Indigenous Technological Capability Research Articles

Analysis of Trending Hi-Tech and Software Industry in Bangladesh

Hi-Tech/Software Technology parks are being developed in many countries to create an efficient work environment for knowledge based industrial development. Major aim of these technology parks is to attract foreign companies to set up operations and to transfer the indigenous technological capability for the development of the local industries. The aim of this work is to find out factors that influence technology park development and a suitable strategic framework for successful implementation of Hi-Tech (HTP) and Software Technology Park (STP) in Bangladesh. For this study Analytic Hierarchy Process is applied as a Multi-Criteria Decision-Making Method (MCDM) which is a technology assessment tool. The assessment has been conducted by considering infrastructure, strategic & business support & governance as criteria and basic facility, digital facility, social facility, research & strategic facility, industrial chain & innovation facility, capacity development, policy support, operational modality, and park management as sub criteria. IBM SPSS (Statistical Package for the Social Sciences) software also used for identifying the key variables.

The AEC and a Technology-Driven Industrial Catch-Up: Three ASEAN Country Cases

ABSTRACT There is a growing consensus that effective Science, Technology, and Innovation (STI) policies, aimed at supporting long-term national structural transformation, are a crucial element in helping latecomer countries escape from the middle-income trap. Citing cases of Northeast Asian catch-up and Latin American middle-income traps, scholars emphasize that the key to catch-up is a triple-helix coordination that is used to transform foreign technology into indigenous technological capabilities. Thus, ideally, the expansion of the global production network, as promoted by the ASEAN Economic Community (AEC), provides opportunities for middle-income ASEAN countries to implement this technology-driven industrial catch-up strategy. This paper investigates three middle-income ASEAN countries (Malaysia, Thailand, and Indonesia) to argue that the AEC, as an open market-led economic regionalism scheme, does not have the ability to create a strong sense of urgency on the part of national governments to alter their national STI policy directions. As resource-abundant countries, Malaysia, Thailand, and Indonesia have yet to find any urgent need to prioritize the upgrading of indigenous manufacturing over natural resource-based technological developments. For these three countries, the AEC amplifies the need to compete against other ASEAN member countries instead pushing them to pursue industrial catch-up collectively. Keywords: economic regionalism, STI, industrial catch-up, ASEAN DOI : https://doi.org/10.33005/jgp.v7i02.1832

Strategies for Improving the Capabilities of a Weak Main Manufacturer in Complex Products Systems

This paper examines possible strategies for helping a weak main manufacturer to improve its indigenous technological capabilities. We consider two competitive suppliers and one main manufacturer that exhibit differential abilities within a supply chain of complex product systems (CoPS). The weak main manufacturer is focused on encouraging a powerful supplier to license its technology to a domestic supplier and on cultivating a relationship with the domestic supplier. We have designed a cost-sharing (no-licensing, NL) contract and a technology licensing (TL) contract to facilitate cultivation of the supplier relationship and cooperation with regard to technology. The optimal decisions and comparative analysis are characterized under a scenario of cost-sharing and technology licensing based on a benchmark model. The results show that both contracts are effective with respect to technology cooperation and supplier cultivation. However, additional findings show that the most efficient scenario is associated with the TL contract. Numerical examples have been employed for analyzing the validity of a variety of strategies. as well as determining the effect of key parameters on optimal decisions. Useful management insights regarding cooperation strategy and optimal decisions are also obtained.

Strategic cooperation with capital-constrained supplier and downstream competition in complex product systems

The paper characterizes cooperation and coordination strategies in complex product systems (CoPS). Capital-constrained supplier and downstream competition are considered in a “manufacturer-suppliers (MS)” mode with a weak main manufacturer and a powerful supplier. The capital-constrained supplier provides a key element to the main manufacturer and encroaches in the downstream market through simultaneous production of substitutable final products. The weak main manufacturer designs a revenue-sharing contract based on a relationship-specific investment to cooperate with the powerful supplier and finally improve its indigenous technological capability. By building Stackelberg and bargaining games, the co-opetition equilibriums and coordination strategies are derived and compared under different conditions. The results show that the cost structure, the abilities of the two players, and the ability of the main manufacturer’s technology learning have significant effects on the optimal strategies; moreover, the impacts of the threshold value of the supplier’s capital and the relationship-specific investment on the optimal cooperation strategies are very different. Overall, the coordination strategy can alleviate downstream competition and enhance both players’ profitability effectively.

