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This report provides a comprehensive look at the role of innovation in promoting economic and social development. It examines the impact of innovation on the economic growth of developing countries and the future role of technological innovation in international efforts to mitigate the effects of climate change, amongst many other issues.



The Innovation Capacity Index


1.1. Policies and Institutions Underpinning Country Innovation: Results from the Innovation Capacity Index

Our understanding of what drives national prosperity has evolved over time. Natural resources, population growth, industrialization, geography, climate, and military might have all played a role in the past. We also know that the relative importance of these drivers has shifted over time, and that in recent decades, more importance has been given to the coherence and quality of policies and the development of supporting institutions. A relative newcomer to this debate—identified as perhaps one of the most important modern engines of productivity and growth—has been the innovation excellence of a country; that is, its industries, researchers, developers, creative thinkers, enlightened politicians, managers, and clusters.
Augusto López-Claros, Yasmina N Mata

Dimensions of Innovation


2.1. Creating Blueprints for Business in the 21st Century: Social Entrepreneurship Shows the Way

Over the last fifteen years, the concept of social entrepreneurship has captured the imagination and interest of public, corporate and civic leaders worldwide. While social entrepreneurs have existed since people came together to form communities, the current focus on applying entrepreneurial thinking to achieve social transformation has come of age, driven in large part by the shortcomings of governments, markets, and charitable organizations to devise innovative, sustainable, and scalable solutions to increasingly complex societal challenges.
Pamela Hartigan

2.2. Organizations Don’t Innovate, People Do: Trust Is the Foundation

In the 1920s, it took 17 days to paint a Buick and 34 days to paint a Cadillac. At that time, Charles “Boss” Kettering was made a Vice President of United Motor Company, later known as General Motors (GM).2 At a division manager’s meeting, Kettering laid out the problem. He pointed out that GM could put a car together in minutes, but that it took anywhere from 17 to 34 days to paint it. If GM was going to produce thousands of cars a day, then storage was going to become a major issue.
Robert Rosenfeld, Gary Wilhelmi, Andrew Harrison

2.3. Breakthrough Inventions and the Growth of Innovation Clusters

In a now classic study, AnnaLee Saxenian (1994) brought the migration of innovation clusters into focus for academics and practitioners. Intellectual heavyweights like Alfred Marshall (1920) and Jane Jacobs (1970) had long studied and debated the sources of clusters, how they worked, and even their decline. And much of the recent academic work continues in this vein. For example, Ellison, Glaeser, and Kerr (2010) quantify the relative importance of reasons why clusters form.
William R Kerr

2.4. The Learning Economy as a Phase in Economic Development: Contradictions and Institutional Responses

Economic theory is largely formulated on a general level, without explicit reference to time and space. Institutional assumptions are often implicit, if not absent. If spelled out at all, they are usually limited to competitive markets and private property rights. Economic processes do not seem to be situated in real time, but in a kind of abstract time in which history does not matter.
Björn Johnson

2.5. Innovation: Thoughts on Purpose, Definition, and Governance

The impact of innovation on human beings, institutions, and their interrelations is ubiquitous, transforming, accelerating and constantly changing.
Mahmud Samandari

2.6. There is no Planet B!

It almost seems prehistoric. On 11 December 1997, I participated in the third Conference of the Parties (COP 3) meeting in Kyoto. There we hammered out and adopted the first international climate change agreement, known as the Kyoto Protocol. It called upon 37 industrialized nations to reduce their carbon emissions by 5.2 percent from their 1990 emissions level. It went into effect on 16 February 2005, more than seven years after it was adopted. The United States, the largest global emitter until 2007 (now surpassed by China), never became a signatory.
José María Figueres

2.7. Technological Capability, Innovation, and Productivity in Least-Developed and Developing Countries

After decades of rigorous theoretical and empirical research, there is now consensus that technological progress is the engine of sustainable economic growth and development. No country has achieved economic development without investing in some form of technological knowledge and innovation. However, as apparent as this link has become, it remains unclear how technological progress will be achieved in least-developed and developing countries (LDDCs) and how it will affect economic growth and development.
Hulya Ulku

Innovation Profiles



The Innovation Capacity Index 2010–2011 (ICI) ranks a total of 131 countries. This year’s published edition of The Innovation for Development Report includes innovation profiles for 70 of the 131 countries covered by the Index, accounting for approximately 96 percent of world GDP. The remaining 61 innovation profiles are available at:
Augusto López-Claros


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