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The Technological Potential of Innovation Ecosystems

Economic Research Working Paper No.90


Author: Federico Moscatelli
Author: Julio D. Raffo
Author: Shreyas Gadgin Matha
Author: Christian Chacua
Author: Matté Hartog
Author: Eduardo Hernandez Rodriguez
Author: Muhammed A. Yildirim

Publication year: 2026

License: Attribution 4.0 International (CC BY 4.0)

DOI: English

In developing countries’ innovation activities, limited patenting suggests structural gaps that hinder technological progress. This paper investigates whether countries can leverage their scientific and productive capabilities to realize untapped technological potential. We analyze connections between trade, science, and technology across global innovation ecosystems and introduce an indicator to assess where countries are positioned to expand their technological capabilities. Our results show that the indicator predicts technological output growth, though growth slows when countries exceed their predicted potential, indicating diminishing returns. The indicator performs better in more complex ecosystems. These findings provide valuable insights for policymakers, offering a framework to address weaknesses in innovation ecosystems and foster balanced, sustainable technological development.

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