Why do we need a theory and metrics of technology upgrading?

Figures & data

Table 1: Taxonomies of firm-level upgrading in international (GVC) context.

Authors	Taxonomy/trajectory	Locus of upgrading
Hobday (1995)	Original equipment manufacturing (OEM) Original design manufacturing (ODM) Original brand manufacturing (OBM)	International production networks
Gereffi (1999)	Within - factories, - inter-firm networks, - local or national economies, and - supranational macro-regions	Global value chains
Ernst (2001)	hierarchy of - industries, - factors of production, - consumption, - value chain stages, and - forward and backward linkages	Global production networks (2001, 2006), Global knowledge networks (2008), Global innovation networks (2009)
Humphrey and Schmitz (2004)	Process upgrading Product upgrading Functional upgrading Inter-sectoral upgrading	Global value chains

Table 2: Different perspectives on technology upgrading.

Types/levels	Conceptual framework
Intra-firm level	- Reverse product life cycle: a combination of the product life cycle model in advanced firms by Abernathy and Utterback (1978) and Kim’s (1980) three-stage catch-up model of acquisition – assimilation – implementation - Importance of minor improvements during reverse learning trajectory (Hobday 1995; Hobday, Rush, and Bessant 2004)
Intra-industry and inter-industry level	- Industry life cycle and dominant design (Klepper 1997) - Upgrading towards high value-added industries (value chain upgrading)
Country level	Sequential upgrading of countries based on ‘leading-sector’ (Ozawa 2009) WEF rankings based on differing drivers of growth IUS innovation capacity of countries based on composite indicators of innovation activities

Figure 1: Different patterns of technology upgrading at different income levels.

Note: Based on our discussion in Section 1 we define high income as ‘upper high income’ while middle income refers to ‘broad middle income’ category, which includes lower, upper middle income, and lower high-income groups.

Figure 2: Dimensions of technology upgrading.

Figure 3: Dimensions and components of technology upgrading.

Figure 4: From production capability to technology capability.

Source: Based on and adapted from Amsden and Tschang (2003).

Table 3: Components of structural factors of technology upgrading.

Structural changes which promote technology upgrading	ICT as generic technology: proxy of structural change Knowledge intensive business services (KIBS) Knowledge intensive activities (KIA) Technology diversification
Infrastructural upgrading	An important element or externality of technology upgrading. Inefficiencies in infrastructure can hinder otherwise competitive firms to upgrade Infrastructure upgrading (Ozawa 2009) Human capital
Firms’ structure	Share of large firms Share of SMEs

Table A1: World Bank and our classification of countries based on income per capita, 2014.

	World Bank 2014 classification	Our classification
LOW INCOME	Low income (less than $1045)	–
MIDDLE INCOME	Lower middle income ($1046–$4125)	Lower middle income ($1046–$4125)	‘BROAD’ MIDDLE INCOME
	Upper middle income ($4126–$12,745)	Upper middle income ($4126–$12,745)
HIGH INCOME	High income ($12,746+)	Lower high income ($12,746–$30,000)
		Upper high income ($30,000+)	HIGH INCOME

Table A2: Grouping by GNI per capita 2013_atlas method, selected countries.

Lower middle income (GNI pc atlas method $1046–$4125)	Upper middle income (GNI pc atlas method $4126–$12,745)	Lower high income (GNI pc atlas method $12,176–$30,000)	Upper high income (GNI pc atlas method $30,001–)
Ghana	Albania	Chile	Austria
India	Argentina	Czech Republic	Belgium
Indonesia	Belarus	Estonia	Germany
Moldova	Brazil	Greece	Ireland
Morocco	Bulgaria	Korea	Italy
Philippines	China	Poland	Japan
Ukraine	Hungary	Portugal	Norway
Vietnam	Jordan	Russia	Sweden
	Kazakhstan	Slovenia	UK
	Malaysia	Spain	USA
	Mexico
	Peru
	Romania
	South Africa
	Thailand
	Turkey

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