International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

MANAGEMENT STRATEGY TO DEVELOP NATIONAL

TECHNOLOGY CAPABILITY
Vuyani Lingela
Department of Science and Technology, Private Bag X 894, Pretoria 0001
South Africa
Vuyani.Lingela@dst.gov.za

Abstract
The objective of this paper was to use only three variables to develop a quantitative model to
determine and benchmark the level of national technology capability (NTC) internationally. This paper
achieved its objectives by developing and applying the new NTC model to determine and compare the
following three aspects, between 33 OECD member and non-member countries presented in this
paper: the level of efficiency in the national system of knowledge production; the level of efficiency in
technology development; and the level of national technology capability. This paper also verified the
relevance of the NTC as an analytical tool to determine and benchmark the levels of NTC
internationally by determining the relationship between the size of national economies (gross domestic
product) and their levels of technology capability (percentage). The purpose of this test was not to
establish a causal relationship between the level of NTC and the size of the economy. The results
suggest a very strong and statistically significant relationship between the levels of technology
capability and the size of the national economies. These results indicate that countries such as Japan
and Germany, which have attained the highest levels on NTC, are also enjoying the highest levels of
economic prosperity (GDP).
Another aspect observed from these results is that countries such as Netherlands, Italy, Chinese
Taipei, Korea and France, which have about the same or smaller populations as South Africa, have
achieved greater levels of technology capability compared to South Africa. These countries have also
achieved greater economic prosperity compared to South Africa in 2005. On the other hand, the
results suggested that countries that have low levels of technology capability tend to have small
economies. These results also presented a unique set of countries such as Russia, Mexico and Spain,
which have relatively large economies but have low levels of technology capability. The findings
presented in the existing body of literature validated the results presented in this paper. Although this
paper focused on 33 countries whose data is available in the public domain, the methodology
introduced in this paper can be applied at different institutional levels within a country or between
different countries. For example, the NTC can be applied to determine and compare levels of
technology capability between different research institutions, universities and companies within a
country or between different countries. Governments, research institutions, universities and companies
within a country or between different countries can also apply the NTC model to develop strategic
national or international partnerships for mutual benefit.
Keywords - National technology capability, knowledge production, technology development.

1 INTRODUCTION
Knowledge production is one of the most important drivers of the global knowledge economy and
remains a decisive factor limiting developing economies to rise above their socio-economic challenges
to take advantage of the opportunities presented by national and global markets. The importance of an
efficient national system of knowledge production is characterised by the gradual shift in the structure
of the global economy from labour intensive, resource based economies to knowledge intensive, and
service based economies. In practical terms, this shift is characterised by the prevailing global trend
characterised by the declining importance of agriculture and resource based sectors (e.g. mining and
manufacturing) in the gross domestic product (GDP) of many countries and the increasing importance
of the service sector in the GDP [13].
Together with knowledge production, technology development is one of the most important drivers of
the global knowledge economy and remains a decisive factor for the growing digital divide between
developed and developing economies. The UNDP [18] argues that even though high-tech start-ups

