Economic Development as a Learning Process

Economic Development as a Learning Process

Variation Across Sectoral Systems

Edited by Franco Malerba and Richard R. Nelson

Until recently, economists studying economic development have tended to consider it a universal process, or focussed their attention on common aspects. This book originates from the growing recognition of significant sectoral differences in economic development and examines the catching-up process in five different economic sectors: pharmaceuticals, telecommunications equipment, semiconductors, software, and agro-food industries. Each of these sector studies explore the learning and catch-up processes in various developing countries, in order to identify both the common features, and those which differ significantly across sectors and nations. The authors pay particular attention to China, India, Brazil, Korea and Taiwan.

Chapter 2: Explaining Divergent Stories of Catch-up in the Telecommunication Equipment Industry in Brazil, China, India and Korea

Keun Lee, Sunil Mani and Qing Mu

Subjects: development studies, development economics, economics and finance, development economics, economics of innovation, evolutionary economics, innovation and technology, economics of innovation

Extract

Keun Lee, Sunil Mani and Qing Mu* 2.1 INTRODUCTION The telecommunications industry is one of the fastest-growing industries in the world characterized by significant technological changes. In most countries of the world mobile communication technologies have sought to replace or overshadow fixed line technology. The industry has two segments or parts: manufacturing of telecom equipment and distribution of telecom services. The technological changes have, in essence, completely altered the landscape of this high-tech industry. Given the complexity of its technology and the consequent huge investments that were required, in the past the equipment part of the industry has been dominated by a handful of MNCs based in the developed world. But the arrival of mobile technology has allowed enterprises from the developing world to enter this otherwise oligopolistic industry based in the North. The distribution segment, on the other hand, is nationally owned, very often by a public telephone and telegraph (PTT) provider. But with the embracing of liberalization and deregulation by most countries, the distribution of telecom services has now been privatized and very often thrown open to private sector competition. The natural monopoly status enjoyed by the PTTs has been eroded. In most developing countries one could find only one part of the industry, namely the distribution segment, while the manufacturing segment was largely based in the developed world, with most countries relying on imports of this equipment. However, there are notable exceptions. The four countries, Brazil, China, India and Korea, have sought to build some measures of...

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