Technological Upgradation through Global Value Chains: Challenges before BIMSTEC Nations

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Enhancing productivity through technological upgradation is one of the key drivers of high economic growth. Developing countries have relied on imported technology, licensed knowhow and foreign direct investment (FDI) for firm-level technological diffusion and spillover. However, with international production systems being integrated into ‘global’ networks, access to advanced technology for developing country enterprises has become critically dependent on their abilities to enter and move up global value chains. This paper attempts to study such possibilities for firms in some BIMSTEC nations in the context of global production networks dominated by Japanese lead firms. The paper examines extant national technological capabilities, in terms of efficiencies in applying advanced technologies to commercial applications, as well as innovative capacities for tackling more advanced operations. The findings indicate India as the leading BIMSTEC nation having capabilities for taking on diverse ‘high-end’ activities, with other nations requiring considerable technological ‘catching-up’.