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have thrived on venture capital in the United States, there is little prospect of such financing in many
developing countries, where even basic financial services are underdeveloped. Further, the UNDP
states that the heart of the problem is that technology may be both a tool for development and a
means for competitive advantage in the global economy. The dramatic increase in the number of
patent applications filed by residents of industrialised and newly industrialised countries to patent
offices internationally explains the importance of technology development in the global economy.
One of the most important characteristic features of developing countries is the low number of
technologies developed using their national scientific and engineering workforce [14]. Technology
acquisition involves significant resource costs and requires the active participation of both the
transferor and transferee [8; 11]. When acquiring new technologies, countries or firms with low
technology capabilities would have to devote substantial resources to assimilate, adapt and integrate
acquired technologies into their production systems [4]. Countries with higher technology capability will
require fewer human, technical and financial resources to acquire the same technologies. This
explains why it remains difficult to replicate knowledge and technologies between firms and countries
that have attained different levels of technology capability and economic prosperity.
Explaining the importance of the national technology capability for technology transfer, Archibugi and
Michie [1] make known that no technology transfer can be effective without an endogenous effort to
acquire that knowledge. They explain that even if leading nations were willing to share their knowledge
or expertise with catching-up countries, the latter would still have to devote substantial energies to
attempt to assimilate it, including the development of their own endogenous scientific and
technological capabilities. Odagiri and Goto [12] show that the presence of engineers and
entrepreneurs who were willing to take risks and sustain efforts under adversity as well as the general
ability of engineers to absorb foreign technology and the ability of workers to absorb new production
processes account for some of the key factors that facilitated industrialization in Japan.
Articulating the need for new and improved indicators of technological capability, Archibugi and Coco
[3] state that governments, policy makers, analysts and academic researchers need indicators of
technological capability to understand economic and social transformation. Governments need this
information to contextualise the performance of their country in relation to the performance of their
development partners and competitors. They caution that no single number that can provide
comprehensive information on the entire technological capability of a country. Businesses for example
base their international trade and investment decisions on technical and other factor conditions in
different countries.
Even though it is taken for granted that technological capabilities are a fundamental component for
achieving a satisfactory quality of life of higher incomes, Archibugi and Coco [2] insist that the role of
technological capability in social and economic development should be conceptualised and quantified.
Archibugi and Coco [2] developed a new aggregate indicator of technological capability known as the
Technological Capabilities Index (ArCo) to measure the levels of national technological capability. The
ArCo is building on existing international body of knowledge for measuring national levels of
technological capabilities, namely: the World Economic Forum Technology Index [22; 7], the United
Nations Development Program (UNDP) Technology Achievement Index [18; 6]), the United Nations
Industrial Development Organization (UNIDO) Industrial Development Scoreboard [19], and the RAND
Corporation Science and Technology Capacity Index [20; 21].
It is in this context that this paper introduces a new quantitative model using a limited number of
variables and a strategic framework to determine and manage the levels of national technology
capability (NTC). This paper defines NTC as the collective ability of the scientific, technical,
engineering and managerial workforce in a country to use their skills, national resources and leverage
international resources to acquire and create technologies for the production of goods and services to
meet national and global market needs. Applying the new NTC model and the strategic framework,
this paper aims to determine and establish international comparison on the following three aspects: the
level of efficiency in the national system of knowledge production; the level of efficiency in the national
system of technology development; and the level of national technology capability.
The purpose of this paper is to introduce a quantitative model to determine and benchmark the level of
NTC internationally. Unlike most indices, the NTC model introduced in this paper uses only three
variables, compared to 8 or more variables used in each of the following indices: World Economic
Forum Technology Index [22]; UNDP Technology Achievement Index [18], Technological Capabilities
Index (ArCo) [2]; UNIDO Industrial Development Scoreboard [19]; and the RAND Corporation Science

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

and Technology Capacity [20; 21]. Based on the new NTC model, this paper introduces a new
framework representing strategies for countries to manage their technology capability.

2 DATA AND METHODS

This paper uses the following three variables: the number of patent applications filed by residents to
the United States Patent and Trademark Office (USPTO); the number of papers published by
residents in journals accredited by Thomson Reuters; and the number of researchers per million of
population in a country. This paper uses the number of patents as a proxy to measure the national
level of technology development. The number of patents is also included in all five indices mentioned
above. The number of scientific publications is used in this paper as a proxy to measure the national
level of knowledge production. Out of five indices, The ArCo and the RAND Corporation Science and
Technology Capacity are the only indices where scientific publications are included. The number of
researchers is used in this paper as a proxy to measure the national level of human resource
development in science and technology (S&T). Out of five indices, the RAND Corporation Science and
Technology Capacity is the only index where the number of researchers is included.
The unique feature of this paper is that it transforms well-known and readily available indicators of
knowledge production (publications), technology development (patents) and human resource
development in science and technology (researchers) into a new indicator representing the level of
NTC. The limited number of variables used in the NTC model introduced in this paper can significantly
minimise data transaction and management costs. This paper applies data obtained from the Main
Science and Technology Indicators database published by the OECD in May 2009 [15].
Corresponding data on the number of researchers in South Africa in 2006, which was missing in the
OECD database, was obtained from the 2006/07 National Survey of Research and Experimental
Development published by the Department of Science and Technology in 2008 [5]. This paper also
applies recent data obtained from the National Science Indicators published by Thomson Reuters [17].

