Technological Catch Research Articles

The middle-income trap and the middle-technology trap in Latin America–practice comparison based on East Asian perspective

Most Latin American countries entered the ranks of middle-income levels almost simultaneously with Japan and South Korea. However, while Japan and South Korea embarked on the path of economic development through technological innovation and industrial upgrading, Latin America fell into the middle-income trap. By examining the history of industrial and technological development in Brazil, Argentina, and Mexico, three representative countries in Latin America, this paper finds that the fundamental reasons for Latin America falling into the middle-income trap lie in the tension between the choice of industrialization path and primitive accumulation, as well as the institutional deficiencies in technology and industrial development. Latin America, which has fallen into the middle-income trap, finds it hard to upgrade its technology and is trapped in premature industrialization and the middle-technology trap. It can be said that Latin America has fallen into a double trap, which reinforces each other and forms a solid trap pattern. The warning from the Latin American experience is that late-developing countries need to maintain an open attitude during the process of technological catching up, build a complete technological innovation system, enhance industrial and technological governance capabilities, and seize the window of opportunity for technological and industrial upgrading. Otherwise, there is a significant risk of falling into the middle-income trap and even the double trap.

How is Tencent Catching up with Facebook: Empirical Analysis using Patent Citation Data

This paper examines Tencent’s economic performances over time in terms of its technological catch-up and business strategies, with Facebook as a benchmark. Patent and citation data from 2010 to 2019, extracted from the Worldwide Patent Statistical Database (PATSTAT), was used to analyze the technological catching up made by Tencent and Facebook. Results indicate that Tencent has overtaken Facebook in terms of market performances, and that the overtaking in the number of patents preceded that of the market performances, but Tencent has not yet overtaken Facebook in terms of the quality of patents. Tencent has surpassed Facebook in terms of technological independence from external sources and further widened the gap in this aspect over the years. Patterns in the cycle time of the patented technology and citations of non-patent scientific literatures illustrate Tencent’s strategies to seek a niche using recent technologies and avoid issues related to intellectual property rights. Overall, there is some evidence that technological prowess contributes to Tencent’s overtake of Facebook in market performances.

From lagging behind to going beyond: windows of opportunity and latecomers' catch-up strategies

PurposeTo answer the questions: what roles windows of opportunity act in the catchup process of latecomers, what strategies latecomer enterprises should adopt to size windows of opportunity to catch-up with incumbents even going beyond?Design/methodology/approachThis paper studies the catch-up history of the Chinese mobile phone industry and proposes a sectoral innovation system under scenario of technology paradigm shifts. Then a history-friendly simulation model and counterfactual analysis are conducted to learn how different windows of opportunity and catch-up strategies influence the catch-up performance of latecomers.FindingsResults show latecomers can catch up with technology ability by utilizing technology window and path-creating strategy. However, catching up with the market is not guaranteed. Demand window can help latecomers to catch up with market as it increases their survival rates, different sized windows benefit different strategies. However, it also enlarges incumbents' scale effect. Without technology window technology catch up is not guaranteed. Two windows have combination effects. Demand window affects the “degree” of change in survival rates, while the technology window affects the “speed” of change. Demand window provides security; technology window provides the possibility of a breakthrough for technology ability.Practical implicationsThe findings of this paper provide theoretical guidance for latecomer enterprises to choose appropriate catch-up strategies to seize different opportunity windows.Originality/valueThis paper emphasizes the abrupt change of industrial innovation system caused by technology paradigm shifts, which makes up for the shortcomings of previous researches on industrial innovation system which either studied the influence of static factors or based on the influence of continuous changes.

Editorial Innovation and Engineering Management in Emerging Economies

Over the past two decades, the development of emerging economies as drivers of global economic growth has been one of the most fundamental trends. Emerging economies account for more of the world's exports, including technology exports, while emerging country firms have heightened their profile in the global innovation landscape [1], [2], [3], [4]. Such changes required the building of substantial technological and engineering capabilities, but this is not the entire picture. To move up from basic to advanced innovation capabilities, firms in emerging economies have undergone a process of change and improvement in their managerial skills, by means of developing and adopting best practices of innovation and engineering management. Managerial skills are an enabling factor for dealing with systemic innovation processes and complex engineering projects. Nevertheless, while there has been substantial research on technological catching up in emerging economies, concern with how they are facing the challenges of adoption of innovation and engineering management practices have received little attention. The purpose of this Special Issue is to report on the state of the art of, and emerging trends in, research and practice of innovation and engineering management in emerging economies.

