- For developing countries, achieving competitiveness in technology-driven
world calls for strengthening competitive advantages and building new capabilities.
This largely depends on the extent and efficiency of enterprises adaptive
capabilities to deploy new production and management technologies, upgrade
them over time and ultimately create new technologies—in other words
on enterprises’ capability to innovate and learn in a broad sense.
- Free inflows of trade, investment and knowledge do not necessarily ensure
that that enterprises will learn efficiently. Enterprises in developing countries
need to innovate and learn as parts of a system—a network of enterprises,
institutions and markets. Innovation and learning systems can differ greatly
in their ability to stimulate or retard process of innovation and learning,
depending on the quality, density and interaction of their various elements.
- A strong innovation and learning system tends to produce a larger number
and diversity of efficient industrial enterprises, while a weak system relatively
few.
- A more competitive setting generally results in greater technological effort
but there may be legitimate reasons to protect infant industries to help them
overcome the initial costs of learning.
- Given market and institutional failures, the efficacy of the innovation
and learning system reflects the impact of government policy on its various
elements.
- The policy challenge for developing countries is to improve some elements
of the systems and more important, to formulate a coherent strategy for industrial
and technological development. This has been done efficiently in some East
Asian economies and the results have been spectacular.
- Enterprise can accelerate its acquisition of technological capabilities
by linking up with other firms or institutions, locally or abroad, through
formal or informal ties to obtain information, purchase machinery, acquire
bits of new technology, or new knowledge from consultants.
- Tapping into global value chains, especially in knowledge– intensive
sectors can be a good means to enter global markets and gain access to new
technology and knowledge.
- Strategically it makes a lot of difference what linking choice is made,
as entry into different technologies involves different innovation and learning
processes, but this is also heavily constrained by enterprise competence and
the options available.
- Effective leveraging of external resources from the new relationships with
outsiders depends on investing in learning to master process and product
technologies, to consciously build the foundation for improving current technologies,
and to create new ones.
- Building industrial capabilities through pursuing linking, leveraging and
learning starts with an in-depth analysis of key factors of competitiveness,
and the various options for linking a developing firm to sources of technology
and knowledge.
- Leveraging assumes strategic decisions on the choice of needed technology
and on specific means of knowledge acquisition.
- Learning involves the actual process of capability enhancement through
learning by doing, learning by interacting, learning by monitoring, and learning
by formal training— the choice will depend on the type of linkage and
leverage involved. The learning process is difficult and complex; it lies
at the heart of the arduous process of industrial innovation and development.
- Manifestations of innovation and learning include using existing technology
better, adapting and improving processes and products, moving up the value
chain, and moving into activities that are more complex—both for enterprises
and for clusters.
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