Development of firm-level technological capabilities : the case of the Indonesian electronics industry

This article reports from a broader study of development of technological capability in the Indonesian electronics industry with particular focus on local companies. The article discusses the concept of 'technological capability'. An operationalization of the concept is proposed and a model of capability development at the firm level devised. An empirical survey of the industry was carried out on these bases. The Indonesian electronics industry is conventionally depicted as being 'dual' but this study establishes that not just two but a larger number of qualitatively different industrial segments should be recognized. Capabilities and the ways capabilities are developed are analysed for companies belonging to these different segments. An important finding is that local companies in several respects come out as more technologically capable than usually assumed. (J Asia Pac Econ/DÜI)