Given that the potential returns of innovation in developing and catch-up economies is large, why there is so little investment into innovation? This “innovation paradox” is at the centre of this episode. Despite the enormous potential that innovation, especially gradual innovation building on ideas and technologies that have proven their mettle elsewhere, and despite, in many countries, strong political commitment, UNECE transition economies struggle to innovate in ways that drive productivity growth and sustainable development.

Why do good ideas not necessarily translate into innovation, and what can developing countries do about it? We decided to ask this and many other questions to Dr. Xavier Cirera and Professor William Maloney, the economists from the World Bank. In their book called “The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-up”, they examine the nature of innovation in developing countries, the innovation paradox, and what governments can do to resolve the innovation policy dilemma. In this podcast, the authors dissect these elements of why countries do not get the expected rate returns from follower countries to catch up, and what developing countries can do to boost innovation.

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