What the world can learn from economies that innovate without abundance

Bangkok, Thailand - Innovation is often associated with advanced technology, abundant capital, and strong infrastructure. But recent studies by researchers from the Asian Institute of Technology’s School of Management and their collaborators suggest that some of today’s most useful lessons on innovation may come from economies with limited resources, developing institutions, and businesses that must adapt under pressure.

These studies covered entrepreneurial networks, SME digital transformation, agricultural entrepreneurship, circular economy implementation, low-carbon business model innovation, and venture financing system development. Together, they show that innovation in emerging and low-income economies is not simply about adopting technology. It is about learning to connect resources, build trust, improve quality, draw on external knowledge, adapt business models, and develop institutions over time.

In Nepal, researchers found that entrepreneurs rely on both formal and informal networks to access finance, knowledge, and human capital. Formal ties help bridge gaps between entrepreneurs and resource providers, while informal ties foster trust and cooperation. However, when institutions are weak, networks can become fragmented, limiting new venture growth.

In Thailand, a study of electronics SMEs shows that digital transformation depends on a firm’s stage of development. Younger SMEs benefit more from acquiring external technologies and knowledge, whereas mature SMEs gain value by exploiting and commercializing their own technological assets. This challenges one-size-fits-all digital transformation policies.

In Malawi, research on cotton farms brings entrepreneurial thinking into agriculture. The study shows that entrepreneurial orientation can improve farm performance, but quality orientation is the key pathway that turns entrepreneurial behavior into stronger results. For smallholder farmers facing climate change, pests, soil decline, and market instability, innovation must translate into better quality and productivity.

The sustainability studies add another layer. Research on SMEs in India and Pakistan shows that circular economy practices become more practical when supported by frugal innovation - affordable, resource-efficient solutions that reduce waste, reuse materials, simplify production, and lower costs. In Thailand’s renewable energy sector, another study shows that low-carbon digital business models that use blockchain, IoT, AI, peer-to-peer energy trading, energy optimization, and carbon credit services evolve through stakeholder engagement, regulatory adaptation, and continuous learning.

A historical study of China’s venture financing system offers a long-term institutional perspective. It shows that entrepreneurial infrastructure is not built through a single policy blueprint. Over four decades, China’s venture financing system evolved through policy experimentation, industry activity, public-private interaction, and the gradual co-creation of new rules, actors, and market practices.

Taken together, the studies challenge the notion that emerging economies should simply copy innovation models from advanced economies. Instead, they show how countries facing constraints generate practical knowledge: how to innovate when capital is scarce, digitalize in stages, include farmers in innovation systems, make sustainability affordable, and build institutions through learning rather than through top-down design.

“Across these studies, we see that innovation is not only about technology,” said Professor Yuosre F. Badir of AIT’s School of Management, a co-author on several of the papers. “It is about how people, firms, and institutions learn to connect resources, respond to constraints, and create value in difficult environments.”

The findings offer concrete lessons for other countries. A country with weak entrepreneurial infrastructure can start by mapping how entrepreneurs access finance, advice, skilled workers, and market information, then strengthen the missing links between informal trust networks and formal institutions, such as banks, universities, accelerators, and government agencies. Countries seeking to help SMEs digitalize can avoid generic training programs by offering staged support: young firms may need help acquiring external technologies, while mature firms may need support to commercialize their own knowledge through partnerships or new services.

The broader message is that innovation policy should move beyond funding technology. Innovation needs government as a facilitator, industry as an experimenter, and entrepreneurs as adaptive learners. Governments can create stronger conditions for innovation by helping entrepreneurs access networks, supporting SMEs at different stages of digital readiness, making sustainability affordable, allowing low-carbon business models to be tested through regulatory sandboxes, and building financing systems through public-private learning.