Creating capabilities in local environments and production networks

Abstract

In the new international setting, which is characterized by new technologies that make intensive use of information, globalization of markets, and the increased competitive pressures and uncertainty facing the agents, competitiveness is a systemic phenomenon. The endogenous capabilities of the agents, the degree of development of the environment they operate in and their integration in a production network have become key elements for developing capabilities and creating competitive advantages. It is being asserted more and more frequently that the competitive advantages of countries, regions and agents do not necessarily derive from their factor endowments but can be constructed through the development of endogenous capabilities and linkages with other agents. In the transition from static to dynamic advantages, the capacity to learn -conceived as an interactive process imbuing the whole of society- plays a key role. The present article analyses what the endogenous mechanisms for the creation of capabilities and the conversion of generic knowledge into specific know-how are, and what they depend on, at the level of the individual agents, production networks and the various local environments. Reference is made to the importance attached by economic theory in recent years to the relation between technology and learning processes, especially in the Schumpeterian and evolutionary approaches. The way in which the economic agents learn, transform generic knowledge into specific know-how and link up codified and tacit forms of knowledge is addressed, and finally it is emphasized that these processes are not the result of the natural linear development of production systems but are the consequence of a long evolutionary learning process.