Larry E. Westphal

Industrial strategy and technological change: Theory versus reality☆

Abstract What are the determinants of appropriate industrial strategy under different circumstances? There is no universally accepted answer. This paper deals with two new elements in the contemporary debate, which centers around the efficacy of the neoclassically-prescribed neutral policy regime. One element is research demonstrating that market forces alone are not responsible for the purported ‘market successes’ of the East Asian NICs. With Korea as the case in point, this research is reviewed to draw some lessons about successful industrial strategy. The other element is an evolving conceptualization that puts technological change at the heart of industrialization. The underlying firm-level case-study research is surveyed and implications are derived regarding the nature as well as the extent of market failures affecting industrialization. It is argued throughout that industrial strategy should be seen as a matter of managing technological change to achieve dynamically efficient industrialization.

Managing technological development : lessons from the newly industrializing countries

This survey looks at the technological development of the newly industrializing countries to draw some important lessons for firms and governments in other developing countries. First, inventing products and processes is not at the center of the technological development needed for successful industrialization. It is at the fringe. What is at the center is acquiring the capabilities needed for efficient production and investment. Second, some countries have overemphasized the drive for technological self-sufficiency and paid a high price in poor productivity. What makes the best economic sense is to combine foreign and local technological elements--and to do this in a way that progressively develops local capabilities in areas where they can be more efficient. Third, the acquisition of technological capability does not come merely from experience, though experience is important. Fourth, the economic environment, through its influence on the technological efforts of firms, is very important in determining the productivity of a countrys resources.

Technology Strategies For Economic Development In A Fast Changing Global Economy

East Asian development experience provides the basis for understanding which are the essential elements of effective technology strategy and policy, those that are required for the efficacious development of countries that have not yet embarked on a path of sustained modernization. Globalization has had a profound impact on development, enabling countries that could exploit its propelling forces to pursue a potent strategy of export-led economic and technological development. The policies needed to sustain this strategy are those required to foster institutions that permit effective commerce among economic agents, those necessary to generate the rapid accumulation of human and physical capital, and those essential to ensure that resources are allocated in accord with the economys dynamic comparative advantage. Of crucial importance among the latter are effectively implemented policies of selective intervention designed to develop infant industries and to foster their fast-paced achievement of international competitiveness through rapid attainment of the requisite technological capabilities.

The Meaning of Technological Mastery in Relation to Transfer of Technology

The acquisition of technological mastery—that is, of the ability to make effective use of technological knowledge—is critical to the achievement of self-sustaining development. Transfers of technology are substitutes for local mastery rather than sources of it. Consequently, the part played by transfers of technology in the process of development, while important, is nonetheless limited. This article considers the role of technology transfer with specific reference to industrial technology, and places it in the broader context of the relationship between the acquisition of technological mastery and the development of an efficiently functioning economy. Based on a review of what is known about technical change in industrial enterprises in less-developed economies and on a case study of one economys experience, it demonstrates that indigenous effort to assimilate technological knowledge is of overriding importance in the achievement of technological mastery. Various types of technological mastery are distinguished together with the different categories of effort associated with their acquisition. The consequences of increased mastery are also discussed, together with the factors that determine when it is appropriate to rely on transfers. Finally, the authors suggest that further research is needed to determine how technological mastery ought to evolve in relation to industrial development.