Jeffrey Ding
Why Diffusion Capacity?
Why is it so important to distinguish between a state’s capacity to bring forth new-to-the-world inventions and its capacity to adopt innovations at scale? When there is a substantial gap between these two variables, assessments based solely on innovation capacity indicators will prove misleading because they undervalue the process by which new advances are embedded into productive processes. Specifically, a “diffusion deficit” characterizes situations when a state has a strong innovation capacity but weak diffusion capacity, which suggests that it is less likely to sustain its rise than innovation-centric assessments depict.
In many cases, there is not much daylight between a state’s diffusion capacity and its innovation capacity. These two parameters can be highly correlated. After all, the state that first pioneered a new method has a first-mover advantage in the widespread adoption of that technique. In addition, absorbing innovations from international sources is difficult without the tacit knowledge embedded in the original context of technological development. Diffusion and innovation are entangled, overlapping processes.
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