Contribution of new technology-based firms to the strengthening of technological capabilities in intermediate economies

This paper argues that the main contribution of new technology-based firms (NTBFs) is their "technological dynamism", which invests them with two major roles: a challenging role, implicit in their creation, whereby they break with the inertia of existing organisations; and a more long standing technology transfer role, acting as a source of new technologies, which they acquire and deliver by several means. The performance of these roles can be particularly valuable in less advanced economies, contributing to a strengthening of the indigenous capabilities in new technologies. Empirical research on a sample of Portuguese NTBFs has shown that these firms have indeed performed an important function by accessing new technological knowledge - both from local public research and from more advanced countries - which they further developed, turned into marketable applications and commercialised. But the conditions found in an "intermediate" economy such as Portugal present NTBFs with particular problems. The limited number of knowledgeable users prepared to adopt their products and the firms' difficulty to reach other type of clients, can be a major obstacle to their development. Therefore, if the country is to profit from NTBFs' challenging behaviour and technological competences, their acquisition and diffusion efforts should be backed, and complemented by demand oriented policies.