CID Graduate Student and Postdoctoral Fellow Working Paper No. 13

Economic Development and Innovation: Problem-solving in Scarcity Conditions

Smita Srinivas and Judith Sutz

November 2006

A publication of CID's Sustainability Science Program

Abstract

The aim of this paper is to contribute to the debate about innovation in developing countries. Innovation is not an unchanging element pervasive under all socio-economic conditions. We suggest that under the conditions of scarcity that prevail in underdevelopment—broadly understood as "not having enough" of inputs that are taken for granted in actual contexts characterized as industrialized—technological effort of a substantially different type emerges. Idiosyncratic innovative paths are followed; they may provide solutions for otherwise unsolved problems. We sketch a scarcity-induced innovation framework to give account of such paths; we suggest that this framework helps in understanding the specificity of "innovation under scarcity conditions" in developing countries. This understanding is critical for developmental purposes; we make a preliminary contribution.

Keywords: technological change, scarcity, problem-solving, innovation, economic development, local needs

JEL codes: O1, O33, Q55, B52

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