Trends and determinants of innovation in Asia and the Pacific vs. Latin America and the Caribbean

Abstract

During the past few decades, the Asia-Pacific region grew much faster than any other part of the world while Latin America and the Caribbean largely stagnated. Since innovation is a key ingredient of economic growth and becoming a central tenant of policy, we analyze and compare innovation in the two regions. The data clearly show that Asia-Pacific innovates more than Latin America and the Caribbean, which implies that greater innovation may have contributed to its superior growth performance. To offer substantive policy advisory we present novel results. Formal empirical analysis based on panel regression techniques shows that investment in R&D, secondary school enrolment, and infrastructure access have positive effects on innovation. Our descriptive and empirical analysis therefore yield important policy implications for promoting innovation policy in the two regions.