This paper reviews the literature on innovation to build an agenda for rese
arch on innovation diffusion in developing countries. The main ideas on inn
ovation diffusion are discussed, aiming at identifying the key aspects that
determine the introduction and development of new technologies in an econo
my. Analysis of the literature suggests that innovation diffusion depends o
n three contextual aspects that are economy and government, technology stra
tegies of firms, and management of innovation. Based on this analysis, four
areas for research on the subject are identified, aiming at increasing the
knowledge about mechanisms and approaches of innovation diffusion in devel
oping countries. (C) 2001 Elsevier Science Ltd. All rights reserved.