Laws in developing countries generally reflect their unique cultures, which may restrict innovation and risk-taking, throwing obstacles in the path to development. Strong legal mechanisms, including intellectual property rights and patent protection, allow innovation to thrive.

More than elsewhere in Asia, Southeast Asian countries emphasize the economic value of intellectual property rights on patents, but enforcement varies and so does their attraction for investors.

Beyond legal mechanisms, innovation centers stimulate growth and innovation.

Government-protected technology parks link universities and state companies, and investors know they have a degree of security and won’t have problems down the line. Innovation comes from a meeting of minds, and while there is a risk that specific research may lead nowhere, it’s outweighed by the potential profit from unanticipated spin-off results.

The more freedom a country gives its enterprises, the more innovation it could produce.

The People’s Republic of China and India offer a curious comparison.

Read the transcript

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Read the working paper

https://www.adb.org/publications/law-culture-and-innovation

Read the blog post

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About the authors

Douglas Cumming is a professor and Ontario research chair of the Schulich School of Business, York University, Canada

Sofia Johan is an extramural research fellow of the Tilburg Law and Economics Centre, University of Tilburg, The Netherlands

Know more about ADBI’s work on innovation

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