7/27/2019 Technological Capability

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Technology… 

  is an integral part of industrialization and

development. But it is not often the prime

focus of attention.

  the subject of technology, and its importance

to industrialization, has cropped up regularly

but seldom centrally.

Key points on Technology and Industrialization

  Internalization of production means that

manufacturers are faced with many choices

about what to produce, how and where to

produce it, and therefore what technologies

to use.

  Technological changes, including the

introduction to microelectronic systems and

associated information technologies, have

increased flexibility of production. One

factory can now produce a wider range of

products and services.

  Technological levels and capabilities vary

between different Third World countries,

between enterprises in the same country andeven within enterprises.

  Technological capabilities have been critical

in countries, such as Brazil and South Korea,

where industrialization has been rapid.

  Low technological capabilities weaken the

bargaining position of most developing

countries in acquiring technology from

elsewhere.

  The choice of technologies available to

developing countries is limited. So

inappropriate technologies are often

developed locally or imported

Technological Capability involves:

  the ability to search for available alternatives

and to select appropriate technologies

  the ability to make selective use of

technology in producing goods and/or 

services

  adaptation of technology to suit specific

production conditions

  the further development of the technology as

a result of minor innovations

  the development of institutionally organizedresearch and development facilities

  conducting basic research.

Approaches to Technological Capability

Black Box : There was no need to look into it

because all that mattered was what went in and

what came outNeo-liberalism vs Structuralism

  by integration into the world economy, relying

on foreign technology, through direct foreign

investment and/or licensing

  by building a local capacity in technologythrough a process of “technological learning”. 

 Alternative Approach: Technological capability

should be taken seriously in its own right.

Building National Technological Capability

Foreign Technology and Technological Capability

Foreign Capital Investment 

  simplest method of importing foreign

technology: encouraging foreign capital

investment

Negotiating Technology Transfer 

*In South Korea there has been a close

collaboration between political and industrial

interests in electronics, which has allowed a strong

basis for restriction of foreign capital.

*India, by contrast, has not been so successful in

building up the negotiating power of South Korea

and as it moves into a period of liberalization

towards foreign capital, local firms are becoming

increasingly marginalized.

Benefits from Restriction : Access to foreign

technology on favorable terms is dependent on

bargaining power 

Education and Training

2 Kinds of Learning:

  the acquisition of technological skills and

knowledge by individual and, through them,

by organizations

  the acquisition of increased technological

capability (or technological learning)

3 Ways of Learning:  learning by doing

  learning by using

  learning from changing