The COVID-19 Crisis, National Innovation Systems, and World Development

In this think-piece, I reflect on what lessons innovation scholars and innovation policymakers in the developing world can draw from the COVID-19 crisis. While it has confirmed the fundamental importance of science and technology in coping with a major global challenge, it has also shown its limitations and the importance of institutions and organisational capabilities. While the crisis has demonstrated the necessity to build stronger national innovation systems (NSI) in the South, it has also simultaneously shown the need to go beyond national governance and move in the direction of a global innovation system. The COVID-19 crisis has reinforced new trends in technology and in global competition that challenge innovation system theory and innovation policy. The crisis stimulated the application and development of artificial intelligence and accelerated the concentration of intellectual capital in a handful of tech giants located in the US and China. While the volume of trade in digital services kept growing, there was a dramatic fall in the volume of global value chain trade in tangibles. These developments intensified the China-US rivalry and undermined transnational collaborations in science and technology. Countries in the South aiming at building stronger national innovation systems need to do so under new circumstances, where artificial intelligence is emerging as a strategic technology, where intellectual monopolies harvest data worldwide, where great powers are engaged in technological rivalry, and where linking up with global value chains for tangibles has become less of an option. One implication is that the issue of scale has become more critical than before; groupings of small and medium-sized countries need to integrate economically and politically in order to develop crucial digital capabilities and competitiveness. Such moves in the direction of forming transnational innovation systems are consonant with strategies to cope with global challenges.