External Technological Knowledge Acquisition in Developing Country Firms

This paper analyses how the acquisition of external technological knowledge should improve the innovation capabilities of firms in developing countries, as this is underdeveloped in the innovation management literature. We draw on empirical evidence from past research projects undertaken by UK and Asia-based researchers presenting insights from eight firms (3–5 interviews per firm) that received technologies from inter-firm collaborators based in advanced economies. All eight firms, based across Bangladesh, Sri Lanka and Thailand, acted as receivers of new knowledge via international technology transfer (ITT) agreements. Complemented with theory insights we confirm that receiver firms face challenges around skills gap/ lack of absorptive capacity; lack of training (e.g. with new technologies); language barriers; and lack of on-site installation/ commissioning support from sender firms. We show why it is important that developing country firms require good support, not only from the technology-sending firms but also from government policy measures to help effectively acquire and absorb external knowledge. Hence, senior management needs to more prudently pre-plan ITT agreements and invest in more business skills training for staff to overcome ITT barriers and encourage the development of future innovation capabilities. This is crucial for developing country firms' international competitiveness and growth.