Building a Conceptual Framework as a Benchmark Model

The first two conceptual issues addressed in this research are technological capabilities development in catching-up industries of latecomer countries, and transition within innovative capabilities development. This research integrates these two conceptual dimensions looking to benefit from their complementarities. It then builds a simple framework to be used as a benchmark model, in order to unveil the main characteristics of the pattern of development of the BVI and address the third conceptual issue: new directions/paths as an alternative strategy of latecomers to develop.

As shown in Chapter 2, the common/linear pattern of developing technological capabilities in catching-up industries of latecomer countries is the reverse sequence – e.g. from production to investment to innovation; this is because existing technologies are acquired as the main source of initial technological knowledge, usually from

developed countries (Dahlman et al., 1987).⁸¹ At this time, minimal innovative capabilities are required for the successful absorption of the foreign technology (Pavitt, 1987; Freeman and Soete, 1997). As time passes these industries gradually develop new capabilities for adapting existing and introducing new technologies, inverting the importance of the sources of knowledge. Intermediate and advanced levels of technological capabilities development are mainly based on increasing internal innovative capabilities and on exploiting other new sources of technological knowledge, internal and external, and are increasingly influenced by other internal and external elements, as noted by several authors (e.g. Lall, 1992; Hobday, 1995; Kim, 1997; Bell and Pavitt, 1993, 1995; Ernst et al., 1998a).

As also shown in Chapter 2, recent literature has approached the transition phase from intermediate and advanced levels to competitive levels of innovative capabilities, and has highlighted it as a critical phase in the catching-up process of firms and industries, though not fully explored so far (Dutrénit, 2000, 2007; Hobday et al., 2004). Although not explicit in this body of literature, this could suggest that the level of importance of the sources of knowledge for the development of technological capabilities of catching-up firms/industries changes more dramatically during this transition phase. Initial findings from these few existing studies has started to unveil some challenges, specificities and factors influencing the completion of this transition process in some industries, but there is still a large number of issues to be understood on this subject.

In Sub-section 3.3.1 it was suggested that the Brazilian vaccine industry (BVI) has possibly been developing through a distinct pattern of technological accumulation. This possible different pattern is supposedly the result of persistent high levels of technology acquisition and slow increasing levels of innovative capabilities. Both seem to be greatly conditioned by specificities of the context of this industry and especially constrained by major breakthroughs in the development of new vaccines in the knowledge frontier. In turn the transition phase to a competitive level of innovative capabilities seems to be endless as the technological frontier moves quicker than the ability of the BVI to build up this type of technological capability and catch-up.

81 The nomenclature of the stages of this reverse sequence varies across the wide literature on this subject but the logic remains the same.

The simple framework draws on these two conceptual issues. It is expected to contribute to the understanding of the general and specific circumstances that have characterized, enabled and hindered the development of the BVI, and work as a benchmark tool in the search for similarities and differences that can characterize new directions/paths in the process of its development. It is represented in Figure 3.2 and is explained in more detail in Sub-sections 3.4.2 and 3.4.3. Complementarily, some key terms used in this research are defined as follows:

“Technological capability” is being employed in this thesis in a broad sense, as employed by Kim (1997:4) and others, as the ability to make effective use of technological knowledge. This is in line with the most common and broad sense captured from the vast range of literature on this subject, and encompasses, at the micro level, the efforts, technical or managerial, of a firm/industry to absorb (acquire, assimilate and use), adapt and change existing technologies as well as generate new technologies.

“Technology acquisition” is used here with a specific sense, and refers to the acquisition of foreign “packaged” technologies – the vaccines. The term “packaged” has been employed by some authors (e.g. Mytelka, 1978; Dahlman and Fonseca, 1987; Kim, 1997) with the meaning of technology acquired with full specifications of the production process, frequently accompanied by training, technical assistance and components and parts.

“Innovative capabilities” refers to the ability to generate innovation inside the formal internal innovating units (e.g. R&D, Design and Engineering), as well as to the absorptive capacity in the way employed by Cohen and Levinthal (1990), with the exception of the acquisition of technology in the sense defined above.

The term “catch-up” is normally employed in this research with a general meaning, i.e.

encompassing technological catch-up and market/economic catch-up, as employed in most works. The main concern of this research, however, is with technological catch-up, in the sense employed by Figueiredo (2009).

Source: Own elaboration, based on literature reviewed and on the assumptions raised in this research.

Common Pattern of Technological Capabilities Development in Latecomer Catching-Up Industries

Technological Frontier

Suggested Pattern of Technological Capabilities Development in the Brazilian Vaccine Industry

Technological Frontier

3.4.2 Pattern of Technological Capabilities Development in Catching-up Industries