Building Technological Capability in Developing Countries: The Case for a Technology Policy

The paper offers some reflections on technological capability building in the context of low-income developing countries. The issue is of particular concern, especially in an economic climate of liberalisation hostile to direct state intervention, at a time when the less developed countries are struggling to compete. The paper surveys the state of technology policy in three countries of the Indian sub-continent -India, Bangladesh and Nepal in order to draw some lessons. The externalities and market imperfections involved in technology development are so substantial that, if left to market forces without a technology policy, there seems little prospect of the successful building of technological capability by low-income developing countries. This does not necessarily imply direct public production of R&D; given the experience of government failures in implementing efficient resource allocation in developing countries, the specific role of the government requires careful consideration. [DSA, Annual conference 2003: Globalisation and Development]