Coexistence paradigm of the technological catching up process

Established studies on catching up have mainly overlooked a comprehensive understanding of the process. We examine the Chinese auto parts manufacturing industry’s technological catch-up to derive conclusions about the development paradigm. We address this conundrum by employing a process-based case study to extend the theory of technological catching up. This leads us to call this alternative paradigm coexistence. Coexistence encompasses various interactions between new and old generations in the process of catching up. In our findings, we propose three coexistence scenarios, namely: convergent, asymptotic, and intersectional.

The intellectual evolution of the technological catch-up literature: Bibliometric analysis

• The literature on technological catch up shows convergence in topics but not convergence in intellectual attributions. • We identified three stages in the literature: a convergence between the economic growth and technology capabilities literature (1980/the 1990s). • A shift from the macro issues of growth and convergence to (latecomer) firm and sectoral level issues (2000s). • Concern over the relationship between globalization and technology upgrading at the or mezzo level (2010s). • Richard Nelson is central in the authors' co-citation network, whose work bridges four different approaches in technological catch-up studies. Abstract 1 We analyse the growing literature on technological catch-up since the 1980s to identify its intellectual bases and evolution. The analysis uses co-occurrence and co-citation techniques to explore trends in keywords, journals, documents, and authors. In the 1980s, the area was characterised by two unrelated streams of work on macroeconomic growth and the building of technological capabilities at the micro-level in developing economies. During the 1990s, when the technological catch-up literature began to take off, these two streams of literature evolved further and came closer to each other. During the 2000s, firm-level studies rooted in resource-based and knowledge-based views proliferated. From 2010 they were followed by an increased number of studies of latecomer firm internationalisation. The field's qualitative evolution has been characterised by the convergence between the economic growth and technology capabilities literature, a change of focus from the macro issues of growth and convergence to firm (latecomer firm) and sectoral level issues, and a dominant concern about the relationship between globalisation and technology upgrading at the sectoral or mezzo level. There are four streams that currently underpin research on technology catch up: economic growth, systems of innovation, knowledge management, and industrial dynamics cum global value chains and latecomer firm.

Techno-economic transformation in Eastern Europe and the former Soviet Union – A neo-Schumpeterian perspective

This essay is an interpretative survey that explores the post-socialist transformation in Eastern Europe and the former Soviet Union (EE&fSU) from a neo-Schumpeterian perspective. It argues that we cannot understand the challenges of technological upgrading of the post-socialist region if we only adopt the lens of what can be termed transition economics. Instead, the post-socialist transformation is an open-ended process whose outcomes can be better understood as a disequilibriating evolutionary process involving the misalignment of different levels and parts of innovation systems. We develop a multi-level analytical framework and outline several major transformation processes involving dynamic interactive capabilities as the core precondition for technology catching up. Technology accumulation and innovation systems are hybrid systems whose dynamism rests on various governing principles. The swing from one pure mode of coordination (plan) to other (market) explains limited technological upgrading in both periods. Dynamic innovation systems are quintessentially hybrid systems. Crucial to this is an understanding of the role which the state plays, both as a contributor and as an obstacle to the transformation towards sustainable economic growth.

Analyzing the Impact of Subsidies on Beef Production Efficiency in Selected European Union Countries. A Stochastic Metafrontier Approach

The European Union Common Agricultural Policy reforms since the early 2000s allowed for the implementation of different types of agricultural subsidies, such as direct support in the form of decoupled and coupled payments, or agri‐environmental payments. As a result, there are significant differences in agricultural subsidies granted in each member state of the European Union. However, there is limited cross‐country comparative empirical evidence regarding the effects of the implementation of different levels and types of subsidies on farm efficiency. Using farm level data for beef farms in Ireland, France, Great Britain, and Germany between 2005 and 2012, we implement the stochastic metafrontier proposed by Huang et al. (2014) and attempt to correct for endogeneity applying the method in Shee and Stefanou (2015). Using these approaches, we contribute to the literature by consistently comparing cross‐country farm performance, as well as exploring the disaggregated effects of different types of subsidies on farm level technical efficiency and on the technology gaps. Our estimates show that although beef farms included operate on average close to the global frontier, there is scope to improve farm level managerial performance. However, they do operate close to the global frontier, although not on it. We also find evidence that implementing full decoupling benefited efficiency, whereas implementing partial decoupling might have hindered technical efficiency improvements for beef farms, as well as technology catch up.

