This chapter analyzes the accumulation of technological capabilities among Brazilian firms in three sectors: steel, pulp and paper, and aerospace. Its central concern is to evaluate the degree to which the abandonment of import-substitution industrialization and the movement toward greater openness may have impacted the process of capability accumulation. The analysis offers evidence to suggest that the accentuated competitive pressure brought about by the opening of the Brazilian market has prompted firms to progress up the hierarchy of capabilities, approaching or indeed reaching the global frontier. In realizing this progress, enterprises, in some instances, have been assisted by the evolution of technology policy and the role of outside research institutes. At the same time, the growing scope of international business connections has acted to accelerate the pace of capabilities accumulation.
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