Growth and Structural Transformation — Major Asian Countries’ Experiences

Abstract

The preceding chapter highlighted the significant determinants of economic growth in developing economies. The explanatory variables, in particular investment, R&D, together with human capital, are broadly in line with the modern growth theory, providing forces that are internal to the economic system and also govern and create technological knowledge and its diffusion given the appropriate institutions. Improving and broadening the vision of innovation has a multivariate characterization calling for technological and institutional capabilities and a developmental state with a balancing market power to create enabling environment and critical underpinnings for markets and capabilities for technical innovation and participation through encompassing the existence of product cycles (see Vernon, 1966) and quality ladders (see Helpman, 2004).