Long-term performance of innovation systems in East Asian developing countries: A structural analysis

To measure the performance of East Asian developing countries' innovation systems, we adopt a product space approach by considering the import and export flows linking each country to its trading partners over the long term (1980-2018). We apply economic dominance theory to construct and analyze this space. Using an extension of Pavitt's (1984) taxonomy proposed by Castellacci (2008), we classify manufactured goods into categories distinguished by the technological intensity required for their development, production, and diffusion. We propose indices of economic complexity to position countries in relation to each other, to identify significant developments, and to infer the capacity of a national innovation system to deepen a country's insertion into the global value chain based on the mastery of complex technologies. In this way, we identify three groups of countries: those whose current innovation system favors moving up the value chain, those caught in the middle-income trap and struggling to renew their innovation system, and those without a clearly structured innovation system.