Policy and Complex Systems
in which the state could perform entrepreneurial functions either in its own right or in support of the private sector or some combination thereof . In other words , recognizing the importance of innovation in economic development requires a broader view of the sources of entrepreneurship beyond the private sector . Assigning the state an entrepreneurial role would resolve the false dichotomy sketched out by Wallich and his supporters .
In examining the emergence of the entrepreneurial state in East Asian economies , Ebner has noted key functions that include identification of emerging techno-economic paradigms ; creating open economies that are part of global competitiveness strategies ; formation of entrepreneurial capacity ; promotion of knowledge flows among actors in national innovation systems ; and creation of conditions that support business incubation and scale-up . 89
The rising focus on innovation for economic development creates opportunities for emerging countries to revisit the work of Schumpeter . 90 Unlike their predecessors who had to contend with a limited reading of Schumpeter ’ s work , emerging countries have a much larger pool of knowledge to draw upon . First , they have access to Schumpeter ’ s prescient works , thanks to advances in technology . Second , they have access to experiences arising from the earlier applications of Schumpeter ’ s work . Third , and more important , there is a growing body of neo-Schumpeterian scholarship that offers an untapped reservoir of ideas that can be adapted to their contemporary needs . 91
Getting the state to perform these entrepreneurial functions requires a better understanding of the systemic nature of the public policy process . 92 It entails a level of institutional orchestration that cannot be achieved through simplistic notions such as correction of market failures . Taking this approach will also involve developing new policy instruments that reflect the structure and functions of innovation systems . 93 As emerging economies increasingly recognize that fostering innovation requires significantly different approaches , they might just become the flag bearers of policy approaches inspired by Schumpeter over a century ago .
Conclusion
The aim of this paper is to explore the
rejection of Schumpeter ’ s ideas by the founders of development economics . Contrary to popular perceptions , the absence of Schumpeter in contemporary development policy discourse is not a historical oversight . It is a result of nearly a decade of debate starting in the 1950s . The debate
89
A . Ebner , “ Public Policy , Governance and Innovation : Entrepreneurial States in East Asian Economic Development ,” International Journal of Technology and Globalisation 3 ( 1 ) ( 2007 ): 117 – 118 .
90
J . Fagerberg and K . Sapprasert , “ National Innovation Systems : The Emergence of a New Approach ,” Science and Public Policy 38 ( 9 ) ( 2011 ): 669 – 679 .
91
See , for example , Bengt-Åke Lundvall et al ., eds ., Handbook of Innovation Systems and Developing Countries ( Cheltenham , UK : Edward Edgar , 2009 ). See also D . Hartmann et al ., “ Applying Comprehensive Neo-Schumpeterian Economics to Latin American Economies ,” Structural Change and Economic Dynamics
21 ( 1 ) ( 2010 ): 70 – 83 .
92
E . Ramstad , “ Expanding Innovation Systems and Policy : An Organisational Perspective ,” Policy Studies 30 ( 5 ) ( 2009 ): 533 – 553 .
93
A . Wieczorek and M . Hekkert , “ Systemic Instruments for Systemic Innovation Problems : A Framework for Policy Makers and Innovation Scholars ,” Science and Public Policy 39 ( 1 ) ( 2012 ): 74 – 87 .
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