National systems of economic learning: the case of technology diffusion management in East Asia

The success of East Asian firms in high technology industries such as semiconductors and information technology products is now an established fact. Against all the advantages of incumbents these latecomer firms have found ways to insert themselves in worldwide production systems and to compete in advanced markets. But this very success poses a number of challenges for organizational and management theory. According to the conventional view, firms ground their success in R&D and innovation. When the firm wishes to expand abroad, it exports its technology. Yet it is clear that successful firms from East Asia have not built their competencies on conventional foundations through R&D, nor have they been recipients of technologies transferred by advanced firms for reasons to do with product cycles. On the contrary, the East Asian firms and agencies act as instigators of the processes of technology acquisition, acting in accordance with their own strategic impulses. Nevertheless a coherent and plausible account of East Asian success in knowledge intensive industries can be built on the basis of a 'competence' or 'dynamic capabilities' approach, where the focus is not on individual firrns' own competence development, but on the processes of collective competence acquisition, through technology diffusion management, where firms and public agencies utilize various technology leverage devices. The goal of such an account is the construction of a 'mapping' of the processes of diffusion, so that the degrees of leverage involved may be displayed, and the firms' own efforts to 'internalize' the acquired capabilities may be captured. The paper presents a model of technology diffusion management, couched in terms of the strategic goals of the process, the pathways of diffusion, the dynamics of the process, and the institutional vehicles involved. The paper examines the limits to applicability of such an approach to industry creation, and the uptake of technology leverage processes in advanced environments, in conditions of rapid technological change, or 'hypercompetition'. The paper draws on these ideas to develop the notion of a 'national system of economic learning' where the focus is on technology diffusion management, in contrast to the conventional notion of a 'national system of innovation.'.