Technology Acquisition, Catching Up and Competitiveness in Pakistan

The growth trajectories of developed and developing countries are diverging rather than converging as expected from theory. Five policy areas have been identified that are crucial for ensuring development efforts succeed, of which a vital area is in innovation promotion and imitation and accelerated or sustained catching up policies. It is generally agreed that positive progress is required on all the five policy fronts highlighted above, for there to be sustained growth over long time horizons. Against this backdrop, a key concern for developing countries that merits further research in the context of learning by doing and innovation promotion is: what has been the country’s performance with regard to technology acquisition for purposes of enhancing productivity? Has the country been effective in its efforts to acquire the appropriate technology needed to boost productivity levels? Has the country made effective use of the technology acquired? What market failure(s), if any, are constraining the country’s ability to acquire the technology and make appropriate use of it? This research addresses these questions in the light of the experience of Pakistan’s economy, focusing on the development of the domestic automotive industry. The research frames these issues in the context of rent-seeking, political settlements and firm-level efficiency and proposes a framework of analysis that allows for an assessment of technology acquisition efforts at the firm level.