Increasing countries’ ability to adopt and adapt existing technologies is critical; strong innovative capacity is far more important than what particular combination of goods countries produce.
To spur innovation, investments in R&D are insufficient—they must be matched by a private sector that has the capacity and demand for technological upgrading
Hence, our conception of the National Innovation System and of innovation promotion policies must go beyond a narrow focus on universities or R&D and cover access to finance, managerial capacity, and a business environment that encourages risk taking.