2.1 Strategic framework to manage National Technology Capability

This paper introduces a strategic framework, in Fig. 1, to manage national technology capability (NTC)
based on the following two dimensions: the average number of researchers per scientific publication;
and the average number of researchers per patent application filed. Countries that have low numbers
of researchers per million of population both per scientific publication and per patent application filed
represent countries that have both high efficiency of knowledge production and technology
development. Such countries have high levels of technology capability. On the other hand, countries
that have high numbers of researchers per million of population per scientific publication and per
patent application filed represent countries have low efficiency of knowledge production and
technology development. Such countries have low levels of technology capability.

Number of researchers per patent application filed

High Low
per scientific publication

High Level of scientific

Number of researchers

Capacity/Low Level of High Level of National

Low
Technical Capacity (Technology Technology Capability
Chasm)

High Level of Technical

Low Level of National
High Capacity/Low Level of Scientific
Technology Capability
Capacity (Reverse Engineering)

Fig. 1. Management strategy for NTC

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Countries that have low numbers of researchers per million of population per scientific publication and
high number of researchers per million of population per patent application filed represent countries
that have high efficiency of knowledge production but low efficiency of technology development. Such
countries have high levels of scientific capacity but low levels of technical capacity. On the other hand,
countries that have high numbers of researchers per million of population per scientific publication and
low numbers of researchers per million of population per patent application filed represent countries
that have low efficiency of knowledge production but have high efficiency of technology development.
It is expected that such countries would have low levels of scientific capacity but high levels of
technical capacity. It is in this context that this paper explores appropriate strategies to manage NTC.

2.2 Quantitative model to determine the level of national technology capability

The following thee questions motivated the development of the NTC model:
a) What is the level of efficiency in the national system of knowledge production?
The efficiency in the national system of knowledge production is determined by the national level of
human resource development in science and technology. It is for this reason that this paper
determines efficiency in national system of knowledge production using the average number of
researchers per publication in journals accredited by Thomson Reuters. Given the same number of
researchers, it is expected that countries with efficient systems of knowledge production would
generate more knowledge than countries that do not have efficient systems.
EK = (Researchers / Publications)
The ratio between the total number of researchers (Researchers) per country and the total number of
papers published (Publications) by residents in journals accredited by Thomson Reuters is applied in
this paper to determine the level of efficiency in the national system of knowledge production (EK).
b) What is the level of efficiency in the national system of technology development?
Technology is a tool for cooperation as well as a tool for competition in the global knowledge economy.
Countries as well as their research institutions or firms that have large portfolios of technologies should
be able to gain upper hand in negotiations on benefit sharing of proceeds emanating from
technologies developed through joint research ventures. Countries that have large portfolios of
technologies are expected to attract new technology investment opportunities. Given the same number
of researchers, it is expected that countries with efficient systems of technology development would
produce more technologies than countries that do not have efficient systems.
ET = (Researchers / Patents)
It is in this context that this paper aims to determine the levels of efficiency in the national system of
technology development using the average number of researchers per patent applications filed by
residents. The ratio between the total number of researchers (Researchers) per country and the total
number of patent applications filed by residents to the USPTO is applied in this paper to determine the
level of efficiency in the national system of technology development (ET).
c) What is the level of national technology capability (NTC)?
The increasing contribution of technological innovation in the production of goods and services, to
meet national and global market demands, indicates the growing importance of technology in the
global knowledge economy. To attain high level of technology capability, countries need to build
efficient national systems of knowledge production and efficient national systems of technology
development. Given the same number of researchers, it is expected that countries that have
successfully attained high levels of efficiency in knowledge production (EK) and technology
development (ET) would have high levels of technology capability.
NTCM = (EK x ET) / Million of population
The product of the average number of researchers per publication in journals accredited by Thomson
Reuters and the average number of researchers per patent application filed by residents to the
USPTO is applied in this paper to determine the level of technology capability. This product is
normalised by population size to offset the effect of the population size on the levels of national
technology capability. For example, countries with large populations might show high levels of
technology capability than countries with small populations. The product of the efficiency in knowledge

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production (EK) and technology development (ET) which is normalised by the size of the population
represents the average number of researchers per unit of output per million of population (NTCM).
NTC = (Researchers / NTCM ) / Researchers
Finally this paper uses the average number of researchers per unit of output per million of population
(NTCM) to express the level of national technology capability as a percentage of the total number of
researchers (Researchers) per country (NTC). The purpose of this formulation is to broaden the scope
of the NTCM to account for technology capability for the entire country.

