The Soft Foundation for National Innovation

In the current literature of national innovation, economic studies offer rich knowledge of a nation’s “hardware” for shaping its technological innovation. However, most economic studies leave many institutional and social elements that do not appear to have immediate, direct effects on economic outcomes out of their analyses. The central theoretical goal in this paper is to develop a “high-context” research approach and a “thicker” theoretical account to examine a developing nation’s software for pursuing technological innovation. Specifically, I incorporate a sociological perspective into the political economy studies of development, using a more comprehensive lens through which we can disclose contextual features in political, social, and cultural domains that shape, enable, or disable a nation’s technological change. I argue that the structure-level factors (e.g., political regime, institutional characteristics, and social factors) that help foster social consensus and incentivize a society to pursue long-term, comprehensive goals promote a nation’s innovation. The micro-level cultural factors (e.g., the individuals’ perceptions, beliefs, and values for trust, creativity, entrepreneurship, risk and long-term goals) also affect national innovation. Moreover, the structural factors mediate the role of the cultural factors in shaping national innovation. It is argued that the hardware factors (e.g., financial investments, economic policies, and infrastructures) may be effective in helping a nation’s economic take-off during its initial development stages, especially if the nation can gain access to “the low-hanging fruits” and imitate the successful technological and management knowledge from the advanced nations. However, the software factors that are deeply rooted in a nation’s political, social and cultural soils will play a more deterministic role in a nation’s indigenous and breakthrough innovation.