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This paper presents a case of technological learning and commercial application using an advanced technology by a developing country. Despite major obstacles, it is possible to find certain technological niches where developing countries might succeed. One interesting example is the Brazilian experience applying photonics technology to develop cutting-edge medical devices products and bringing them to market. Empirical evidence is collected from a specific branch of companies using photonics technologies. These companies are predominantly composed by university spin-offs, created through interaction between scientists and managers, backed by public institutional support and personal capital. The results showed that focus on a niche market and product development strategy have enhanced the process of technological capability.
The technology learning challenge
One of the great concerns for firms and policymakers in developing countries has been how to catch-up in technology, and how to become relevant technology producers. Some countries outside the developed world such as Taiwan and South Korea have achieved these goals. Meanwhile, we see the rise of China and India as outsourcing centers for advanced R&D activities.
It is known that technological progress can explain both sustained growth and rising living standards over time. In the past, the transfer of technology, or as stated, by Rath (1994), when an existing technique of production is moved from one location to another, the called horizontal mechanism, have helped late industrialized countries to overcome many of their industrial backwardness.
In spite of the importance of horizontal sources, there will be times that the technology will not be easily available for transfer. China, for example, has suffered several import control of dual-use technologies and goods. The restriction can occur directly, for instance, when the US Commerce Department's Bureau of Industry and Security restricts American manufacturers to sell to them (Overton, 2008). Alternatively, the sanctions can also be indirectly, upon firms in other countries. Brazilian companies working on the Sino-Brazilian Earth Resource Satellite project are not allowed to import components considered restrict anymore (Angelo and Garcia, 2007).
What can firms in developing countries do to overcome such obstacles and keep their operations running? What are the implications for management? In order to answer these questions we have studied a sample of Brazilian companies applying photonics technologies to develop new products. We...