Development of patent database in Thailand for assessing local firms’ technological capabilities

This paper presents the methodology of an analytical patent database in Thailand from the Thai patent authority, Department of Intellectual Property, and provides descriptive statistics showing the technological catching up of Thai local applicants to multinational corporations investing in Thailand. The share of domestic patent applicants has increased over time, which suggests the improvement of the technological capability of Thai local applicants. However, the upward trend of patenting is explained by an increasing patenting from Thai nonprofit research organizations, including (national) universities. The share of joint R&D patents by Thai local firms and academia (research organizations and universities) and the share of local invention patents by multinationals have increased recently. Hence, spending on research organization by both the public R&D and the local R&D by multinationals could contribute to the technological upgrading of Thai local firms.

Bluetooth Based Indoor Navigation System

The navigation system has been around for many years in terms of map and simple navigation control, and only recently has technology caught up in the idea of the interconnected world, allowing full assist of navigating from one point to another becomes reality. Recently, the architecture of the shopping stores is getting more and more complex and it is hard for the consumers to find their desired store. As the satellite signal cannot be used inside the building, hence, in this project, we propose an indoor navigation system by using the Bluetooth low energy (BLE) signal. The BLE signal is emitted from every BLE beacon in the building and the receiver which is the smartphone will determine which of the beacon is the closest to the receiver and determine the user location. This technique is called fingerprint which is usually used for BLE beacon. The verification tests have been performed in UTHM where the lecture hall complex was used for the test. The results show that the proposed system is able to navigate to the destination accurately.

Catching Up in the Face of Technological Discontinuity: Exploring the Role of Demand Structure and Technological Regimes in the Transition from 2G to 3G in China

During technological discontinuity based on the transition from second-generation (2G) to third-generation (3G) mobile telecommunications, Chinese manufacturing firms were catching up with leaders in the global industry. Using computer simulation, the paper examines the extent to which heterogeneous demand structures and competitive regimes affect technological catching up. The paper shows that - during technological discontinuity - a slightly higher technological opportunity in combination with low appropriability and heterogeneous demand are vital for technological catching up. The complementary effects of demand within different regimes of Schumpeterian Mark I and Mark II models are discussed.

Buying to Develop: The Experience of Brazil and China in Using Public Procurement to Drive Innovation

This paper sets out to understand the use of public procurement as a policy instrument for catching up. Brazil and China, who have explicitly linked procurement to innovation, are used as empirical cases. We review their respective institutional settings, policy approaches, and micro-level processes related to the public procurement of innovation (PPI). We have discovered that they share similarities concerning issues encountered during PPI implementation. Although both countries have made some achievements in promoting innovation through procurement, this paper highlights some of the obstacles they have experienced when implementing this policy, such as institutional problems, changes in the political landscape, and macroeconomic constraints. Such obstacles, more prominent in the case of Brazil, may have acted as an obstruction to achieving the pursued objectives, thereby restricting the full potential of PPI in driving technological catching up. The article then offers managerial and policy implications for the implementation of PPI, such as the importance of choosing relevant procurement procedures, critical roles played by policy champions, and demonstrating effects of leading firms and regions. While in China PPI was once an instrumental part of its technology development agenda, in Brazil it has been sporadic and unconnected to a given national strategy.

