Building Technological Capabilities in Latecomer Firms: A Review Essay

Abstract

The literature on the building up of technological capabilities in industrial latecomer firms has focused on analysing the gradual building of a minimum base of technological knowledge to be able to carry out innovative activities. The literature on strategic management focuses on maintaining, nurturing and renewing core capabilities/competencies by the most innovative firms. This paper argues that there is no simple linear progression from the early stage of accumulation of the minimum levels of innovative capability to the management of knowledge as a strategic asset and the deployment of core capabilities. On the contrary, the transition process is complex and while firms make that transition, they have to build deeper and broader stocks of knowledge and develop new types of knowledge management. This paper reviews those bodies of literature, discusses the lack of attention to the characteristics, problems and strategies of the building up of technological capabilities of large firms that compete close to, but still below, the technological frontier, particularly in the Latin American context, and proposes an analytical framework to analyse firms at this stage of accumulation.