From Catching-up to Constructing Indigenous Technological Capability Chains: Complex System Innovation in Developing Country

Based on the intractable issue of building technological capability for many developing countries, there has been extensive research done on technological catching-up process. However, most of those literatures are generally focusing on the investigation based on external features of the technology system. This paper proposes a framework of technological capability chains (TCCs) to link the building up of technological capabilities and industrial upgrading, which explores the internal structure of complex technology system with different innovative technological knowledge parts. We explore how a latecomer enterprise of developing countries catch-up and then build up the indigenous technological capability chains as a strategic asset and deployment of core competence. The empirical focus is the EV (Electric Vehicle) industry, with an emphasis on a typical catching-up country - China. We set our investigation by means of in-depth interviews and a multi-case study on the leading Chinese firms engaged in EV. Our study has revealed a number of factors affecting TCCs construction. Those findings also help develop a conceptual model of technological capability building up for a complex system, which could be a starting point for further research on emerging industries. The findings of this paper are more relevant to large catching-up countries such as India, Brazil, Mexico, and Indonesia where indigenous technological capabilities could serve as an important source of innovation for a large domestic market.