3 RESULTS

3.1 Efficiency in knowledge production

The level of efficiency in knowledge production is important because, given the same number of
researchers, it is expected that countries that have attained high levels of efficiency in knowledge
production will produce greater numbers of publications that countries that have low levels of efficiency
in knowledge production. The ratio between the total number of researchers per country and the total
number of papers published in journals accredited by Thomson Reuters is applied in this paper to
determine the levels of efficiency in the national systems of knowledge production. The results
presented in Table 1 show that countries that have achieved the highest levels of efficiency in
knowledge production produce one publication per year for every two researchers per country. On the
other hand, countries that show the lowest levels of efficiency in knowledge production require a
minimum of 16 researchers to produce one publication per year.

Table 1. Efficiency of knowledge production

Efficiency of Knowledge Production (EK)

Country/Year 2003 2004 2005 2006
1. Netherlands 2.13 2.34 2.07
2. Switzerland* 2.63 2.63
3. Italy 2.88 2.83 3.07 3.19
4. Slovenia 2.93 3.19 3.59 3.79
5. Belgium 3.74 3.79 3.64
6. Ireland 4.94 4.40 4.19 3.97
7. Greece 4.39 4.28
8. Singapore 4.61 4.31 4.33 4.29
9. France 4.69 4.79 4.62 4.64
10. Denmark 4.24 4.48 4.73 4.61
11. Sweden 4.47 4.79
12. New Zealand 5.40 5.00
13. Austria* 5.03 5.03 5.39
14. Germany 5.61 5.30
15. Norway 6.51 5.59
16. Spain 5.92 5.92 5.81 5.71
17. Turkey 7.01 5.80 5.89 5.94
18. Finland 6.65 6.15 6.08 5.93
19. Czech Republic 5.99 5.87 6.33 5.94
20. Hungary 6.56 6.72 6.35 6.43
21. Portugal 7.92 7.18 6.99
22. Poland 7.40 6.93 7.05 6.40
23. Mexico** 7.14 7.14
24. Chinese Taipei 7.81 7.56 7.26 6.92
25. South Africa 7.47 8.32 8.29 7.38
26. Slovak Republic 8.08 7.63 8.45 7.90

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Efficiency of Knowledge Production (EK)

Country/Year 2003 2004 2005 2006
27. Iceland 8.56 8.47 8.51
28. Korea 9.56 8.65 8.91 8.95
29. Argentina 9.13 9.34 9.51 9.71
30. Japan 10.78 10.72 11.18 11.28
31. Romania 11.70 11.62 11.55 10.20
32. Luxembourg 16.18 13.50
33. Russia 16.03 15.82 15.73 16.03
*2005 data is based on 2004 data
**2005 data is based on 2003 data

Based on the results presented in this paper, the list of countries presented in Table 1 can be
clustered into three categories. The first category includes countries that have attained the highest
levels of efficiency in knowledge production. This category includes countries ranked from number 1 to
11 in Table 1, which require less than five researchers per country to produce one research
publication. The second category includes all the countries ranked from number 12 to 29 in Table 1,
which include countries requiring 6 to 10 researchers per country to produce one research publication.
The third category includes countries showing the lowest levels of efficiency in knowledge production.
This category includes countries ranked from numbers 30 downwards in Table 1, which require a
minimum of 10 researchers per country to produce one research publication.

3.2 Efficiency in technology development

The level of efficiency in technology development is important because, given the same number of
researchers, it is expected that countries with high levels of efficiency in technology development
would file greater numbers of patent applications that countries that have low levels of efficiency in
technology development. The ratio between the total number of researchers per country and the total
number of patent applications filed by residents to the USPTO is applied in this paper to determine the
levels of efficiency in the national systems of technology development. The results presented in Table
2, show that countries that have achieved the highest levels of efficiency in technology development
file one patent application per year for every seven researchers per country. On the other hand,
countries that show the lowest levels of efficiency in technology development require a minimum of
2,000 researchers to file one patent application per year.