Relating Vertical Specialization to Indigenous Technological Capability Growth: The Case of China

It remains a challenge to empirically verify whether the large scale of exports are results of China’s export-oriented growth strategy and participation in global vertical specialization (VS) and has this transformed its indigenous technological capability. In the current literature of export performance study, however, there is a methodological gap in quantifying the domestic contents of exports from total exports. Therefore, the domestic technological change cannot be clearly identified and analyzed. This article bridged the gap by employing a unique Input-Output model to derive the domestic contents from total exports and to analyze the nature of related technological change. Our data analysis of China’s exports of manufacturing products for 1992–2009 reveal: (1) China’s participation in the global vertical specialization in high-tech sector grew accelerated chronically; (2) the VS participation was more aggressive in high-tech than in the medium-tech, low-tech and resources-based sectors; and (3) the net domestic contents in China’s exports in high-tech sectors grew much faster than the other sectors. The findings indicate that China’s export-oriented growth strategy, instead of creating dependence on low-tech and resource-based exports, had led to a rapid growth in sophisticated high-tech manufacturing with its indigenous capability.

Strategic Cooperation with Differential Suppliers’ Ability under Downstream Competition in Complex Products Systems

This paper investigates the strategic cooperation of two competitive suppliers with different abilities and a weak main manufacturer in Complex Products Systems (CoPS), where a main manufacturer signs a revenue-sharing contract based on a relationship-specific investment with the stronger supplier. The stronger supplier provides one key element to the main manufacturer and encroaches on the downstream market by producing substitutable final products simultaneously. We consider multi-period decisions, by building different models based on centralized, decentralized, and cooperative decisions. The equilibrium strategies are characterized under downstream competition, and optimal cooperation strategies are derived by building multi-period game models. The results show that strong cooperation can enhance the economic performance of each individual as well as the whole supply chain. The weak main manufacturer would face the risk of strong suppliers’ supply interruptions when the competitive degree of suppliers and downstream competition are fierce enough under decentralized decisions. Additionally, the gap in the abilities of the two competitive suppliers reduces the main manufacturer’s profitability. However, the revenue-sharing contract based on a relationship-specific investment can motivate the strong supplier to establish cooperation relationship and improve both stakeholders’ profitability. Moreover, strategic cooperation is efficient to prevent the strong supplier encroaching on downstream and has a positive impact on boosting the weak main manufacturer’s market share. Meanwhile, nurturing a domestic supplier is an effective measure for improving competitiveness and indigenous technological capability of the main manufacturer in CoPS. Finally, some useful management sights on cooperation strategy and optimal decisions are derived.

AKIBAT KEBERGANTUNGAN ALIH TEKNOLOGI BAGI NEGARA SEDANG BERKEMBANG

<p>Technology transfer in terms of business is an asset created through investment with high risk and large costs. On the other hand, mastering technology enables the owner to gain strength not only in the economic field, but also socially, as well as politically. Therefore, it is natural for technology owners to try to maintain the technology they have. However, due to dependence on technology, developing countries have to pay high prices for the purchase of these technologies. In addition, developing countries are also not able to exercise control of the industries built, and also will not succeed in develop“indigenous technological capability”.</p>

Natural, Effective and BOP-Constrained Rates of Growth: Adjustment Mechanisms and Closure Equations

The interaction between the effective ( y E ) and the natural rates of growth ( y N ) is a central part—implicitly or explicitly addressed—in all growth models. A stable equilibrium requires these two rates to converge; otherwise, one or more key macroeconomic variables would be rising or falling without bounds. In addition, the Keynesian tradition stressed the key role of the Balance-of-Payments constraint as a determinant of the equilibrium growth rate in the long run ( y BP ). This paper discusses alternative mechanisms through which these three growth rates converge and relates them to different theoretical approaches to the determinants of growth. With this objective, we extend the model suggested by Setterfield (2010) to include the evolution of the North-South technology gap and the pattern of specialization as key components of the Kaldorian productivity regime. The importance of the National System of Innovation in shaping the learning parameters and outcomes of the model is stressed, drawing from the Schumpeterian literature. A successful development strategy may emerge when the NSI enhances indigenous technological capabilities that allow the South economy to catch-up with the technological frontier. JEL codes : E12, F43, O30

