Innovation Policy and High-Tech Development: An Introduction

The continued prosperity of high and medium income countries hinges on their ability to sustain comparative advantage through continuous innovation. Advanced technologies are an important component of such strategies, but the conditions for successful policies supporting them are undergoing rapid transformation. A widely shared view holds that, in a globally interconnected economy, routine and low-skill production activities will be relocated to low-cost emerging economies. Sustaining high living standards in high-income countries will depend on a strong presence in knowledge-intensive, cutting-edge industries. National and regional governments are therefore actively facilitating the development, production and application of advanced technologies. In the aftermath of the economic recession that started in 2008, national governments have further intensified their efforts to promote industries with high knowledge content. However, advanced technology industries are organised in more complicated ways than this policy orthodoxy recognises. As Saxenian (e.g., 2007, p. 660) documents aptly, high-tech activities have become internationally mobile and are migrating to emerging economies. A growing number of entrepreneurs from Silicon Valley and other centres of leading edge technological innovation are repatriating to their countries of origin, including Taiwan, India, China, and Israel. More and more multinational firms, including industry leaders such as Nokia, locate parts of their research and development operations in emerging economies. These changing global conditions, in addition to the intrinsic challenges of continuous innovation in