Technology Strategies for Global Competitiveness

The following has been taken from "Technology Strategies for Global Competitiveness:
Next Practices from India’s Leading Companies" , Rishikesha T. Krishnan, Professor of Corporate Strategy & Policy, Indian Institute of Management Bangalore.The reason for including this article as the first post on the blog is that this article lays the necessary groundwork, for the issues that we would be talking about in detail during the subsequent posts. Moreover the model discussed here has been seen to be increasingly relevant in not just the technology industry but across various industries as divergent as autos, media, sports and other.
The article is as follows:--

 An important driver, perhaps even the most important, of the economic development of
nations is the acquisition of technological capabilities. Modern industry is driven by
technology, and lack of access to technology can stunt economic growth. In all the cases
of rapid economic growth observed in the late twentieth century – Korea, Taiwan, and
Singapore - technology played an important role.
Acquisition of technological capabilities can be understood as a learning process. To
start with, firms need a production capability – the ability to run a plant that produces a
particular product. The process of acquiring a production capability is initiated by
importing a plant from another country or having a new plant built by an engineering
contractor to the specifications provided by a technology provider. Through training and
“learning by doing”, the firm learns how to operate the plant, and gradually improve the
yield from it. In the second stage, firms develop an investment capability – the ability to
create a new plant of a chosen capacity and specifications. Finally, firms develop an
innovation capability – the ability to create new products, and the manufacturing
infrastructure to produce these products. These three stages can be viewed as
understanding the “know-how”, “know-why” and “create new” of the particular product
category.

This simple framework has been expanded to a 5-stage model that further elaborates the
steps . The first stage is to “learn to produce”. But production by itself is
not enough. To be competitive the manufacturer needs to be able to produce efficiently,
at least on par with others operating similar plants. The second stage is therefore “learn to
produce efficiently” – this stage involves subtle, tacit knowledge, learnt essentially by
doing, that may not have been part of the technology transfer agreement covering the
initial acquisition of technology. In the third stage, firms move away from following the
process as originally prescribed – they make their own changes to the plant design and
processes, i.e., they “learn to improve production.” This stage could include de-bottlenecking, process improvements and process re-engineering. Once the process skills
are mastered to a degree, attention is shifted to the products being manufactured. Stage 4
is to “learn to improve products” through incremental modifications often through value
engineering, material changes, and product enhancements. Finally, firms “learn to design
new products”, i.e. they develop the capability to innovate.
These stage models describe quite well the process by which firms in developing
countries in industries as diverse as steel, fertilizers, electrical equipments, and
petrochemicals have developed the technological capabilities to compete in domestic and
global markets.