Natural, Effective and Bop-Constrained Rates of Growth: Adjustment Mechanisms and Closure Equations

The interaction between the effective (yE) and the natural rates of growth (yN) is a central part — implicitly or explicitly addressed — in all growth models. A stable equilibrium requires these two rates to converge; otherwise, one or more key macroeconomic variables would be rising or falling without bounds. In addition, the Keynesian tradition stressed the key role of the Balance-of-Payments constraint as a determinant of the equilibrium growth rate in the long run (yBP). This paper discusses alternative mechanisms through which these three growth rates converge and relates them to different theoretical approaches to the determinants of growth. With this objective, we extend the model suggested by Setterfield (2010) to include the evolution of the North-South technology gap and the pattern of specialization as key components of the Kaldorian productivity regime. The importance of the National System of Innovation in shaping the learning parameters and outcomes of the model is stressed, drawing from the Schumpeterian literature. A successful development strategy may emerge when the NSI enhances indigenous technological capabilities that allow the South economy to catch-up with the technological frontier.

Could fiscal policies induce green innovation in developing countries? The case of Brazilian manufacturing sectors

ABSTRACTBrazil is the first major developing country to pledge for absolute reductions in greenhouse gas emissions. This article explores the extent to which fiscal policies could contribute to this reduction and to greening the Brazilian economy. It was found that the use of green fiscal policies is at an early stage in Brazil, but a growing number of measures have been adopted in recent years led by subnational-level policies. An econometric analysis of 24 Brazilian manufacturing sectors for the years 2001–2008 shows that some fiscal instruments, such as low-cost (subsidized) finance for innovation and fiscal incentives for sustainable practices, have been effective in inducing green innovation. However, less than 14% of more than 100 thousand companies included in the study have adopted greener technologies. Even though Brazilian green fiscal policies have been rather uncoordinated and ad hoc, their significant impact on the uptake of green technologies indicates these can play an important role in a transition to a green economy.POLICY RELEVANCEFaced with the challenge of reducing its greenhouse gas emissions in absolute terms, Brazil now needs to put in place policies to help deliver the country’s pledge. This article analyses which fiscal policies should be adopted and how these policies could form part of a low carbon policy framework in the country. Among our policy-relevant findings is that subnational green fiscal policies are relatively less complex to introduce and encourage uptake of green technologies. Thus, they could be an entry point to a wider green fiscal policy strategy. We also found that fiscal incentives for green innovation projects can present more than proportional impact on the uptake of green technologies owing to positive feedbacks, increasing returns to scale and spill-overs. These are attractive features of green innovations to developing countries in addition to environmental benefits, as they favour the accumulation of indigenous technological capabilities that are critical for long-term technological and economic development. These lessons learned from green fiscal policies in Brazil are applicable to other developing countries.

Is There a Relationship between Foreign Direct Investment, Human Capital, Trade Openness and Economic Growth of Pakistani Economy?

Despite profuse literature on foreign direct investment, human capital and trade openness linkage with economic growth of developed economies, little profound literature is available in case of Pakistan. This paper specifically examines relationship of economic growth with foreign direct investment, human capital and trade openness for Pakistan over the time span 1980-2013. Applications of Johansen Co-integration test indicate the existence of long run relationship between the variables. In addition, VECM also confirms the long run relationship between variables. Also, diagnostic tests show normality and no auto correlation in the model. The CUSUMsq test signifies the specification of the model. The policy makers in Pakistan should employ policies to encourage FDI projects promoting domestic exports. Moreover, an increase in educational, health can result in efficient domestic human capital. The focus must also be on producing finished products in order to promote exports of Pakistan. Steps towards R&D activities should be encouraged to stimulate indigenous technological capability of Pakistan. This would upsurge the local production capability, capacity, promote exports, and improve terms of trade of Pakistan.

