The Acquisition of Industrial Technological Capabilities

Abstract

Previous studies on industrial technological capabilities in developing countries suggest that: (a) differences in the accumulation of technological capabilities by firms explain large differences in export performance among developing countries; and (b) several factors affect capability acquisition in firms (including firm size, ownership and technical manpower).¹ The few studies on industrial technology in Sri Lanka have not fully analysed the technological factors that affect competitiveness since 1977, nor have they tested econometrically the influences affecting capability acquisition.² This chapter analyses the acquisition of technological capabilities in Sri Lankan exporters during the outward-oriented period and conducts an econometric analysis of its determinants. After defining technological capabilities in section 10.2, the capabilities for the garments, electronics and engineering industries are mapped out in section 10.3 and those of individual firms within each industry are ranked by index of technological capability. Section 10.4 presents the econometric analysis of the determinants of capability acquisition using cross-section data from 27 Sri Lankan exporters. Section 10.5 summarizees.