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 9: The Role of Indigenous Firms in Innovation Systems in Developing Countries: The Developmental Implications of National Champion Firms’ Response to Underdeveloped National Innovation Systems

Helena Barnard, Tracy Bromfield and John Cantwell


Helena Barnard, Tracy Bromfield and John Cantwell 9.1 Introduction This chapter discusses the role of national champion firms in supporting the development of domestic capabilities and thus the national innovation system. A number of role players are repeatedly mentioned in studies of innovation systems in developing countries, including the research, education and training infrastructure, MNCs and local suppliers, and financial markets and labour market arrangements (Bell and Pavitt, 1992; Dosi et al., 1990; Ernst, 2002; Lall, 2001b; Mowery and Nelson, 1999). But in spite of the importance of national champion firms in less developed countries, little is understood about how they interact with their national innovation system. This research attempts to fill that gap by investigating the interaction between the champion firm and its institutional context. The creation of national champion firms is one of the stereotypical forms of government intervention in developing countries (Lall and Teubal, 2001). Whether they be South Korean chaebols, Chinese stateowned enterprises, or Brazilian firms like CVRD, Embraer and Petrobras, there is no shortage of examples of firms that receive considerable state support with the expectation that they will contribute to a sector that is deemed strategic by government. Various studies examine the capability evolution of firms such as Embraer (Bernard and Oliviera, 2003), Hyundai (Kim, 1998) and Samsung (Lee, 2001). A further number of studies hone in on how (elements of) innovation systems contribute to the capability development of developing country firms (Dantas and Bell, 2006; Figueiredo, 2008; Hobday, 2000). The increasing prominence of...

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