Table 2. Efficiency of technology development

Efficiency of Technology Development (ET)

Country/Year 2003 2004 2005 2006
1. Chinese Taipei 7.27 7.23 6.98 6.54
2. Japan 13.76 12.81 11.97 11.38
3. Korea 19.03 15.39 13.63 11.83
4. Netherlands 20.17 17.20 15.67
5. Switzerland* 18.66 18.66
6. Germany 21.02 19.66
7. Finland 27.61 24.44 24.99 22.36
8. Singapore 30.50 28.73 30.43 25.79
9. Belgium 31.90 36.18 33.40
10. Ireland 43.14 41.29 34.21 38.52
11. France 36.38 36.63 36.09 36.57
12. Sweden 30.94 36.78
13. Italy 35.69 36.90 41.94 41.89
14. Austria* 43.18 43.18 40.85

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

Efficiency of Technology Development (ET)

Country/Year 2003 2004 2005 2006
15. Denmark 35.97 42.83 43.59 37.85
16. Luxembourg 33.72 47.90
17. Norway 79.51 68.39
18. Iceland 62.80 72.09 89.38
19. New Zealand 65.86 78.32
20. Slovenia 142.84 116.84 177.77 165.40
21. South Africa 137.08 150.41 199.32 171.39
22. Hungary 256.71 211.25 239.75 229.27
23. Mexico** 240.96 240.96
24. Spain 261.66 244.21 258.24 228.70
25. Czech Republic 515.10 494.96 463.48 345.01
26. Greece 561.16 491.12
27. Argentina 348.87 448.22 521.81 457.58
28. Poland 1,600.54 955.75 959.56 983.41
29. Russia 1,201.69 1,201.87 1,068.64 944.03
30. Slovak Republic 3,221.60 1,446.17 1,095.38 940.80
31. Portugal 1,792.75 1,227.07 1,144.52
32. Romania 2,360.73 1,703.31 1,644.89 1,038.69
33. Turkey 2,661.43 1,606.46 1,822.96 1,269.27
*2005 data is based on 2004 data
**2005 data is based on 2003 data

Based on the results presented in this paper, the list of countries presented in Table 2 can be
clustered into three categories. The first category includes countries that have attained the highest
levels of efficiency in technology development. This category includes countries ranked from number 1
to 19 in Table 2, which require less than 100 researchers per country to produce one patent
application. The second category includes all the countries ranked from number 20 to 27 in Table 2,
which includes countries requiring 101 to 600 researchers per country to file one patent application per
year. The third category includes countries showing the lowest levels of efficiency in technology
development. This category includes countries ranked from numbers 28 downwards in Table 2, which
require a minimum of 1,000 researchers per country to file one patent application per year.

3.3 National Technology Capability

This paper defines NTC as the collective ability of the scientific, technical, engineering and managerial
workforce in a country to use their skills, national resources and leverage international resources to
acquire and create technologies for the production of goods and services to meet national and global
market needs. The increasing contribution of technological innovation in the production of goods and
services, to meet national and global market demands, indicates the growing importance of technology
in the global knowledge economy. Based on the empirical results presented in their study, Hung and
Tang [8] suggest that the technological capability (including technological level, technological
innovation and R&D activities) is the most significant factor influencing the determination of modes of
technology acquisition.
This paper uses the product of the average number of researchers per publication in journals
accredited by Thomson Reuters and the average number of researchers per patent application filed by
residents to the USPTO to determine the level of technology capability. The results presented in Table
3 present different levels of technology capability attained by different countries that have achieved
different levels of economic prosperity. For example, while some countries have achieved the highest
levels of technology capability (>90%) others are experiencing very low levels (<1%). Based on the
results presented in this paper, the list of countries presented in Table 3 can be clustered into three
categories. The first category includes countries such as Japan and Germany that have attained the
highest levels of technology capability (>60%) in 2005. The second category includes countries such
as Netherlands, Italy, Chinese Taipei, Korea and France, which have achieved 30% to 60% level of
technology capability in 2005.

