Foreign Firms, Technological Capabilities and Economic Performance

Foreign Firms, Technological Capabilities and Economic Performance

Evidence from Africa, Asia and Latin America

Rajah Rasiah

This book employs novel techniques to compare technological capabilities and economic performance in seven countries at varying stages of industrial development: Brazil, Costa Rica, Indonesia, Kenya, Malaysia, South Africa and Uganda. The author uses a methodology drawn from the technology capability framework, but extensively adapts and simplifies it to extract common cross-industry parameters for statistical analysis. He employs the framework to compare the technological, local sourcing and performance dynamics of foreign and local firms in a variety of industries.

Chapter 8: Intel-driven enterprise linkages in Costa Rica

Rajah Rasiah

Subjects: business and management, international business, development studies, development economics, economics and finance, development economics, innovation and technology, innovation policy


Jorge Monge 8.1 INTRODUCTION The promotion of small and medium enterprises (SMEs) in economies requires a conducive environment: policies, functioning markets and services tailored to their real needs as well as to identifying niches to match their capacities, such as forging dynamic linkages between local and multinational firms. Past works on multinational-rooted linkages include Rasiah (1994, 2002a, 2002b), Ernst and Guerrieri (2001) and Lin and Rasiah (2003). This chapter discusses the role of one of the world’s most famous firms – whom some consider as among developmental and entrepreneurial firms (see Best, 2001; Best and Rasiah, 2003) – in rooting supply synergies in a developing site. This chapter draws on a research conceived jointly with Eric Hershberg. Since paving the way for the PC revolution by marketing the world’s first microprocessor in 1971, Intel has spearheaded a computer revolution that has changed the world. Ninety per cent of personal computers in use today are based on Intel-architecture microprocessors. In addition to the popular Pentium® processor, Intel manufactures networking and communications products as well as semiconductor products used in automobile engines, home appliances and laser printers. Intel has become the world’s largest supplier of microprocessors with 60–75 per cent of the global market and nearly 85 per cent of PCs have an Intel processor, ‘Intel Inside’ (see Mendez, 1999; Ortiz, 1998). Intel’s total income rose from US$16.2 billion in 1995 to US$26.3 billion in 1998. These figures reveal the corporation to be one of the most profitable companies in...

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