Technological Innovation Policy in China: The Lessons, and the Necessary Changes Ahead

China has now moved considerably away from being an imitative latecomer to technology toward to being an innovation-driven economy. The key lessons from China’s experience are that (1) there is synergy between External Knowledge and Indigenous Innovation because the process of learning the tacit knowledge required in using the foreign technology fully is made easier by strong in-house RD (2) the open innovation approach is very important because it allows multiple driving forces – the state, the private sector and MNEs – with each playing a changing role over time; and (3) the commencement of foreign technology transfer and investment in indigenous innovation should go hand in hand. Without the numerous well-funded programs to build up the innovation infrastructure to increase the absorptive capacity of Chinese firms, foreign technology would have remained static technology embedded in imported machines and would not have strengthened indigenous technological capability. However, China could still end up in the middle-income trap, unless it undertakes a series of critical reforms in its innovation regime in order to keep moving up growth trajectories that are increasingly skill-intensive and technology-intensive.

Technological innovation policy in China: the lessons, and the necessary changes ahead

China has now moved considerably away from being an imitative latecomer to technology toward to being an innovation-driven economy. The key lessons from China’s experience are that (1) there is synergy between External Knowledge and Indigenous Innovation because the process of learning the tacit knowledge required in using the foreign technology fully is made easier by strong in-house RD (2) the open innovation approach is very important because it allows multiple driving forces—the state, the private sector and MNEs—with each playing a changing role over time; and (3) the commencement of foreign technology transfer and investment in indigenous innovation should go hand in hand. Without the numerous well-funded programs to build up the innovation infrastructure to increase the absorptive capacity of Chinese firms, foreign technology would have remained static technology embedded in imported machines and would not have strengthened indigenous technological capability. However, China could still end up in the middle-income trap, unless it undertakes a series of critical reforms in its innovation regime in order to keep moving up growth trajectories that are increasingly skill-intensive and technology-intensive.

Measuring Output Multipliers of Energy Consumption and Manufacturing Sectors in Malaysia during the Global Financial Crisis

Abstract The strong relationship between energy consumption and economic growth is widely recognized. Most countries’ energy demand declined during the economic depression known as the Global Financial Crisis (GFC) of 2008–2009. The objective of the current study is to investigate the energy consumption and performance of Malaysia's manufacturing sectors during the GFC. We applied the output multiplier approach, which is based on the input-output model. Two input-output tables of Malaysia covering 2005 and 2010 were used. The results indicate significant changes in the output multipliers of the manufacturing sectors between 2005 and 2010. Moreover, the energy-to-manufacturing sectors’ output multipliers also decreased during the GFC due to a decline in export-oriented industries during the crisis. The increasing importance of the manufacturing sector to the development of Malaysian trade resulted in a noticeable decrease in the consumption of each energy sector's output, especially the electricity and gas sector. Based on the research findings, it is very important to have proper planning in manufacturing sector to reduce high import dependence, shortages of skilled labor, lack of competitiveness and limited indigenous technological capabilities.

A comparative study of technological learning and organizational capability development in complex products systems: Distinctive paths of three latecomers in military aircraft industry

This paper identifies different patterns of latecomers’ technological learning in developing complex products systems (CoPS). The experiences of South Korea, China, and Brazil in military aircraft development are compared to explain the learning process in attaining indigenous technological capability. The military aircraft development programs involving international technology transfer agreements have been documented to investigate the technological learning patterns. We find different technology acquisition modes determined by latecomers’ focus of knowledge-base: technological for “make” and production for “buy”. We also find that these modes may influence the process of learning-by-doing. In addition, we find how the role of foreign partners influences technology acquisition mode. Whereas an active role results in co-production or co-development arrangement, a passive role leads to the vitalization of reverse engineering. We also shed light on the role of government policy initiatives that facilitate technological learning. Lastly, this paper extensively documented the successful technological learning in South Korea’s T-50 and Brazil’s AMX joint venture projects.

Indigenous technological capabilities, emerging market firms and the aerospace industry

While emerging market economies have developed significant technological capabilities and increased their share of global value-added in aerospace, they have done so largely through utilising foreign direct investment (FDI) and offset arrangements to enter supply chains that remain dominated by European and American firms. The paper examines whether emerging markets are developing indigenous technological capability in aerospace technologies. Drawing on patent data from the Thomson Innovation database, the study seeks to understand whether anchor tenant capability is indeed forming in emerging markets. A tech-mining method is applied. The study suggests that China, in particular, has dramatically increased its innovative capacity in the area. However, the data also demonstrate the significant advantages enjoyed by incumbent firms from Europe and the USA, suggesting that the complexity of aircraft R&D remains a formidable barrier that can only be surmounted by determined government policies and anchor firms equipped with substantial innovation capabilities.

