An evolutionary perspective on economic catch-up by latecomers

Abstract

This paper proposes an evolutionary view of economic catch-up by latecomers, considered as a long-run process of closing the gap in capabilities by promoting learning and innovation in interaction with innovation systems (national, sectoral or regional). According to this perspective, catch-up is viewed as a dynamic evolutionary process which is not deterministic and cannot be planned in details because it faces uncertainty and continuous change; is associated with a variety of exogenous events (windows of opportunity) and is the result of the idiosyncratic behavior of heterogeneous actors characterized by different understanding, views and experiences. This process leads to a variety of responses and strategies by latecomer firms and countries, even in the presence of similar external technological or market conditions. One major point that emerges from this perspective is that there is a strong complementarity between learning and capabilities by domestic firms and the national, sectoral, and regional systems in which firms operate. The paper also discusses various strategies, such as detours and leapfrogging, along the stages and the different paths and trajectories that this long-term evolutionary process of countries and sectors follows.