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This paper discusses why we need a theory and metrics of technology upgrading. It critically reviews existing approaches to technology upgrading, and proposes a theoretically relevant and empirically grounded intermediate conceptual and statistical framework to illustrate the types of challenges facing economies with different levels of income. It conceptualises technology upgrading as a three-dimensional process that considers the intensity and type of technology upgrading based on different types of innovation and technology activities; the broadening of technology upgrading through exploitation of technology and knowledge diversification; and interaction with the global economy via the import, adoption, and exchange of knowledge. We consider these to be necessary first steps towards a theory and metrics of technology upgrading and the generation of more relevant composite indicator of technology upgrading.

This article assesses the innovation capacities of the candidate central and east European countries (CEECs) and the countries of the EU by using a new framework for measuring national innovation capacity (NIC), based on 25 indicators. Based on regression and cluster analysis the article shows that NIC in the enlarged EU does not follow a simple east-west divide. The wider Europe is structured into three groups of countries, and CEECs fall into two, the less-developed and medium-developed EU groups. NICs in the enlarged EU are assessed across four dimensions of capacity: absorptive, R&D, diffusion and demand. In each of these dimensions a two- to three-tiering of countries is observed, which goes beyond a simple east-west pattern. The results of this assessment have important implications for new Member States and candidate countries, as well as for the EU policy towards structural assistance. Copyright Blackwell Publishing Ltd 2004.

The paper analyses the role of technoparks as instruments of innovation promotion in Kazakhstan using data from a firm survey and interviews. It explores three specific issues: first, the overall effectiveness of technoparks in promoting innovation development in Kazakhstan, second, the underlying innovation model in Kazakhstan technoparks, and third, whether technoparks can compensate for missing elements in the technology based infrastructure and environment. Our conclusions are that technopark firms are no more innovative than other firms. They are oriented largely towards the local market, and operate in traditional sectors; the frequency and intensity of their external links are more developed than are their internal links. The key motivations for relocating to a technopark seem to be lower rents and the possibility of accessing finance. Overall, Kazakh technoparks seem to be successful in terms of facilitating business incubation, but much less so in terms of innovation promotion and diversification of the economy. Focusing on technoparks as the main mechanism to diversify the economy seems to be an ineffective and uncertain policy option at this stage of the country's economic development. However, there seems to be significant scope for supporting business incubation. The conclusions of this study are of relevance to other emerging economies.