Economic Complexity, Human Development, And Innovation Capability

Kara, Okan
This thesis theorises innovation capability within the Human Development and Capability Approach (HDCA) scope. Today, development thinking has increasingly focused on human beings and their freedoms. People need to expand their capabilities and utilise them to bring valued change. However, HDCA literature heavily concentrated on basic capabilities that limit its power to address complex challenges. We aim to extend the discussion towards complexity. We hypothesise that development is a 'continuous process of building and sophisticating capabilities' and economies need to pass certain complexity thresholds. Therefore, our research question is 'what are the threshold patterns for different country clusters?' The purpose is to discover thresholds that can inform our thinking regarding how one economy can deal with thresholds through innovation policies. We also propose a policy design framework (Four-P Model) as an analytical approach to structure the relationship between the capability space and innovation policy. Methodologically, we have developed a two-stage process that utilises machine learning algorithms. First, we search for the patterns of thresholds. Then, we concentrate on innovation capability to construct policy level recommendations. In this final stage, we also performed a case study by evaluating Turkey's innovation policy evolution. The case methodology is descriptive policy analyses built upon our quantitative analysis and serves as a sensitivity analysis of our analytical results. The main contribution of this thesis to the existing realm of knowledge is that: while innovation is an essential driver of development, economies face various degrees of complexity thresholds in transforming innovation capabilities into economic complexity.


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Citation Formats
O. Kara, “Economic Complexity, Human Development, And Innovation Capability,” Ph.D. - Doctoral Program, Middle East Technical University, 2022.