Audrey Paul Ndesaulwa^1,, Jaraji Kikula²

Over the period since 1970s, developed countries have improved its relative productivity performance, but there remains a significant gap in market sector productivity between Developed and developing countries. Much of the gap between them is due to lower levels of capital intensity and skills. However, even taking these into account, there remains a significant gap. This reflects not just a weakness in high tech areas but an inability to absorb best-practice techniques and methods in wide swathes of the market sector. Part of this is due to a weakness in technological innovation despite a high quality science base. This includes comparatively low and falling levels of R&D and patenting as well as a distinct lag in the diffusion of innovations relative to other countries. This paper illustrates why technological innovation is considered as a major force in economic growth and focuses on some of the most distinctive features of innovation in the highly industrialized economies of the OECD area. In particular, the paper attempts to examine a primary single feature, “uncertainty” that dominates the search for new technologies by drawing several cases on the developed countries experience. It also touches on the impact of technological innovation in the developing countries and how it is transforming their business.

innovation, technology, productivity growth, technovation