Technological Innovation and Entrepreneurship in BRICS Economies: New Evidence from 2001–2023

This paper investigates whether technological innovation is an enabling factor for entrepreneurship in the BRICS countries (Brazil, Russia, India, China, and South Africa) from 2001 to 2023, and the role of government support in this respect. The paper applies a balanced macro-panel dataset, where entrepreneurship is defined as total early-stage entrepreneurial activity, and technological innovation is defined as resident patent applications per capita. Government support is defined as a composite governance index, while human capital and trade openness are defined as structural controls. The study employs static panel models and a Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) model. The results show that technological innovation is not an entrepreneurship driver in BRICS countries. The static fixed effects model shows a negative relationship, while the CS-ARDL model shows a statistically significant negative short-run relationship and a tendency of convergence in the long run. The government’s role does not have a significant direct or conditioning effect, while human capital has a positive effect on entrepreneurship in the short run. The results indicate that innovation in BRICS countries is state-led and innovation is not an automatic driver of entrepreneurship. The paper adds to the literature by showing that technological innovation is a necessary but insufficient condition for entrepreneurial dynamism in large emerging economies. The importance of innovation policies targeting entrepreneurs, improved access to finance for SMEs, and upgrading human capital is highlighted in the achievement of innovation-driven entrepreneurship.