Abstract
This study shares some empirical insights for adopting a national innovation system (NIS) to catalyze capacity building in small states with relatively low technology-based research and development resources. These countries may have to start further back than other nations; however, this chapter maintains that with the right NIS, latecomers can have the advantage of catching up economically. This study explores Brunei Darussalam's journey to catalyze innovation for sustainable economic growth, particularly digitalization and deep tech. The study found that establishing a national innovation ecosystem could be effective with national consensus and acceptance behind the approach. It emphasizes building critical infrastructures, institutions, and governance to promote efficient knowledge flow, talent development, digital literacy, and overall absorptive capacity. Because Brunei is a small state, coordinating and facilitating cohesive linkages among its key stakeholders can strategically mobilize change. As Brunei Darussalam embarks on such a trajectory, it must determine a relevant model.
TopIntroduction
A significant amount of research has dealt with the trajectories of small states in their efforts to innovate (Easterly & Kraay, 2000; Kattel et al., 2013; Peterkova, 2020). Works go back more than a decade with a publication from Edquist and Homeen (2008). The authors acknowledged and supported Kattel et al. (2013)’s views that most innovation systems focused primarily on highly developed countries, such as South Korea and Finland, and glossed over issues of small states. This might have led to obscurity between countries with small state characteristics and developing economies. In this study, the authors established small state refers to the state’s determinant of relatively sub-optimal economic deposition in terms of its capacity to innovate and its resilience to global economic shocks. The key question is how small states, such as Brunei Darussalam, can maximise capacity, flow economic growth away from oil and gas, and offer alternative pathways to sustainable development. This study proposes to maximise economic opportunities through innovation by optimising knowledge flow and linkages among stakeholders. This can be done by establishing an appropriate national innovation ecosystem contextualised to Brunei. This paper will then touch upon the opportunities for small states, such as Brunei Darussalam, to undertake economic catch-up by focusing on specific technological domains attributed to two unprecedented disruptive circumstances, the global COVID-19 pandemic and the technologies of the fourth industrial revolution.
Key Terms in this Chapter
Outside-In and Inside-Out Strategy: A conceptual approach leverages the theory spillover of knowledge from Foreign Direct Investments, multinational corporations, and state-owned enterprises into local companies through spin-offs initiatives Domiciling investing in identified knowledge domains to local firms, including small and medium enterprises and local institutes of research and learnings to facilitate innovation and growth.
Global Halal Supply Chain: The supply chain interconnects in the production, sourcing and manufacturing, mainly in the food, pharmaceuticals and cosmetics industry that preserve the halal integrity and compliance from source to consumer. The information networks can spread across regional and international producers, suppliers, manufacturers and services providers.
Level I, II, and III Knowledge Flow: Level I is a basic level of knowledge flow that a community defines, captures, and shares in its informal way. Level II refers to knowledge flow that is managed, defined, captured, and shared conscientiously within a framework. Level III refers to capturing and using knowledge through organised processes and behavioural attributes supported by a technical framework.
Think Global, Start-Local: A strategy to adopt and conflate two key determinants, meeting local demand with focused opportunities in the global markets. Product development and refinement are carried out at the local markets to position products are ready to scale up and out into the global markets. These are more related to digitalisation, where a domestic application can be easily scaled up to an international consumer base.
Association of Southeast Asian Nations (ASEAN): Association of Southeast Asian Nations, established on 8 August 1967, consisted of ten member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) aims to accelerate economic growth, social progress and cultural development.
Regional Comprehensive Economic Partnership (RCEP): The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between the ten member states of ASEAN and its six FTA partners (Australia, China, India, Japan, New Zealand, and Republic of Korea).
Digital Economy Masterplan: The enablers for Brunei Darussalam’s Digital Economy to propel Brunei Darussalam to the status of a Smart Nation. For Brunei Darussalam, Smart Nation is driven by Digital Government, Digital Economy and Digital Society. The Digital Economy Council (DEC) are the sponsor of Brunei Digital Economy Masterplan 2025.
NSI (National System of Innovation): The framework in which the relationships and linkages and how each element or node interacts with each other concerning the flow and diffusion of knowledge to enable innovation to take place, this can be termed as the national innovation ecosystem. NSI and NIS (National Innovation System) are interchangeably and commonly used in literature discussing the National Innovation System. This study uses the abbreviation NIS throughout to maintain consistency.