Embeddedness and local patterns of innovation: evidence from Chinese prefectural cities

The diffusion of innovative activities has been very fast in China since the mid-1990s. The literature nonetheless suggests that internationally-relevant innovation may have delayed gaining embeddedness in some places, depending on the strategy it was “seeded”. This paper posits that different degrees of embeddedness are linked with different local patterns of innovation and investigates these linkages across Chinese prefectural cities. Four research hypotheses are stated, one for each indicator identified in the literature to investigate technological catching up. The empirical exercise is set as an ordered logistic regression of data rearranged from the OECD Patent Databases for the period 1981–2009. The results show that embeddedness is positively linked with innovation that increasingly relies on its own local past and negatively linked with innovative activities more concentrated across patent owners. The evidence of a nexus with originality and technology cycle time is less clear and requires appropriate investigation in future research. At the state of the art, the main hint is that embeddedness is gained where the knowledge paths increase in complexity.

Technological catching up and innovation policies in China: What is behind this largely successful story?

Technological progress is critical for achieving sustainable growth and thus an important issue to study. China has recently emerged as a key power of innovation with both increasing investment in research and clear improvements in research output. The main questions behind these facts are how this country makes such achievements in a short period of time and whether they are sustainable in the future. This paper proposes a new theoretical framework to explain the phenomenally accelerated technological catching-up process of China. Specifically, we set up an inverted S-curve model based on the existing theories. The empirical analyses herein provide clear evidence supporting the proposed theoretical framework. At the aggregate level, an empirical model is developed for the purpose of identifying the main driving forces of the technological progress of China. Based on the theoretical framework and the existing literature, a seven-variable model is used to investigate the contribution of key factors to the innovation outcome of China. At the micro-level, case studies on China General Nuclear (CGN), a leading state-owned nuclear energy company, as well as Huawei, a prominent Chinese private company in the telecommunications industry, provide further insights into what firm-level strategies, in combination with or leveraging state-level policies, enable successful stories in practice.

Multi-level drivers of catching up in complex product systems: an Iranian gas turbine producer

PurposeThis paper aims to investigate the pattern of technological capability building in the gas turbine industry as a complex product system (CoPS) in an Iranian gas turbine producer named Oil Turbo Compressor Company (OTC) and to recognize multi-level (firm, industry and national) drivers influencing technological catching up in this company.Design/methodology/approachThis paper used a qualitative approach and case study research strategy. A preliminary theoretical framework is proposed based on research background. Also, the data were collected from various sources, including the interview with 11 experts, studying many documents and participating in some relevant meetings and conventions. To analyze the data, the authors relied on their preliminary theoretical framework and applied the chronological sequence analysis technique.FindingsOur findings show that, first, in contrast with mass-produced industries where capability building pattern often leads to product innovation, technological capabilities in OTC have evolved from assembling to manufacturing, upgrading and finally redesigning of existing models of gas turbines. Second, two firm-level (proper technology acquisition strategies and building organizational and managerial capabilities), two industry-level (networking, integration and collaboration among key actors and existence of local market and demand) and two national-level (government’s policies, supports and initiatives and institutional arrangement and political conditions) drivers have played indispensable roles in facilitating and accelerating technological catching up by OTC.Research limitations/implicationsInevitably, the current research faces a few limitations. For instance, the difficulty of generalization is considered an inherent problem because it is a case study of only one Iranian latecomer company, as well as only one CoPS industry. Regarding implications, the findings suggest that technological catching up in CoPS industries in developing countries is not a simple and autonomous process and is influenced by multi-level factors, including national-, industry- and firm-level drivers.Originality/valueIn terms of theory, this paper tends to investigate and explain the catching-up process in OTC as an Iranian gas turbine producer by applying a multi-level theoretical framework that consists of firm-, industry- and national-level drivers. In terms of practice, this paper aims at investigating drivers affecting the catching-up process in a CoPS industry in a developing country that was faced with vast international sanctions, while many other studies in this area examined cases from developing countries such as Korea and China that had the opportunity of enjoying international collaborations and overseas knowledge flows.

Relationship between knowledge-based risk and risk identification

Background: Knowledge-based risk processes are turning into a major aspect inside establishments because they can limit the likelihood and effect of information technology (IT) project threats and catch opportunities amid the life cycle of an IT project. Objectives: The objective of the article is to propose a model that describes the amalgamation of knowledge-based risk processes (knowledge-based risk capture and knowledge-based risk discovery) and knowledge-based risk repositories to support risk identification. Method: This article adopts a quantitative research approach using surveys, with questionnaires composed from 135 employees in 10 IT companies in Jordan. The researchers employed smart partial least squares analysis to examine all of the hypotheses. Results: The results propose that the adoption of knowledge-based risk capture and knowledge-based risk discovery has a positive impact on risk identification, which is mediated by knowledge-based risk repositories. Conclusion: Knowledge-based risk processes and knowledge-based risk repositories are generally utilised as a part of IT projects to effectively and successfully support risk identification.

