Edited by Anthony Bartzokas and Sunil Mani
Chapter 6: Institutional support for investment in new technologies: the role of venture capital institutions in developing countries
Sunil Mani and Anthony Bartzokas INTRODUCTION Developing countries have over time emerged as leading producers and exporters of high-technology products. The share of developing countries in the total world exports of high-technology products has increased from about 8 per cent in 1988 to a little over 21 per cent in 1998 (Mani, 2000). However there is considerable concentration of this activity in a few developing countries from the Asian region. In fact about 95 per cent of the developing country exports of high-technology products are concentrated in just ﬁve developing countries: Singapore, Malaysia, Philippines, Thailand and Korea. During the same period, one also sees a signiﬁcant increase in the innovative activity of these countries: the number of US patents granted to innovators from developing countries increased from about 1 per cent (of the world total) to about 6 per cent (Mani, 2002). The better performance, relatively speaking, of these countries is very often attributed to the particular kind of economic policy followed by their respective governments. This policy is usually charecterized by trading regimes highly open to both foreign trade and capital. But this line of reasoning does not pay any attention at all to the considerable eﬀorts of these countries towards strengthening the ability of their domestic enterprises to enhance their technology generating eﬀorts. The countries have put in place a number of institutional arrangements for this activity to ﬂourish. While there are signiﬁcant variations in the speciﬁc components of this policy across the...
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