Many geographic economies are trying to keep up with the technological revolution to keep up with the leading economies. However, most of the regions face challenges that are linked to their economic status and the different types of players involved in the different regions. In an effort to develop innovative centers, various regions have faced challenges that have proven to be barriers to the growth of their tech development. A country like Japan has had a decline in their innovation industries which has led to economic decline and with the need for huge financing, continuity of innovation has been hampered. On the other hand, a country like China which depends on government-owned industries hinders the development of private companies with new innovative ideas (Engel, 2015). The type of ownership of industries affects access to capital for innovation therefore individuals with ideas have to rely on family financing which limits the realization of new technologies.
While the second largest economy creates a barrier by limiting access to funds by entrepreneurs, other geographies in South America have barriers to innovation due to their unhealthy economic development. Colombia and Mexico have economic factors that push away potential foreign investors and also limit the regions due to a lack of steady economic development. Brazil faced an economic recession which affected the country’s development and has had a long-term effect on the country’s ability to develop innovative hubs(Engel, 2015). To manage the economic decline, the government created policies to recover its economy which led to unfavorable taxation and neglect of infrastructure development. Infrastructure and government support, are key in developing silicon valleys and since the government cannot slash its spending to finance innovation, it becomes a barrier to the geographic ecosystem (Dvir, 2004).
Reference:
Dvir, R. Innovation Engines for Knowledge Cities: An Innovation Ecology Perspective. Retrieved from; https://scholar.archive.org/work/silq7joznvco5hcbdn5mx4mvji/access/wayback/http://innovationecology.com/papers/innovation%20engines%20for%20knowledge%20cities%20knowledgeboard%202003.pdf
Engel, J. S. (2015). Global clusters of innovation: Lessons from Silicon Valley. California Management Review, 57(2), 36-65. https://journals.sagepub.com/doi/abs/10.1525/cmr.2015.57.2.36
