ABSTRACT
Innovation capabilities determine the share of different entities in global value chain. Higher domestic value-added in global production chains is possible by building a stronger innovation system. This chapter aims to look optimistically into the future in the context of post-pandemic recovery to discuss the possible economic, political, and social changes in terms of challenges and opportunities for emerging countries. It presents the gravity of the COVID-19 crisis. The first challenge that countries face is concerning the structural transformation dynamics. The transformation of sectors and the whole economy toward higher value-added activities is reflective of their system of innovation. The second challenge that countries face is concerning the investment in innovation-related inputs. It is evident that other Asian countries need to invest a comparable amount of resources in Research and Development and institutional research to compete in the frontiers of technology in varied sectors for growth and sustainability.