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The third category include countries ranked from numbers 8 to 33 in Table 3 which have the lowest
levels (<16%) of technology capability. The majority (67%) of countries listed in Table 1 have achieved
less than 4% level of technology capability. Based on their analyses of research interactions between
public R&D institutions and industry in India, Mohan and Rao [10] suggested some of the possible
reasons for poor levels of national technology capability. They suggest that this might be because
R&D is pursued for its inherent scientific value. They explain for example that public R&D institutions in
developing countries give low priority to commercial success and market needs, even though they are
expected to play an important role in building technological competence of domestic industries.

Table 3. National Technology Capability

National Technology Capability (NTCM) National Technology Capability (%)

Country/Year 2003 2004 2005 2006 2003 2004 2005 2006
1. Japan 1.16 1.08 1.05 1.01 86.06 93.02 95.47 99.46
2. Germany 1.43 1.26 69.91 79.13
3. Netherlands 2.65 2.48 1.99 37.80 40.35 50.21
4. Italy 1.78 1.79 2.19 2.26 56.03 55.78 45.56 44.17
5. Chinese Taipei 2.51 2.41 2.22 1.98 39.84 41.52 44.97 50.59
6. Korea 3.80 2.77 2.52 2.19 26.31 36.08 39.65 45.58
7. France 2.75 2.81 2.65 2.69 36.34 35.60 37.70 37.23
8. Switzerland* 6.58 6.58 15.20 15.20
9. Belgium 11.50 13.18 11.61 8.69 7.59 8.61
10. Mexico** 16.89 16.89 5.92 5.92
11. Sweden 15.44 19.50 6.48 5.13
12. Austria* 26.54 26.54 26.60 3.77 3.77 3.76
13. Finland 35.20 28.75 28.96 25.18 2.84 3.48 3.45 3.97
14. Singapore 33.34 28.98 30.48 25.26 3.00 3.45 3.28 3.96
15. South Africa 21.76 26.32 34.48 26.20 4.60 3.80 2.90 3.82
16. Ireland 53.40 44.75 34.54 35.97 1.87 2.23 2.90 2.78
17. Spain 36.88 33.86 34.60 29.61 2.71 2.95 2.89 3.38
18. Denmark 28.31 35.52 38.09 32.10 3.53 2.82 2.63 3.12
19. Norway 113.30 82.78 0.88 1.21
20. New Zealand 87.18 93.74 1.15 1.07
21. Russia 132.43 131.43 116.76 105.68 0.76 0.76 0.86 0.95
22. Argentina 83.85 109.10 128.06 113.49 1.19 0.92 0.78 0.88
23. Turkey 263.78 129.75 149.11 103.23 0.38 0.77 0.67 0.97
24. Hungary 166.17 140.39 150.90 146.40 0.60 0.71 0.66 0.68
25. Poland 310.02 173.40 177.35 164.98 0.32 0.58 0.56 0.61
26. Greece 223.63 189.39 0.45 0.53
27. Czech Republic 302.25 284.51 286.52 199.54 0.33 0.35 0.35 0.50
28. Slovenia 209.44 186.57 318.75 312.08 0.48 0.54 0.31 0.32
29. Portugal 1,360.22 838.76 758.67 0.07 0.12 0.13
30. Romania 1,270.08 912.48 877.98 490.80 0.08 0.11 0.11 0.20
31. Luxembourg 1,208.30 1,389.82 0.08 0.07
32. Slovak Republic 4,837.93 2,051.38 1,719.06 1,379.12 0.02 0.05 0.06 0.07
33. Iceland 1,857.84 2,064.47 2,499.73 0.05 0.05 0.04
* 2005 data is based on 2004 data
**2005 data is based on 2003 data

As illustrated in Fig. 2, this paper verified the relevance of the NTC as an analytical tool to determine
and benchmark the levels of NTC internationally. This paper established international comparison by
determining the relationship between the size of national economies (gross domestic product) and

