Government, innovation and technology policy: an international comparative analysis

Abstract

This paper undertakes a comprehensive analysis of the changing role of government with respect to domestic technology development in developing countries. Firstly, developing countries are categorised into two groups: those that possess the potential to create new technologies and those that do not. There are 11 countries in the first group and the present analysis is restricted to five countries that belong to this category. The paper analyses in depth the fiscal and non-fiscal instruments that these countries have employed to stimulate investments in R&D in the enterprise sector. The basic conclusion of the paper is that for financial instruments such as tax incentives and research grants to succeed a strong emphasis needs to be placed on non-fiscal measures, the most important of which is human resource development.