The economic study of production and exportation of selected products from Iran

This paper presented an examination of Balassa’s ‘revealed comparative advantage’ (RCA). The results of the research showed that using the RCA should always be attuned in such a way that it becomes symmetric.This paper consisted of three major sections: The theoretical section, the analytical tool and the case studies of comparative advantage’ (CA). First, we evaluated the theory and various empirical measures. Then, the analytical tool was applied for the analysis of exported products. The results indicated that Iran had not had CA in the export of walnuts, almonds,hazelnuts, apples andoranges. To increase competitiveness, we suggested several policy recommendations such as increasing agricultural productivity, promoting the development of indigenous technological capabilities, and reducing the cost of doing business. The conclusion was based on a theoretical discussion of the properties of the measure and on convincing empirical evidences according to the Balassa index. The index for 2007 illustrated that Iran had not possessed a CA in the export of walnuts, almonds, hazelnuts, apples and oranges andconsequently had reduced its market share in these products. Key words: Revealed comparative advantage, iran’s agriculture sector, almonds, apples, hazelnuts, walnuts, oranges.

Governance and technology transfer in the Clean Development Mechanism in India

Despite significant technological advances in emerging economies, the further development of clean energy technologies in developing countries remains crucial to reducing the greenhouse gas emissions associated with economic development. In this paper we address two significant gaps in the growing body of literature that has assessed the role of the Clean Development Mechanism in promoting the transfer of clean technologies to developing countries. First, we present a qualitative analysis of the governance of the Clean Development Mechanism in India. This provides a basis for understanding the extent to which and the ways in which governance may impact upon the likelihood that projects promote technology transfer. Second, we provide a novel quantification of the level and nature of technology transfer that has occurred in Indian Clean Development Mechanism projects, based on insights from literature on technological capability building. We find that the Clean Development Mechanism in India has produced a negligible number of projects that promote technology transfer if technology transfer is understood as a process of learning about technology. Together these qualitative and quantitative analyses show how politics and governance have contributed to the current form of the Clean Development Mechanism market in India, in which processes of building indigenous technological capabilities have been neglected.

Technology Transfers and Knowledge Management in Developing Economies:Case Study of an Indonesian Manufacturer

International technology transfers are crucial for developing economies since they may operate as one of the key drivers in the economies’ development path. Previous studies have acknowleged some channels of technology transfers for developing economies. Nevertheless, the precise mechanisms of how the technology transfers would occur and take effect in each of the recipient economies and their domestic companies are still to be explored. Furthermore, understanding domestic companies knowledge management is important since it would determine the absorptive capacity of the company toward advanced foreign technologies. This study uses a case of technologically intermediate-level Indonesian manufacturer to show evidence of international technology transfers and their impacts on the development of indigenous technological capabilities of the domestic company, as well as to examine the company’s knowledge management. This study confirmed some benefits of international technology transfers for the domestic company, especially through the major mechanisms of technical license assistances, capital goods imports, turnkey projects, technical consultancies, backward-vertical flows of foreign direct investment, and participation in overseas markets. However, the impacts toward the domestic company’s technological capabilities were generally at intermediate level. This implies that the domestic company needs to spend more investments on in-house R&D activities and to improve its knowledge management systems.

University–industry collaboration and innovation in emergent and mature industries in new industrialized countries

As the economies and indigenous technological capabilities of the new industrialized countries improve, national universities and public research organizations are expected to become increasingly important for supporting indigenous firms to move into more dynamic and high-opportunity industries. However, the characteristics of collaboration with universities may be very specific depending on whether the industry partner is engaged in mature or emergent activities. In this study, we explore and discuss the role of university–industry collaboration for the development of innovation in mature and emergent industries in new industrialized countries. Evidence from 24 research groups in science and engineering departments in universities and public research organizations in Brazil provides preliminary empirical corroboration for the proposal that the contexts and role of university–industry collaboration in mature and emergent industries are diverse. Knowledge networks are underdeveloped in emerging industries, and public support for research projects is dispersed. This means that university research and development projects with firms in emergent industries are less likely than projects with firms in mature industries to be the result of academic initiatives and public calls for research projects, or to be wholly financed by major public research sponsors. In emergent industries, the role of students and firm employees is crucial for mediating between public research organizations and companies. The policy implications of these preliminary findings are discussed.