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  • The Politics of Innovation: Why Some Countries Are Better Than Others at Science & Technology by Mark Zachary Taylor
  • Junmin Wang
The Politics of Innovation: Why Some Countries Are Better Than Others at Science & Technology By Mark Zachary Taylor New York: Oxford University Press, 2016. 444 pages. $27.95 paperback.

For decades, technological innovation has been widely acknowledged as a crucial element of productivity growth and has become "the industrial religion" (The Economist 1999) in today's era of global competition. Whereas more and more countries have made efforts in advancing their science and technology (henceforth S&T) competitiveness through a wide range of measures (e.g., building domestic institutions and policies fostering innovation; investing in S&T labor force, facilities, and equipment; and importing advanced technologies from the countries that have them or perhaps simply "stealing" them if at all possible), a key question is why some nations succeed at S&T progress but others fail. Mark Zachary Taylor's The Politics of Innovation seeks to solve this puzzle by examining two separate but highly pertinent research questions: First, how can nations innovate? Second, why can some countries innovate more and become the S&T leaders over the long run?

Clearly framed around these two questions, this book includes two main parts—one for each main research question given above—followed by a fascinatingly written introductory section (chapters 1–3). Taylor opens the book by embedding his research questions in the much-studied but still puzzling phenomenon termed by economic historian Joel Mokyr as "Cardwell's Law"—that is, technology in any nation enjoys a boom at some point, and progress slows down and then declines. However, although most explanations for Cardwell's law concern the rise and fall of nations in S&T performance across time and space, Taylor concentrates on national disparities in innovation rates over the course of the past five decades. Taylor assigns himself no small task indeed. He attempts to synthesize "over fifty years of theory and research on national innovation rates," deliver "a comprehensive introduction to the debate over national S&T competitiveness" (p. 18), and more importantly, beyond these goals, develop a novel theory called "creative insecurity" (inspired by Schumpeter's conception of "creative destruction") to explain why nations innovate (or not).

In part 2 (chapters 4–6) of The Politics of Innovation, Taylor carefully reviews, examines, and tests existing theories about how nations can and should work to achieve innovation competitiveness, by analyzing a broad range of [End Page 1] multiple, independent, nation-level quantitative datasets and several selected case studies (i.e., Israel, Taiwan, Ireland, and Mexico). Adopting a state-centered approach that I assume most political economists would use in investigating this type of research questions, Taylor appears to accept well the essential role of the government in domestic institution-building particularly in what he calls the "Five Pillars" of institutions and policies that are expected to be able to fix the "market failure" plaguing innovation. These pillar institutions include intellectual property rights, research subsidies, public education, research universities, and trade policy. Taylor also painstakingly examines the explanatory power of some other long-dominating and conventional political-economic wisdom from the theories of National Innovation Systems, "Varieties of Capitalism," and political institutions such as democracy and political decentralization in accounting for national disparities regarding innovation rates. However, surprising to perhaps most innovation scholars as well as Taylor himself, all these theories that "place institutions and policies at their core as both necessary and sufficient S&T progress" (p. 139) in fact receive much less empirical support than what we tend to assume or expect them to do. Instead, Taylor identifies from his data analysis that social networks—including both domestic networks between S&T labor force, local entrepreneurs, and investors, and international linkages between domestic innovators and global markets for exports, capital, and sources of knowledge and skills—matter more in determining national innovation rates. Building on this finding of "networks matter most," Taylor thus makes a compelling argument that the most innovative nations are those whose governments can design good institutions and policies that foster innovation and at the same time create and maintain networks to "store...

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