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The role of innovation as a major force of economic growth is not to doubt. Despite this, geopolitical challenges in recent years pose difficulties for countries, especially for those who struggle with lower GDP per-capita, to enhance innovative performance and grow. Building upon the national innovation system concept and using the methodological framework of country-level composite innovation indexes, this paper aims to explore features of innovation systems inherent in lagging economies and their relevance for economic growth. The analysis, based on a panel dataset comprising the Global Innovation Index elementary indicators on 76 countries during 2015–2021, demonstrates the lower initial state, but faster development of innovation system components in lagging economies. Crucial to their growth is the external validation of national innovation efforts, proxied by international trade and foreign investment indicators. In addition, a sustainable economic growth requires balanced and synergetic development of all components and functions. Therefore, bottom-up approaches are needed to sustain further growth of lagging economies, starting with the provision of effective resource allocation, knowledge creation and its diffusion. [ABSTRACT FROM AUTHOR]

Little is known about the different barriers that firms face as they advance with their technology uptake and tap into new markets. We show on a sample of 36,900 industrial enterprises that inwards-oriented firms had access to financial means but shied away from the economic risks associated with innovation activities. Exporters see opportunities for their innovation projects, but shy away from the investments needed. The failure to provide a supportive eco-system for innovation is one of the reasons why Russian manufacturers have not succeeded to integrate into global supply chains beyond the territories of the former Soviet Union. [ABSTRACT FROM AUTHOR]