern knowledge
systems represent the science-based, formally organised creation and exchange of
knowledge. Traditional knowledge systems are mainly rooted in local communities and
knowledge is transmitted from one generation to the next
Science-based activities represent a small part of the economic activities in
developing regions. It is increasingly acknowledged that traditional knowledge plays an
important role in the livelihood of populations in developing countries (Bell, 2006),
especially in Africa. However, traditional knowledge systems are not well articulated.
This makes it difficult for them to be proactive and adapt to new demands for knowledge.
Furthermore, links between modern and traditional knowledge systems tend to be weak
(Bell, 2007). Therefore, one of the main challenges of the innovation systems approach is
to find mechanisms for strengthening the interactions that promote knowledge flows
within and between traditional and modern knowledge systems. Bell (2006) argues that
efforts should be directed towards articulating and integrating traditional and modern
knowledge systems in an interactive process of innovation.
Transformation of innovation systems
Innovation systems are largely shaped by social, institutional and historical conditions.
The transformation of innovation systems therefore depends on changes in these
conditions, which are varied, multiple and interconnected. For instance, changes in
population dynamics (population growth rates, urbanisation), changes in productive
systems (a shift from agrarian to manufacturing and services sectors), and other factors
(changes in the political regime, civil unrest, etc.) differ from country to country. These
and other dynamics stimulate the transformation and evolution of innovation systems.
The transformation of often weak and fragmented innovation systems is a major
challenge for developing countries. First, the components (organisations, institutions and
linkages) of the system are absent in many cases; and second, improving the overall
vitality of the system would require an understanding of innovation processes in the informal sector as well as linkages between innovation processes in the formal and informal sectors.
Building effective innovation systems in Sub-Saharan Africa may require not only
setting up formal organisations and institutions, but also encouraging innovation activities
by systematically upgrading the competences of existing components, particularly those
with identified potential. This may require identifying the bottlenecks in the system,
improving knowledge flows across the system and strengthening linkages among actors.
The capacity of the system to transform and adapt will determine its ability to promote
successful innovation sub-systems and phase out less productive ones (Metcalfe and
Reproduced kind permission from Innovation and the Development Agenda: An OECD Innovation Strategy
Edited by Erika Kraemer-Mbula and Watu Wamae
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