How firms make technological improvements: observations from a field study

Abstract

The paper presents observational data impressionistic accounts emerging from a study aimed at understanding the determinants of technological dynamism, and the role that publicly funded technology institutions play in facilitating product or process innovations in industrial firms. The study covered 23 foundries, 13 polymer units, and 3 technology institutions. Firms were found to obtain new technologies largely through foreign collaborations. They focused their technology efforts on assimilation of technology and adaptation for local conditions or local volumes. Several factors were found to be inhibiting technology development efforts: short term planning horizons of the management; perceived absence of connection between technological sophistication and commercial success; inadequate attention to development of markets to utilize the benefits flowing from technology development; high costs of modernization; and absence of reliable quality inputs and infrastructure which keeps managers mired in routine, survival concerns.