Regulating the negative externalities of enterprise cluster innovations : Lessons from Vietnam

Innovation has been acknowledged as contributing to development, in particularly inclusive innovations that involve and benefit poorer groups in developing countries. However, such innovation may have negative externalities. Most often external regulation is required to reduce these effects. However, it is often not enough, and in many developing countries the required institutional context is not present to enable external regulation. Hence a case may be made for internal regulation of inclusive innovation. Helping to fill the gap in our knowledge on internal regulation of innovation externalities in developing countries, we explore four cases of innovation in informally-organised small producers’ clusters Vietnam. From this we propose a model of internal regulation as a societal process.