Enhancing the Role of Knowledge and Innovation for Development1

The aim of this paper is to improve our understanding of the nature, extent and importance of knowledge creation, development and commercialisation in developing countries. The article focuses on the process through which “new” knowledge is converted into beneficial socioeconomic outcomes in developing countries. It recognises that a wide range of science and technology capabilities and activities are critical in this process and identifies the different forms of technological capabilities that underpin the process. It is argued that there is a deficiency of non-research and development specific capabilities in developing countries and that this constitutes a major drawback to the innovation process. The paper also discusses the critical role of demand in innovation processes and demonstrates how the demand of lowincome earners in developing countries is driving changes in the global investments in innovation. Innovation in developing countries is increasingly focusing on the market rather than the technology.