Competitiveness, Technology and Skills

Competitiveness, Technology and Skills

Sanjaya Lall

This book draws together recent contributions by Sanjaya Lall – a leading authority on international investment, technology and industrial policy – on competitiveness and its major determinants. It draws upon his wide experience of competitiveness analysis in Asian and African countries and his recent work on technology and skills. It contains his most important published material as well as previously unpublished articles, and will be of interest to students, researchers and policy analysts interested in industrial development, technology and human resources.

Chapter 6: Multinational Corporations, Technology Development and Export Competitiveness

Sanjaya Lall

Subjects: development studies, development economics, economics and finance, development economics, industrial economics, innovation and technology, technology and ict


INTRODUCTION The global economy is undergoing a series of sweeping changes, driven by rapid technical progress in the industrialized economies. So broad and farreaching are the developments that analysts see the emergence of a new technological ‘paradigm’ (Freeman and Perez, 1988). This new paradigm involves, not only new technologies (in the traditional sense), but also new management techniques, different forms of enterprise linkages, tighter relations between industry and science, and intensification of information flows between economic agents. These technological changes are transforming international economic relations: patterns of trade and comparative advantage, flows of capital, technology and people, generation and ownership of information and property rights. They are accompanied by sweeping changes in economic strategy and institutions. The emerging system is immensely productive. It is also enormously demanding and challenging (World Bank, 1998). It is causing large shifts in the location of productive and innovative activity, patterns of comparative advantage, systems of industrial organization and management, relations between productive and other sectors, and the nature of work itself. In general, ‘technology intensive’ activities, those with rapidly changing technologies and high rates of research and development spending, are growing faster than others (see Figure 6.1, based on NSF, 1998). The list of the world’s most dynamic exports (Annex Table 6A.1) is preponderantly composed of hightechnology and medium-technology products. Competitiveness depends increasingly on the ability to incorporate new technologies and management practices into manufacturing and services, even in traditional activities. Sustained growth, however, calls for a structural change from simple to more...

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