Why should governments of developing countries invest in R&D and innovation?

Abstract

The rationales for public investment in R&D and innovation have evolved over time from an initial emphasis on market failures amongst neoclassical economists towards a broader view based on a systemic characterization of innovation amongst evolutionary economists. More recently, a renewed emphasis has been placed on the critical role of innovation to address social challenges and overcome development traps. The purpose of this article is to summarize the different rationales for public investments in R&D and innovation in developing countries, with the aim of providing clear arguments to better advocate for the continuation and expansion of such investments in front of an audience that has to prioritize among multiple competing development agendas in the context of financing constraints, including budget allocators, high-level policymakers and the civil society at large