Handbook of Innovation Systems and Developing Countries
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Handbook of Innovation Systems and Developing Countries

Building Domestic Capabilities in a Global Setting

Edited by Bengt-Åke Lundvall, K. J. Joseph, Cristina Chaminade and Jan Vang

This Handbook is the first attempt to adapt the IS approach to developing countries from a theoretical and empirical viewpoint. The Handbook brings eminent scholars in economics, innovation and development studies together with promising young researchers to review the literature and push theoretical boundaries. They critically review the IS approach and its adequacy for developing countries, discuss the relationship between IS and development, and address the question of how it should be adapted to the realities of developing nations.
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Chapter 3: Innovation, Poverty and Inequality: Cause, Coincidence, or Co-evolution?

Susan E Cozzens and Raphael Kaplinsky


Susan E. Cozzens and Raphael Kaplinsky 3.1 Introduction Innovation system research has long acknowledged the importance of the socio-economic context shaping the capability of organizations, regions or countries to develop, diffuse and use innovations. Innovation is embedded in specific social, political and economic relationships and it is largely influenced by the particular institutional context in which these relationships take place. As a consequence, innovation is considered to be highly dependent not just on epochs (Freeman and Perez, 1988), but also on the particularities of specific countries or regions. When considering the link between innovation systems and developing countries, one cannot escape the problems of poverty and inequality so deeply embedded in the socio-economic context of these countries. Poverty and inequality are key issues for global society in the twenty-first century. Poverty – the long, low tail on the global income distribution that leaves half the world’s population living on less than $2 per day – still characterizes far too many lives. Inequality – the distance up the cliff between the bottom and the top of the distribution – is steep globally and getting steeper within most countries. Neither old nor new affluence is being broadly shared, but is instead accumulating among particular people and in particular places. The functioning of systems of innovation and capacity-building might either ameliorate or exacerbate poverty and inequality. In this chapter, we make a first attempt to provide a framework to analyse the relation between, on the one hand, innovation and capability-building and, on the other, poverty and inequality....

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