Institutional Conditions for National Technology Capabilities: A Comparative Study of Technology Catch-up in Korea and Japan

Abstract

What determines technology capabilities and catch-up of countries? Why do the patterns, speed and performance of innovation differ across countries? This thesis seeks to address these questions by linking institutional, organisational and sectoral features of innovation in Korea and Japan which are regarded as the most successful cases of technology catchup. Despite the widespread recognition that innovators are susceptible to institutional conditions and contextual influences, previous empirical studies have not used contextual factors as determinants of innovation. On the other hand, institutional analysis of innovation has addressed national diversity and historical patterns of change based on thick description and qualitative evidence. This thesis provides a new way of explaining the underlying of dynamics of innovation by empirically examining direct correlations between country-specific institutional characteristics and technology capabilities and by testing causal relationships between technology input and output. This thesis employs the national innovation system (NIS) and the late industrialiser perspectives to perform three sets of empirical analyses. The first indentifies key institutional and policy determinants of national technology capabilities based on five sets of cross-sectional data, consisting of 37 high-income countries and 32 middle-income countries. The second examines specific institutional conditions for causal relationships between technology input and output based on time-series data of Korea and Japan. The third investigates technological catchup occurrence, speed and performance to indentify productivity and technology gaps as well as delaying and contributing factors. The findings of the thesis have significant relevance to innovation strategy and policy of other catching-up countries in the process of building indigenous technology capabilities