Innovation and natural resource-based development: case of natural rubber sector in Kerala, India

Abstract

It has long been held that natural resource abundance retards economic growth. Studies using innovation system perspectives, however, suggest that natural resource abundance per se need not stand in the way of evolving a growing and diversified economy while the absence of learning and innovation could. In this context, the present study explores why Kerala has not been successful in evolving new production and industries linked to established natural resource industries. This issue has been addressed by taking the case of natural rubber known for its R&D-led output growth and productivity enhancement. Analytically, it draws insights from the ongoing discourse in the innovation system literature that distinguishes between narrow and broad approaches to innovation processes. It is argued that while the narrow approach to innovation could lead to increased productivity and growth of natural rubber under tariff protection, it could not help in evolving a vibrant rubber-based industrial sector by harnessing backward and forward linkages. In sync with the studies that underline the complementary role of science-based learning and experience-based learning in accomplishing innovation-led long-term development, the paper makes the case for evolving broad innovation strategy in natural rubber to build linkages among various actors and heterogeneous knowledge bases.