Abstract
This paper develops a multi-sector innovation model and derives a theoretical and empirical framework for an innovation version of the input–output matrix. Using industry-level total factor productivity data, we estimate innovation input–output matrices and examine the properties of innovation linkages for two areas: the East Asian region and the integrated region of East Asia and the USA. Our empirical examination favors unbalanced as opposed to balanced growth and identifies core and bottleneck sectors that are the targets of the unbalanced growth strategy. In particular, we found that sectors with high innovation backward and forward linkages are likely to become bottlenecks.
Highlights
1 Background There is growing recognition of the critical importance of innovation policy for advanced countries to recover from economic downturn and thrive in a highly competitive global economy
We provide a theoretical and empirical framework for deriving and constructing the innovation input–output matrix, which must be differentiated from the technology and commodity input–output matrices
It is important to note this when interpreting the innovation linkage results. We cannot discuss this in detail because of space limitation, we show the alternative regression analysis results for innovation backward and forward linkages in Table 3 (b)
Summary
There is growing recognition of the critical importance of innovation policy for advanced countries to recover from economic downturn and thrive in a highly competitive global economy. Such policy is important for developing countries to promote and sustain economic growth. According to Rosenberg (1982), the complementarity constitutes a major characteristic of technological change. This implies that sufficient attention should be paid to the intersectoral spillover effects of innovation in implementing innovation policies. Because technological change plays a critical role in this process, as Harada Economic Structures (2016) 5:9 suggested by the endogenous growth literature (see, for example, Grossman and Helpman 1991; Aghion and Howitt 1998); a sector’s technological inter-dependence must be properly understood to implement development and growth policies that promote innovation
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