| Abstract: |
This paper is intended to provide an updated discussion on a series of issues
that the relevant literature suggests to be crucial in dealing with the
challenges a middle income country may encounter in its attempts to further
catch-up a higher income status. In particular, the conventional economic
wisdom – ranging from the Lewis-Kuznets model to the endogenous growth
approach– will be contrasted with the Schumpeterian and evolutionary views
pointing to the role of capabilities and knowledge, considered as key inputs
to foster economic growth. Then, attention will be turned to structural change
and innovation, trying to map – using the taxonomies put forward by the
innovation literature – the concrete ways through which a middle income
country can engage a technological catching-up, having in mind that developing
countries are deeply involved into globalized markets where domestic
innovation has to be complemented by the role played by international
technological transfer. Among the ways how a middle income country can foster
domestic innovation and structural change in terms of sectoral diversification
and product differentiation, a recent stream of literature underscores the
potentials of local innovative entrepreneurship, that will also be discussed
bridging entrepreneurial studies with the development literature. Finally, the
possible consequences of catching-up in terms of jobs and skills will be
discussed. |