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their levels of technology capability (percentage). The purpose of this test was not to establish a
causal relationship between the level of NTC and the size of the economy. The objective was to
demonstrate the relevance of the NTC as a practical tool to compare the levels of technology
capability between countries that have attained different levels of economic development. Another
reason was to illustrate that countries that have attained high levels of economic prosperity tend to
have high levels of technological capability. Their technology capabilities are embedded in goods and
services produced by firms from these countries to meet the global market demands.
The results presented in Fig. 2 suggest a very strong and statistically significant relationship (R=0.814;
2
R =0.662; p=0.000) between the levels of technology capability (percentage) and the size of the
national economies. These results indicate that countries such as Japan and Germany which have
attained the highest levels on NTC (>60%) are also enjoying the highest levels of economic prosperity
(GDP). Another aspect observed from these results is that countries such as Netherlands (16.3 million
people), Italy (58.6 million people), Chinese Taipei (22.8 million people), Korea (48.1 million people)
and France (62.8 million people) which have about the same or smaller populations as South Africa
(47.3 million people) have achieved greater levels of technology capability compared to South Africa in
2005. These countries have also achieved greater economic prosperity compared to South Africa in
2005.

4,000
Japan
Gross Domestic Product (Billion current PPP$)

3,000

Germany

2,000
France
Russia
Italy
Mexico
South Korea
Spain
1,000
Turkey
Chinese Taipei
Poland
South Africa Netherlands
Belgium
Switzerland
Sweden
0
0 25 50 75 100

National Technology Capability (%)

Fig. 2. National technology capability

On the other hand, Fig. 2 suggests that countries that have low levels of technology capability tend to
have small economies. These results also present a unique set of countries such as Russia, Mexico
and Spain, which have relatively large economies but have low levels of technology capability.
Literature review was conducted to uncover why it is possible that a country with relatively large
economy has low levels of technology capability. The findings presented by Yegorov [23], in his paper
focusing on the main characteristics of the post-Soviet research and development (R&D) systems,
validates the results presented in Fig. 3 in this paper. The Russian R&D system, which was

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responsible for major achievements during the era of the Soviet Union, has been unsuccessful in the
1990s and early 2000s to redirect scientific activities away from military and towards civilian goals [23].
Yegorov [23] explains that there was little need for mechanism for intellectual property rights (IPR)
protection in a highly centralised Soviet Union planning system where the state exerted control over
almost all R&D results and their utilisation. Following the collapse of the Soviet Union in 1991, the
planning system could not react satisfactorily to new challenges and could not redistribute resources
effectively to new areas of S&T. As a result, the Soviet Union started to lag behind in some key and
fast growing scientific and technological disciplines, such as electronics and biotechnology, while its
position in mathematics, physics and new materials remained relatively strong up to the beginning of
the 1990s. The system of regulation of the scientific activities and the corresponding rewards were
quite different from those that existed in Western countries. Adding to this problem, a significant
number of scientists emigrated from the post-Soviet countries during 1990s.
Russia for example lacks indirect measures to promote cooperation between research organisations
and industry. Consequently, there is relatively weak stimulus for larger industrial enterprises to
increase their innovation activities because of the underdeveloped regulations in a variety of areas,
including the protection of IPR [23]. Yegorov [23] recommended the state to create favourable
conditions for the introduction of innovation. He points out that the introduction of adequate legal
protection for IPR, especially in foreign countries, is of critical importance for individual researchers,
science-based small and medium enterprises, S&T institutes and foreign companies seeking to
engage in direct investment or some other form of business alliance and for domestic companies that
seek to cooperate with them. He explains that Russia urgently needs not only a serious transformation
within the R&D system, but also important changes in the national system of innovation are required.
The findings presented by Solleiro and Castañón [16], in their paper focusing on the competitiveness
in Mexico as well as its innovation system, also validates the results presented in this paper in Fig. 3.
They indicate that Mexico’s competitive position is low, especially if its exporting sector and the size of
its economy are taken into account, and this state of condition has not changed much from 1997 to
2002. Reinforcing the conclusion that the innovative results of the firms continue to be very poor
relative to the size of the economy of Mexico, Solleiro Castañón [16] indicate that by 2001 Mexican
nationals applied for 534 patents, 325 of which were from independent inventors, 183 from large
enterprises and 24 from research centres. Metcalfe and Ramlogan [9] presented the research findings
suggesting that the limited absorptive capacity of universities in Mexico, which provide the bulk of
scientific and technological talent, weakens the ability of the industry to interact with the S&T system.

