Technological capability building in developing countries is considered to be of vital importance for bringing about process and product improvements, and thus helping a country to remain competitive in this age of globalisation. However, in the literature, a generally accepted term referring to technological capability development is yet to emerge. Although the term ‘technological capability building’ appears to be gaining popularity, various other concepts such as ‘technological capacity’, ‘indigenous technological capability’ and ‘technological mastery’ are also used to refer to this concept. But in spite of the use of various terminologies, there is a strong consensus that it is a learning process which has strong dynamic features.

So, this concept is in sharp contrast with the conventional static neoclassical technical choice viewpoint, according to which, “technology is taken to be freely available to all countries and, within countries, to all firms. Countries simply settle on appropriate level of capital/labour intensity in accordance to their factor price ratios, determined by their relative endowments of physical capital and labour.... To the extent that technological lags are admitted, developing countries are taken to receive all relevant improvements from developed country innovators: there is no problem in assimilating the transferred technology in the developing country; there are no adaptations required, since alternatives are available for all factor prices; all firms remain equally efficient; firm-specific learning or technical effort are unnecessary and irrelevant”².