Complex Systems and Economic Development

VERÓNICA ROBERT; GABRIEL YOGUEL

Turín, Italia

Workshop; Workshop for the Elgar Handbook on The Economics Complexity of Technological Cahnge; 2009

Colegio Carlo Alberto y Departamento di Economía de la Universidad de Torino

In this paper we conceive an innovation system as a complexsystem whose components—organizations, whether firms or institutions—interact andlearn to develop their absorption and connectivity capacities, which define thearchitecture of connections. The interactions between the system’s components triggerchanges in its capacities. Thus, firms’ capacities reinforce themselves through feedbackmechanisms, allowing capacities and connections to co-evolve over time. Together,capacities and feedback mechanisms induce firms to undertake different innovationefforts. However, the results of these efforts not depend exclusively on the firms’behavior but also on the macro and meso dynamics. These dynamics can becharacterized by the processes of creative destruction, appropriation and structuralchange. These mentioned processes, in turn, will take specific features in developed anddeveloping countries and they will define whether the institutional framework enhancesinnovation or not. As a consequence of the interaction between these processes and thefirms’ capacities, innovation endogenously emerges. We assume that the levels ofabsorption and connectivity capacities, the feedback mechanisms between them, and thecharacteristics of the meso and macro structure defined by the three processes and theinstitutional framework that contains them could help to differentiate developing anddeveloped countries.