Innovation policy in a global economy

Abstract

Purpose The purpose of this paper is to examine how national innovation policies strategically interact to form emergent de facto global entrepreneurship and innovation policies. Design/methodology/approach Reviews the innovation economics theory and policy literature, synthesizing the existing work into three models (autarky, cooperation and competition), then adds four new models of strategic interaction (asymmetric information, duopolistic competition, competitive factor mobility and complementary assets). Findings The different models predict very different outcomes. Therefore, it matters which model is true. Entrepreneurship and innovation policy needs to start with an improved science of strategic global interaction of national innovation policy. Research limitations/implications Conceptual approach only, without empirical analysis, calls for empirical analysis to test the different models. Practical implications Points to the problem of absence of global coordination in innovation policy arising from strategic interactions between national innovation policies. Recognizes that entrepreneurship public policy is caught in this strategic game, and that there are missing global institutions here. Social implications Improved innovation policy should enable more effective entrepreneurial environments. Originality/value Proposes seven models for understanding global strategic interaction of innovation policy, out of which four are new. These new ones are highly relevant to entrepreneurship policy.