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The R&D effort, even of the largest, most technologically advanced developing countries, and their most sophisticated firms, cannot match that of the major industrial nations or the largest corporations. Our objective in this paper is to analyse innovation, technical change and R&D management in technology-leaders to build a framework for R&D in technology-followers outside of those major nations. This framework emphasises the importance of specific learning mechanisms and puts forward an argument that in-house R&D is indeed required in technology-followers, but a profoundly different type of R&D. R&D units, based in the firm, can become the location for organised learning, the problem-solver of last resort in production, the inhouse knowledge store and gatekeeper, and the focus for independent design and product development capacity.

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