Innovation-led Growth Research Articles

Clariant opens Indonesian expansions; specifies innovation-led growth strategy

Swiss chemicals group Clariant has opened the extension to its manufacturing facility in Tangerang, Indonesia. The site houses production plants for masterbatches, pigment preparations and ingredients for personal care and home and industrial cleaning products. The expansion and upgrade project at Tangerang is part of a CHF8 million (c. €6.5 million) investment by the company to enhance its capabilities in the Asian region [ADPO, June 2013].

China: the next innovation hot spot for the world

Purpose – Nowadays, China's economy is climbing up the value curve, transitioning from the low-cost manufacturing of basic products to the assembly of high-tech products and more recently to innovation-led growth. This article gives an overview of this dynamic. The authors first give a succinct historical perspective, then describe the present situation; lastly they look at issues for the near future. The authors contend that Western firms cannot afford to be absent from the paradigm shift described in the paper. Foreign R&D in China no longer has emerging status. Design/methodology/approach – The article builds on a review of the literature, statistical data and field experience in different Chinese technological hot spots (including Shanghai Zhangjiang, Beijing Zhongguancun, and Suzhou high-tech parks). Findings – The article highlights five areas where technical change has taken place in China. The assembled facts depict the constitution of a credible Chinese system of innovation. Examples of recent accomplishments in different industries argue for the sustainability of these advances. Research limitations/implications – This paper can be considered as an essay reflecting the authors' understanding of the Chinese situation; as such, it may be subjectively biased. Practical implications – The paper provides arguments for Western managers to convince decision makers of China's new role on the innovation and R&D map; Western managers should definitely be part of this move. Originality/value – The paper highlights a major change: China is still a low-tech country; but it has developed world-class islands of knowledge for innovation and technology creation.

Optimal Capital Versus Labor Taxation with Innovation-Led Growth

Chamley (1986) and Judd (1985) showed that, in a standard neoclassical growth model with capital accumulation and infinitely lived agents, either taxing or subsidizing capital cannot be optimal in the steady state. In this paper, we introduce innovation-led growth into the Chamley-Judd framework, using a Schumpeterian growth model where productivity-enhancing innovations result from pro.t-motivated R&D investment. Our main result is that, for a given required trend of public expenditure, a zero tax/subsidy on capital becomes suboptimal. In particular, the higher the level of public expenditure and the income elasticity of labor supply, the less should capital income be subsidized and the more it should be taxed. Not taxing capital implies that labor must be taxed at a higher rate. This in turn has a detrimental effect on labor supply and therefore on the market size for innovation. At the same time, for a given labor supply, taxing capital also reduces innovation incentives, so that for low levels of public expenditure and/or labor supply elasticity it becomes optimal to subsidize capital income.

Can Malaysia Achieve Innovation-Led Growth?

In April 2010, Malaysia embarked on a new economic model (NEM) to transform the economy towards High-Income status by 2020. Knowledge and innovation are the bedrock of this development strategy. Indeed, moving to High-Income status would require economic growth in Malaysia to be sustained by higher productivity growth, which in turn relies heavily on knowledge, innovation, and efficient allocation of resources. Yet, it is not clear from policy discussions in Malaysia, that the mechanisms through which innovation penetrates a society and ultimately drives economic growth are widely understood.Fostering innovation, beyond the traditional fixation on R&D and funding, requires making the right trade-offs in the allocation of resources and creating an overall environment and culture that enable the emergence, nurturing, implementation and fruition of ideas. This calls for bold societal reforms that are cross-cutting in nature, along the lines, but well beyond, the eight Strategic Reform Initiatives (SRIs) suggested in the NEM.This book offers a timely and comprehensive assessment of the innovation capacity of Malaysia, rigorously gauging the readiness of the country in transforming into a human capital-centric, innovation-led economy. Drawing on a series of empirical tools and methodologies, as well as the “Malaysia Vision 2020 Model” (MV20 model) developed in Khazanah Research and Investment Strategy (KRIS), the book adopts a holistic, integrated approach to evaluating the spheres of the Malaysian economic system that are critical to unleashing the innovation potential. These include the education sector, the labour market, the product market and the knowledge production sector, as well as the functioning of public institutions. In each of these spheres, the book articulates what it will take for Malaysia to achieve its Vision 2020.

Reflections from an OECD workshop on environmental benefits of nanotechnology

In July 2009, the Organisation for Economic Cooperation and Development (OECD) Working Parties on Nanotechnology and on Manufactured Nano-Materials organised the OECD conference on “Potential environmental benefits of nanotechnology: fostering safe innovation-led growth”. The objective of the conference was to provide an opportunity for government, academia and industry to look into stateof-the-art of nanotechnologies, their potential environmental benefits as well as potential health and environmental concerns and to examine related policy considerations.