Coming Out Clean: Australian Carbon Pricing and Clean Technology Adoption

Australia implemented a carbon pricing scheme from July 2012 to July 2014 to reduce emissions. Using data envelopment analysis, I investigate whether the uptake of clean technology accelerated during this period. I also explore a few other related strategies firms used to reduce emissions. I find that during the scheme firms accelerated the adoption of cleaner technology. Much of this acceleration came from firms lagging in technology catching up with the frontier. Reallocation of operation towards cleaner facilities and opting for more efficient scale sizes also helped the pace of emissions reduction. The pattern shows some variation from industry to industry. All these activities subside as soon as the carbon pricing is repealed.

Structural modernisation and development traps. An empirical approach

In this paper we analyse economic development through the lenses of a newly developed index: the structural modernization index. This index combines two dimensions that have been widely invoked as prime drivers of economic development namely, structural change and technological catch up. For each country, the index calculates the productivity gap with respect to the world frontier in activities that typically represent the modern part of the economy, and weighs this relative productivity by the employment share of those activities in the total labour force. In doing so, it combines a technological dimension (relative productivity) and a structural dimension (the size of the modern sector) thus providing a concise measure of the degree of modernity of an economy. The index is calculated for a large sample of countries over a long time span. Significant efforts have been made to put together a dataset with international comparable data on value added and employment disaggregated by sectors for 100 countries covering the period 1950-2009. The estimates are used to explore the relationship between structural modernization and the so-called poverty and middle-income traps. In analysing this relationship, the interactive nature of structural change and technological catch up is stressed. Important insights are obtained regarding the nature of low and middle-income development traps. Finally, the usefulness of this new index is illustrated when studying the diverse structural trajectories of a set of countries that can be taken as examples of success and failure in the process of economic development.

The industrial dynamics of water innovation: A comparison between China and Europe

The expansion of the green economy agenda has increased the attention on eco-innovations globally, with issues related to water stress identified as one of the major bottlenecks for sustainable economic growth. Using evolutionary economic theory, this study investigates the industrial dynamics of the water sector, comparing China and Europe using patent data. This comparison feeds into the “catching up” literature, addressing the challenges of the “green economy” agenda in different regions in various stages of development. We highlight the neglected micro-dynamics of water innovation, investigating the roles of different innovators in the development of water technological trajectories, with a special focus on water innovations closely related to climate change adaptation and mitigation technologies. Public water innovators (universities) were found to be more important in China than in Europe. Similarities were also identified between Europe and China; big companies were found to be the main innovative leaders with no substantial changes documented over the timeframe investigated. Overall, the finding implies a rapid Chinese technological catching up of water technologies in the last three decades, where our research has pointed towards the role of redirection of Chinese policies with a stronger focus on sustainable development. The analysis, overall, sheds light on the state and nature of the globalizing green growth agenda.

A conical-helix model of technology transfer and public-private partnerships for technological development in Brazilian public health

Technological development is a longstanding matter of concern in the comprehension of economic growth and wealth. However, a deeper understanding regarding the process of technological catching-up and development of emerging economies is yet to be further gathered. Thus, the aim of this article is to comprehend the path for developing frontier indigenous technologies through technology and knowledge transfer (TKT) and public-private partnerships (PPP). Based on a case-study of technological development in the field of molecular diagnostics in southern Brazil, this article provides a three-stage conical-helix model of technological catching up and development through TKT and PPPs. In the start-up stage, public research actors generate technological capabilities via TKT processes at the local level; in the catching-up stage, frontier technologies are gathered through a new TKT from international actors; in the rising-up stage, frontier technology is developed indigenously and transferred to national and international private industries through PPPs. Therefore, the conical-helix model presented in this study may potentially contribute to the development and implementation of a new generation of public policies for technological development in emerging economies, reducing technological dependence on imported technologies from developed nations.