A Roadmap for Innovation Capacity in Developing Countries

Abstract

Innovation capacity is a dynamic capacity linked with the achievement of competitive advantage. Several mechanisms have been proposed to evaluate this capacity. However, developing innovation capacity is a complex process, particularly for developing countries, due to the intricacy of its determinants. Hence, this research analyzes the interlinkages between the key determinants driving this capacity to further propose a continuous path for its growth. A comprehensive review of the literature regarding assessing mechanisms for innovation capacity was conducted, which included 14 key innovation determinants. From a contextual and systematic approach, interpretive structural modelling was employed to determine the interlinkages of these determinants and classified as drivers or dependent. Ten levels or steps were drawn from level partitioning of the final reachability matrix. The results show the relevance of promoting and protecting innovation and intellectual property as the ground to develop this capacity. In addition, R&D investment and university–industry collaboration contribute to the consolidation of innovation systems. Utility models, patents, trademarks, and institution prominence are the result of this loop of innovation capacity development. From these findings, policymakers, practitioners, and scholars can draw a sustained roadmap to enhance this dynamic capacity in their countries.