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Innovation policy in a global economy

Jason Potts (School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Article publication date: 7 November 2016




The purpose of this paper is to examine how national innovation policies strategically interact to form emergent de facto global entrepreneurship and innovation policies.


Reviews the innovation economics theory and policy literature, synthesizing the existing work into three models (autarky, cooperation and competition), then adds four new models of strategic interaction (asymmetric information, duopolistic competition, competitive factor mobility and complementary assets).


The different models predict very different outcomes. Therefore, it matters which model is true. Entrepreneurship and innovation policy needs to start with an improved science of strategic global interaction of national innovation policy.

Research limitations/implications

Conceptual approach only, without empirical analysis, calls for empirical analysis to test the different models.

Practical implications

Points to the problem of absence of global coordination in innovation policy arising from strategic interactions between national innovation policies. Recognizes that entrepreneurship public policy is caught in this strategic game, and that there are missing global institutions here.

Social implications

Improved innovation policy should enable more effective entrepreneurial environments.


Proposes seven models for understanding global strategic interaction of innovation policy, out of which four are new. These new ones are highly relevant to entrepreneurship policy.



Potts, J. (2016), "Innovation policy in a global economy", Journal of Entrepreneurship and Public Policy, Vol. 5 No. 3, pp. 308-324.



Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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