United Nations Conference on Trade and Development INVESTMENT AND TECHNOLOGY POLICIES FOR COMPETITIVENESS: Review of successful country experiences

ii NOTE The UNCTAD, Division on Investment, Technology and Enterprise Development is the focal point within the United Nations Secretariat for all matters related to foreign direct investment, transnational corporations, enterprise development, and science and technology for development. The current work programme of the Division is based on the mandates set at UNCTAD X, held in Bangkok in 2000, as well as on the decisions by the United Nations Commission on Science and Technology for Development, which is serviced by the UNCTAD secretariat. In its work in the area of science and technology, the Division aims at furthering the understanding of the relationship between science, technology and development; contributing to the elucidation of global issues raised by advances in science and technology; promoting international cooperation on science and technology among Governments, enterprises and academia, particularly between those of developed and developing countries and transitional economies; promoting technological capacity-building; and enhancing entrepreneurship and competitiveness in developing countries, particularly the least developed among them. This series of publications seeks to contribute to exploring current science and technology issues, with particular emphasis on their impact on developing countries. The term "country" as used in this study also refers, as appropriate, to territories or areas. The designations employed and the presentation of the material do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. In addition, the designations of country groups are intended solely for statistical or analytical convenience and do not necessarily express a judgement about the stage of development reached by a particular country or area in the development process. iii PREFACE This paper discusses the role of foreign direct investment in transferring technology, building technological capabilities and enhancing competitiveness. It highlights the important role that foreign direct investment can play in the transfer of technology, but also emphasizes that the latter should be maximized and complemented by appropriate country policies. The paper examines competitiveness in its contextual setting of globalization, growing integration and rapid technical change, before developing an analytical framework with which to consider technology and capacity building. On the basis of its evaluation of the case studies of SouthEast Asian countries, the paper considers the strategies used successfully to build domestic capabilities, providing a broad set …