Title: The state and innovation policy in late development: evidence from South Africa and Malaysia

Authors: Banji Oyelaran-Oyeyinka, Padmashree Gehl Sampath

Addresses: UNHABITAT, Nairobi, Monitoring and Research Division (MRD), P.O. Box 30030 00100, UNU GIGIRI, Room N. 330, Nairobi, Kenya. ' International Innovation and Development; United Nations University-MERIT; Development Policy and Practice, Faculty of Maths, Computing and Technology, The Open University, Walton Hall, Milton Keynes, MK7 6AA, UK

Abstract: This paper analyses the main institutional mechanisms that foster the emergence and performance of firms in knowledge-intensive sectors in developing countries. We use the empirical data collected in 2005 and 2006 in the South African computer hardware and software sectors and the Malaysian computer hardware sector to illustrate the linkages between interactive learning and technological capabilities and how state support plays a critical role in enabling this in the case of knowledge-intensive industries. However, as the analysis in this paper shows, state support is not just implementing a set of policies that succeed elsewhere; it is the ability of the state to set up institutions that reflect a harmony between knowledge and physical infrastructure and the formal and informal institutional compensations that are important to them, and structure the idiosyncratic exchange processes of developing economies.

Keywords: interactive learning; technological capabilities; knowledge intensive sectors; institutions; late development; innovation policy; South Africa; computer hardware; computer software; Malaysia; developing countries; state support; government policy; firm growth.

DOI: 10.1504/IJTLID.2009.023027

International Journal of Technological Learning, Innovation and Development, 2009 Vol.2 No.3, pp.173 - 192

Available online: 08 Feb 2009 *

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