The Role of Technology and Innovation Policy in Boosting Technological Catch-up

Technological catch-up refers to the process of closing the technological gap between a latecomer and an advanced country. It is argued that this process is an antecedent for boosting economic growth. Technology and innovation policies are pivotal in the success of technological cath-up as there is a constant need for adapting policies with technical changes. The experience of successful countries demonstrate an important transition from industrial/trade policies to technology/innovation policies. It means that trade protection and currency exchange policies are not suffice for enhancing technological capabilities in the domestic industries, therefore, states have to play an active role in finding and exploiting the windows of oppurtunities mainly arise from technological disruptions. The paper tries to provide a framework for analyzing the role of government in this respect. Intriguingly, the historical record shows that the Iranian government did not adopt such a transition. Recent efforts to use technology and innovation policy tools were also brought limited success because those policies were not designed based on windows of oppurtunities.