Innovation driven sustainability through high-tech innovation and reduced reliance on natural resources

This paper estimates the effects of high-tech innovation to address the challenge of natural resource dependency across OECD and non-OECD economies. Reducing natural resource dependency through innovation contributes to sustainable development, particularly though economic diversification and responsible resource use. Using a two-way fixed effects, we analyze a longitudinal dataset of over 150 economies from 2017 to 2021 to examine the nexus of open innovation and resource dependency. Results reveal a significant negative impact between high-tech innovation and natural resource rents in both developed and emerging economies, demonstrating that economic diversification through high-tech innovation effectively reduces reliance on natural resources. More nuanced findings demonstrate the effects are more pronounced in developed member states, suggesting the differential impacts may be related to the structural constraints and absorptive capacity of emerging economies that keep them more reliant on natural resources. This study contributes by recognizing economic development as a key boundary condition to outbound innovation in reducing natural resource rents. It integrates two independent literatures at multiple levels, namely the resource dependency and open innovation literature, through employing outbound innovation as a distinct and external channel of economic transformation through high-tech exports. It shifts the resource dependency debate from a structural perspective to a capability-based perspective, demonstrating how knowledge rents can substitute for resource rents in specific contexts.