Technovation 28 (2008) 327–334 Technological capability development in China’s mobile phone industry Jun Jin a,à , Maximilian von Zedtwitz b a Research Centre for Science, Technology, and Education Policy, Zhejiang University, Zheda Road 38, 310027 Hangzhou, China b Department of Innovation and Entrepreneurship, Research Center for Technological Innovation, School of Economics and Management, Tsinghua University, 100084 Beijing, PR China Abstract The development of technological capability (TC) is critical for manufacturing firms in high-tech industries. Kim’s [1980. Stages of development of industrial technology in a developing country: a model. Research Policy 9, 254–277] model of acquisition, assimilation, and improvement is widely accepted to explain TC development in developing economies. However, some R&D practices we observed in Chinese manufacturing companies appear to be in disagreement with Kim’s model. Based on four in-depth cases studies set in China’s mobile phone industry, we hypothesize (a) a complementary stage in Kim’s model, and (b) those stages can be traversed concurrently. r 2007 Elsevier Ltd. All rights reserved. Keywords: Technological capability; Kim’s model; Mobile phone industry; Four-stage model; R&D; Innovation 1. Introduction Technological capability (TC) plays a strategic role in the competitive advantage of firms, industries, and even countries (Lall, 1990). For this reason, it has become a focus of attention not only among academics, but also among business managers and government officials, particularly in developing economies (Lall, 1990; Miyazaki, 1995; Kim, 1997). There is extensive research on the development of TC in newly industrialized economies (NIEs) and emerging NIEs (e.g., Malaysia and Thailand) (see e.g., Lall, 1990; Kim, 1997), most of which focusing on heavy and chemical technology (HCT) industries or labor- intensive industries (see e.g., Lee et al., 1988; Kumar et al., 1999; Lee, 2001). Very little research has been done in this respect on information and communication technologies (ICT), even though they are crucial in the development of companies and national economies. It has been frequently argued that the development of ICT allows technology leapfrogging in developing countries (e.g., Perez, 1988; Lee and Lim, 2001). As we will see later, ICT are not just being imported in their mature stage without adaptation or modification, and hence this import does not seem to follow Kim’s (1980) model whereby it is supposed to progress from the acquisition and assimilation of mature technologies before moving to the improvement of growing or emerging technologies. Specifi- cally, Kim’s model stipulates separate stages and a linear transition through these stages, which is in disagreement with empirical observation in China as well as research on domestic technological capabilities (e.g., Gao, 2003). Can we modify Kim’s TC model to fit TC development in fast emerging economies? Since previous research on this topic is limited and available observations still rather unstructured, we decided to elaborate this research question first with in-depth cases study research to develop a sharper understanding of the potential divergence of empirical practice from Kim’s model. The goal of our paper is thus to develop a working model for further research on the basis of well-founded observations. ARTICLE IN PRESS www.elsevier.com/locate/technovation 0166-4972/$ - see front matter r 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.technovation.2007.06.003 Abbreviation: CDMA, Code Division Multiple Access; GPRS, General Packet Radio Service; GSM, Global System for Mobile Communication; TACS, Total Access Communication System; TD-SCDMA, Time Division-Synchronous Code Division Multiple Access; WCDMA, Wide- band Code Division Multiple Access à Corresponding author. Tel.: +86 571 87 95 38 80; fax: +86 571 87 95 15 99. E-mail addresses: hzj.jin@gmail.com, jjin@bluewin.ch (J. Jin), max@post.harvard.edu (M. von Zedtwitz).