Sources of Innovation in Developing Economies: Reflections on the Asian Experience

This article is concerned with the remarkable development of technological and economic capabilities by Korean and Taiwanese firms, particularly in electronics, and Indian firms in software and a few other fields. While the cases differ in many aspects, they all involve active learning, in some cases through reverse engineering, requiring a considerable amount to technical and economic sophistication. All of them also involved selling on sophisticated markets which provided both feedback and pressure to learn rapidly and well. The cases teach us a lot about the mechanisms involved in successful technological and economic catch up.