Technological and Disruptive Innovations in a Nation’s Industrialization and Leadership Development

The turn of this new century has been witnessing the effort of various leading developed and developing countries in their attempt to materialize next round of industrialization by emphasizing on innovations. To potentially provide guidance to such national efforts, this paper explores the relationship between technological innovation and industrialization and the importance of disruptive innovation in the development of a nation’s international leadership. By employing the rigor of game theory, this work first looks at key conditions under which an established market invites competition and innovation. On top of such generally true results, it is consequently shown that technological innovation is a driving force behind industrialization and that disruptive innovation can assist a nation to become an international leader. Other than providing policy recommendations, this paper concludes with open problems for future research.