Management and Innovations

Abstract

Until recently, it was generally believed that the acquisition of technological capability through technology transfer is essential to industrial development in developing countries, as manifested by such well-known works as Pack and Westphal (1986), Lall (1992), and the immense literature on technology spillovers from multinational firms to local firms (e.g., Aitken and Harrison, 1999). These studies, however, seldom highlighted managerial capability although it was not completely neglected. Yet, increasingly the emphasis has been shifting from technology to management. For example, in their often-cited paper, Brunn et al. (2010) argue that the capital missing in developing countries is managerial capital, whereas they mention technological progress and innovation only once in the paper. A balanced view on managerial and technological capabilities is missing in this literature.

This chapter draws on Sonobe et al. (2014).