Innovation vs. Imitation: How to Reach the Technological Frontier
The economies of countries are constantly evolving. Many countries achieve rapid growth by adopting technology from abroad – in other words, they imitate. Yet imitation has its limits. At a certain point, countries must shift to their own ideas, innovations, and creativity. A new study by Ayaz Zeynalov, published in the prestigious journal Technological Forecasting and Social Change, shows when and why this shift happens.
When Growth is Driven by Imitation
Some countries remain far from the technological frontier, which gives them the advantages of backwardness and: the easiest path to growth for is imitation – adopting proven solutions from leaders. For a time, this strategy delivers relatively rapid growth because all that’s required is to adapt and take on established technologies and know-how.
But what happens when a country starts to approach the technological frontier? Can it still rely on imitation? “At this point, the business and political setup must shift from copying to original creation – that is, to innovation,” explains Zeynalov.
A New Way to Measure “Distance from the Frontier”
For a long time, researchers have been looking for ways to express how far a country is from technological leaders. Typically, the total factor productivity (TFP) indicator is used. However, Zeynalov turned to a different approach – the economic complexity index. According to the author, this index better captures the differences between countries and can more accurately estimate when a country reaches the point where imitation is no longer enough.
The study analyzed data from 95 countries between 1995 and 2019 and showed that imitation plays a huge role in the early stages of development. However, only up to a certain point. The results confirmed the existence of two crucial milestones:
- The point when imitation contributes much less to growth than innovation. At this moment, the “engine” of growth starts to change – original creation of new solutions takes center stage.
- Another boundary is the moment when imitation even slows down growth. A country that cannot move beyond imitation and adapt to innovative solutions may get stuck in a dead-end.
The Silent Enemy: The Middle-Income Trap
In many developing countries, a quiet but important battle is currently taking place: the so-called middle-income trap. “This occurs when a country reaches a certain wage level, but without the ability to innovate, it stagnates, as growth through copying becomes unsustainable,” says Zeynalov. According to the author, some countries are dangerously close to the point where their traditional growth model will no longer work.
“Successful transition from imitation to innovation fundamentally depends on the institutional framework,” warns Zeynalov. “Countries must have strong institutions and good governance, but their importance also varies according to the development phase. Different mechanisms support growth when a country is still in the imitation phase, and others when it is already leading in innovation.”
The Future Lies in Innovation
The research shows that the path from imitation to innovation is not only a technical challenge but primarily a strategic and institutional one. “Countries that still benefit from imitation today should begin actively investing in research and development, supporting innovation, and creating an environment that enables their citizens to create new technological solutions. If they fail to prepare, they may get stuck in the middle-income trap,” concludes Zeynalov.