Innovation, Growth and Wage Structure in Transforming Economies

Abstract

Today it is commonplace to argue that technological change and innovation have a positive impact on economic growth. However, the mechanisms translating innovations into broad-based economic effects remain at least partly unknown. This holds especially for transition countries where innovations play only a very subordinated role. For these countries it is more important to achieve technological capabilities which allow them to imitate processes and products. Innovation theory, development theory and many recent success stories, e.g. the South East Asian NICs, show that these capabilities don’t fall from heaven but rather are mainly a result of own efforts. These efforts comprise not only scientific and technological inputs and outputs but also the building-up of an adequate institutional framework, as it is through institutions that innovation and imitation processes are mediated. A theoretical concept in which technical and institutional change is explicitly linked is that of systems of innovation (Lundvall, 1992): meaning the overlapping networks of R&D institutions in the business community and the public sector. We will discuss these aspects more comprehensively in section 2, where we will present some indicators describing the technological capabilities and performance of the transition countries. Furthermore we will cast a glance at the former institutional framework which can be considered as the national innovation system of the former socialistic countries.