2. POLICY FRAMEWORK AND INSTITUTIONAL MECHANISM

In the past two decades, developing countries have been faced with the imperative challenge of establishing policies at the national level to support the process of innovation. Modernizing the productive infrastructure requires the creation of an appropriate policy-environment (within the framework of international economic relations and the trading systems) to stimulate productivity, competitiveness and the effective absorption and diffusion of new technologies. The developing countries are in the process of enhancing the interaction between the public and private sectors and are in pursuit of increasing cooperation among different economic activities, in such a way as to favour integrated technological progress and innovation at the macro and micro levels.