A measure of technological capabilities for developing countries ☆ Nabaz T. Khayyat ⁎, Jeong-Dong Lee Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University, San 56-1, Sillim-Dong, Kwanak-Gu, 151-742 Seoul, South Korea article info abstract Article history: Received 7 December 2013 Received in revised form 6 August 2014 Accepted 10 September 2014 Available online xxxx The study was conducted to develop an index as a new measurement tool analyzing the innovativeness of developing countries. The role of science and technology in enhancing the rate of innovation is also investigated. The index is estimated for 61 countries observed during 2003–2008. The countries are classified into three groups based on their innovation level. The highest rate of innovation was noticed in China, followed by Estonia and Malaysia. The lowest innovation rate was reported in Iran, Bangladesh, Tadzhikistan, and Cambodia. It is recommended that governments (1) to allocate significant share of their budgets to the factors that enhance technological capability such as the science education, gross education enrollment rate and internet connectivity, (2) to promote policies of national awards for scientists and researchers who make sound breakthroughs in science and technology, (3) to develop international relations in the social, economic, cultural, and scientific spheres, (4) to modify school curriculum and syllabus, so that higher emphasis is given to the creativity and spontaneity of the children, (5) to relax portion of corporate taxes for developing an innovative way of product and production processes, which are environmentally friendly and economically viable. Finally, (6) the special focus must be given to the encouragement of local organizations to conduct the specialized training programs to promote innovation activities. © 2014 Elsevier Inc. All rights reserved. JEL classification: C19 C49 I32 J24 O30 O32 Keywords: Innovation index Technological capabilities Innovation diffusion Human skills Socio-economic indicators 1. Introduction The definition of innovation has evolved over time. In Drucker (1985) innovation is defined as the specific tool of entrepreneurs and the means for exploiting the change as an opportunity for a different business or services. Damanpour (1991) defines innovation as any practice that is new to organizations, including equipment, products, services, pro- cesses, policies, and projects. More recently, Afuah (2003) proposed that innovation is the use of new technical and administrative knowledge to offer a new product or service to customers. It is a process of coming up with new ideas leading to higher convenience for human existence. In other words, innovation is a gradual process of converting the opportunity into new ideas which will be further employed for develop- ment of new practices leading to technological advancement (Tidd, 2001). The inter-relationship between science and technology and innovation is significant. They both positively influence each other. The existing literature suggested that the rate of innovation and contribution from science and technology has not been satisfactory in several developing countries in Asia, Middle East, South America, and Africa (Almeida and Fernandes, 2008; Archibugi and Coco, 2004; Fagerberg and Verspagen, 2007). Though some types of methodologies were used for measuring the extent of innovation in few studies, they lack the clarity in identifying the extent of innovation in Technological Forecasting & Social Change xxx (2014) xxx–xxx ☆ The authors are grateful to anonymous referees and the Editor of the journal for very useful comments and suggestions on an earlier version of the manuscript. ⁎ Corresponding author. Tel.: +82 2 880 9298; fax: +82 2 873 7229. E-mail addresses: nabaz@snu.ac.kr (N.T. Khayyat), leejd@snu.ac.kr (J.-D. Lee). TFS-18080; No of Pages 14 http://dx.doi.org/10.1016/j.techfore.2014.09.003 0040-1625/© 2014 Elsevier Inc. All rights reserved. Contents lists available at ScienceDirect Technological Forecasting & Social Change Please cite this article as: Khayyat, N.T., Lee, J.-D., A measure of technological capabilities for developing countries, Technol. Forecast. Soc. Change (2014), http://dx.doi.org/10.1016/j.techfore.2014.09.003