Service Sector Growth in China and India: A Comparison

China: An International JournalVol. 05, No. 01, pp. 137-154 (2007) Comments and NotesNo AccessService Sector Growth in China and India: A ComparisonYanrui WUYanrui WUThe author is Associate Professor in the School of Economics and Commerce at the University of Western Australia. He earned his PhD in economics from the University of Adelaide. His main research interests are economic development, Asian economies and productivity analysis.https://doi.org/10.1142/S021974720700009XCited by:10 PreviousNext AboutSectionsPDF/EPUB ToolsAdd to favoritesDownload CitationsTrack CitationsRecommend to Library ShareShare onFacebookTwitterLinked InRedditEmail FiguresReferencesRelatedDetailsCited By 10The Decomposition of Productivity Growth for India: Before and After 1991Kausik Gangopadhyay, Debasis Mondal and Thasni T1 March 2023 | IIM Kozhikode Society & Management Review, Vol. 35Does FDI Generate Employment? An Empirical Study of Indian Service SectorMohammad Aarif and Md. Tarique20 March 2022 | SDMIMD Journal of Management, Vol. 13Malicious Spam Distribution: A Routine Activities ApproachRobert C. Perkins, C. Jordan Howell, Cassandra E. Dodge, George W. Burruss and David Maimon18 July 2020 | Deviant Behavior, Vol. 43, No. 2Wind Energy and Solar PV Developments in ChinaTariq Muneer, Eulalia Jadraque Gago and Saioa Etxebarria Berrizbeitia1 January 2022Competitiveness and Enterprise Development for Innovation-Led Growth Government of Rwanda2 July 2020Dynamics of Employment and Economic Growth: A Comparative Study of China and IndiaManjit Sharma and Pushpak Sharma4 December 2019 | Millennial Asia, Vol. 10, No. 3What drives cross-border mergers and acquisitions?Professor Sanjoy Sircar, Dr Rajat Agrawal, Dr, Vanita Tripathi and Ashu Lamba16 Nov 2015 | Journal of Strategy and Management, Vol. 8, No. 4China’s services sector: the new engine of economic growthYanrui Wu29 February 2016 | Eurasian Geography and Economics, Vol. 56, No. 6Sectoral Productivity and Regional Disparities in China, 1978–2006Kiril Tochkov and Wenting Yu27 June 2013 | Comparative Economic Studies, Vol. 55, No. 4Bibliography26 February 2010 Recommended Vol. 05, No. 01 Metrics History PDF download

Environmental tax policy in a model of growth cycles

The purpose of this paper is to consider environmental taxation which would control emissions of firms in a model of growth cycles. In the model presented below, the economy may experience two phases of growth and environmental quality: “the no-innovation growth regime” and “the innovation-led growth regime”. Aggregate capital and environmental quality remain constant in the no-innovation growth regime, while they perpetually increase in the innovation-led growth regime. The paper shows that the tax plays a key role in determining whether the economy stably converges to one of the two regimes or fluctuates permanently between them. It also shows that there is a critical level of the tax and that the economy obtains higher growth rates of capital and environmental quality by raising (or reducing) the tax if the initial tax is below (or above) the critical level.

Transitional dynamics of output, wages and profits in innovation-led growth: a general equilibrium analysis

This paper focuses on the transition between steady states of innovation-led growth, in the context of a general-equilibrium model in which the exogenous appearance of a new technological paradigm triggers a wave of endogenous, stochastic, incremental innovations through which it is implemented. The analysis demonstrates existence of a unique Markov-perfect equilibrium, and shows that its transition dynamics conform in expected values to commonly observed empirical patterns. These include an initial productivity decline followed by a greater increase in productivity; and ‘creative destruction’ that reduces the market value of traditional, incumbent firms while creating new value in innovative entrants.

Developing technological innovations within networks

Innovation-led growth demands the creation and development of effective relationships between the manufacturers, users, universities, polytechnics, research institute, government departments and quasi-government organizations at the various stages in the innovation cycle. The effective management of the networks ensures that the differing opportunities for sustain-able cost advantages and/or product or process differentiation at the different stages in the innovation cycle are more clearly identified and grasped. In delineating the strategically relevant activities associated with creating, developing, manufacturing, marketing and the re-innovation of medical equipment innovations, evidence suggests that the innovation cycle could be usefully divided into ten stages for more effective and detailed analysis. The degree and nature of the networking in each of the stages was examined. The sample of innovations studied in the research described here was from the medical equipment industry, there being thirty four innovations from eleven companies, twenty six (76%) of which were developed through multiple and continuous interaction between the manufacturer and the other actors in the networks, resulting in twenty two (65 %) being successful, one being too early to judge and three being failures.