4 CONCLUSIONS
The objective of this paper was to use only three variables to develop a quantitative model to
determine and benchmark the level of national technology capability (NTC) internationally. Indices
such as the Technology Index [22]; Technology Achievement Index [18]; Technological Capabilities
Index [2]; Industrial Development Scoreboard [19]; and the RAND Corporation Science and
Technology Capacity [20; 21] use eight or more variables. The following three variables were used
throughout this paper: the number of patent applications filed by residents to the United States Patent
and Trademark Office (USPTO); the number of papers published by residents in journals accredited by
Thomson Reuters; and the number of researchers per million of population in a country.
This paper achieved its objectives by developing and applying the new NTC model to determine and
compare the following three aspects, between 33 OECD member and non-member countries
presented in this paper: the level of efficiency in the national system of knowledge production; the level
of efficiency in technology development; and the level of national technology capability. All the
countries included in this study were clustered into three categories based on their level of efficiency in
knowledge production. The first category represents 33% of countries that require less than five
researchers per country to produce one research publication per year. The second category
represents 55% of countries require 6 to 10 researchers per country to produce one research
publication per year. The third category represents 12% of countries that require a minimum of 10
researchers per country to produce one research publication per year.
Countries were also clustered into three categories based on their level of efficiency in technology
development. The first category represents 58% of countries that require less than 100 researchers
per country to produce one patent application per year. The second category represents 24% of
countries that require 101 to 600 researchers per country to file one patent application per year. The
third category represents 18% of countries that require a minimum of 1,000 researchers per country to

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

file one patent application per year. Finally, countries were also clustered into three categories based
on their level of technology capability. The first category represents 6% of countries such as Japan
and Germany that have attained the highest levels of technology capability (>60%) in 2005. The
second category represents 15% of countries such as Netherlands, Italy, Chinese Taipei, Korea and
France, which have achieved 30% to 60% level of technology capability in 2005. The third category
represents 79% of countries that have the lowest levels (<16%) of technology capability.
This paper also verified the relevance of the NTC as an analytical tool to determine and benchmark
the levels of NTC internationally by determining the relationship between the size of national
economies (gross domestic product) and their levels of technology capability (percentage). The
purpose of this test was not to establish a causal relationship between the level of NTC and the size of
the economy. The objective was to demonstrate the relevance of the NTC as a practical tool to
compare the levels of technology capability between countries that have attained different levels of
economic development. The results suggest a very strong and statistically significant relationship
between the levels of technology capability and the size of the national economies. These results
indicate that countries such as Japan and Germany which have attained the highest levels on NTC
(>60%) are also enjoying the highest levels of economic prosperity (GDP).
Another aspect observed from these results is that countries such as Netherlands, Italy, Chinese
Taipei, Korea and France, which have about the same or smaller populations as South Africa, have
achieved greater levels of technology capability compared to South Africa in 2005. These countries
have also achieved greater economic prosperity compared to South Africa in 2005. On the other hand,
the results suggested that countries that have low levels of technology capability tend to have small
economies. These results also presented a unique set of countries such as Russia, Mexico and Spain,
which have relatively large economies but have low levels of technology capability. The findings
presented in the existing body of literature validated the results presented in this paper.
The NTC model and the strategic framework introduced in this paper captures the dynamics involved
in the national system of knowledge production and the national system of technology development to
determine and compare the levels of NTC. Although this paper focused on 33 countries whose data is
available in the public domain, the methodology introduced in this paper can be applied at different
institutional levels within a country or between different countries. For example, the NTC can be
applied to determine and compare levels of technology capability between different research
institutions, universities and companies within a country or between different countries. Governments,
research institutions, universities and companies within a country or between different countries can
also apply the NTC model to develop strategic national or international partnerships for mutual benefit.

Disclaimer
Vuyani Lingela is the Chief Director: International Research in the Department of Science and
Technology in South Africa. He wrote this paper in his personal capacity.

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