Economic catch-up of BRICS and escape factors from the middle-income trap from a Schumpeterian perspective

Abstract

For this paper, we are going to compare five variables in the National Innovation System (Localization, Originality, Diversification, Cycle time of technology, and the Herfindahl-Hirschman Index) for BRICS countries (Brazil, Federation of Russia, India, China, and South Africa). To do so, the paper first classifies BRICS countries into three different groups: fast catch-up, catch-up, and slow or no catch-up. Then, the paper analyses the changes in those five variables for the thirty years using USPTO patent data. The paper finds that fast-catching-up BRICS countries have different trajectories for localization, originality, the cycle time of technology, and HHI from slower catch-up BRICS countries. Then, the paper discusses strategies for middle-income countries to break through the middle-income trap which is different from simply following advanced countries.