2.1. Technology Users Australia 100% 100% 33% 37% 0% 0% 0% 0% Chile 100% 100% 100% 83% 43% 13% 11% 20% 2.2. Technology Adaptors Australia 0% 0% 67% 50% 70% 69% 38% 27% Chile 0% 0% 0% 17% 57% 74% 67% 40% 2.3. Technology Innovators Australia 0% 0% 0% 13% 30% 31% 62% 73% Chile 0% 0% 0% 0% 0% 13% 22% 40%
3. Average „score‟ for firms capability levels (Score: 1= User; 2 = Adaptor; 3 = Innovator)
Australia 1.0 1.0 1.7 1.8 2.3 2.3 2.6 2.7
Chile 1.0 1.0 1.0 1.2 1.6 2.0 2.1 2.2
Chile/Australia 100% 100% 59% 67% 70% 87% 81% 81%
Although the number of firms is very small for the early 1970s, Table 5.6 suggests that the situation was very similar in the two countries at that time, the stage when a distinct KIMS supplier sector had barely emerged. In both countries the few interviewed firms that did exist as independent KIMS suppliers at that time were only Technology Users. Thereafter, however, two different
patterns of capability accumulation evolved. Over the 30-year period from 1975 to 2005, most Australian KIMS firms developed first into adaptors and then into innovators, but most Chilean KIMS suppliers lagged behind in becoming adaptors and then, compared to Australia, a smaller proportion evolved into innovators.
In a little more detail, the survey results indicate that, already by 1980, nearly 70 per cent of the small number of Australian firms had reached the Adaptor level. Five years later, the total number of firms had expanded rapidly, and a similar proportion was either at the Adaptor level or had moved on to become Innovators. By the 1990s none of the larger number of Australian firms remained as merely Technology Users, while one-third had become Innovators. Later, by the mid-2000s, it was still the case that none of the KIMS suppliers were merely Technology Users, while the proportion that had accumulated Innovator-level capabilities had more than doubled to 73 per cent.
In contrast, all the Chilean KIMS suppliers remained at the Technology User level at the start of the 1980s. Five years later only 17 per cent of them had moved up to the Adaptor level, and none had achieved innovator-level capabilities. Even in 1990, there were still no firms at this level, although more than half had reached the Adaptor level. It was not until the mid-1990s that a small proportion achieved Innovator level capabilities – 13 per cent, the same proportion as in Australia a decade earlier. This proportion had risen to 40 per cent by the mid-2000s, only a little more than half the proportion in that category in Australia at that time. Among the remaining 60 per cent, 20 per cent were still at the Technology User level.
Thus the level of technological capabilities accumulated by both Australian and Chilean KIMS suppliers was more or less steadily rising over the period from the late-1970s to the mid-2000s. However, the Australian KIMS suppliers moved ahead more rapidly at the start and maintained higher average levels of capability than the Chilean suppliers over the entire period. Nevertheless, as indicated by the relative scores in the last row of Table 5.6, KIMS suppliers in Chile gradually caught up with their Australian equivalents after their slow start. However, the catch up process seems to have peaked in the mid-1990s, with
Chilean firms falling back again to a lower relative capability level over the subsequent ten years through to the mid-2000s.
But this contrast between the capability development paths in the two countries involved more than just this general Chilean lag through the period. Probably more important was the specific timing of some of the differences relative to more general events in the development of the industry as a whole. Two of these timing issues appear to have been particularly important.
The first was the lag in the Chilean path at the start of the process in the late 1970s and early 1980s with no firms moving above the Technology User level by 1980 (and very few doing so by 1985). This occurred just at the time of the global emergence of a specialised KIMS supplier industry, and the difference between the Chilean and Australian paths through this phase was significantly shaped by the level of capabilities that had already been accumulated within mining companies in the previous Gestation stage. Since KIMS capabilities embodied within mining companies were much higher in Australia than in Chile, the role of mining companies as capability „incubators‟ was much more significant in Australia than in Chile, and provided a much more significant kick- start to the subsequent spin-off and knowledge spill over processes as the mining companies extended their vertical disintegration. It seems likely that this source of already created competence was particular important in contributing to the very quick achievement of Innovator and Adaptor levels of capability among the rapidly growing number of new entrants to the specialised KIMS industry in Australia during the early 1980s.
The second issue was about the timing of key features in the two paths relative to the immediately subsequent stages in the development of the specialised KIMS supplier industry, and more generally in relation to the window of opportunity opened up by the rejuvenation phase of the mining industry as a whole. This is discussed here with reference to Figure 5.2 that uses selected and simplified information from the earlier Table 5.6.
Because of their earlier development of Adaptive and Innovative capabilities in the late 1970s and early 1980s, the Australian KIMS suppliers were in a better
position than their Chilean counterparts to exploit the opportunities arising during the heart of the rejuvenation period (roughly 1985 to 1995). Not surprisingly therefore, information gathered during the survey illustrated ways in which Australian KIMS suppliers undertook more intensive and earlier efforts to exploit the opportunities opened up by the industries technological and organisational rejuvenation, especially the opportunities associated with the use of information technologies in new ways.
Figure 5.2: Evolution of the Percentage of KIMS Suppliers by Level of Technological Capability
Then a little later into the rejuvenation phase, KIMS suppliers in the two countries were in different positions to exploit the opportunities that arose through the late-1980s and early-1990s when the global KIMS sector as a whole began to shift from the emergence and development stage to the internationalisation phase. Far more Australian KIMS firms than Chilean ones had built up the bases of adaptive and innovative capabilities required to move into international markets.
CHILEAN KIMS AUSTRALIAN KIMS
1985 1995 2005 0% 25% 50% 75% 100% 0% 25% 50% 75% 100% 0% 25% 50% 75% 100% 1 user 2 adaptor 3 innovator 1 user 2 adaptor 3 innovator N = 6 N = 9 N = 8 N = 14 N = 10 N = 16 Percentage of firms in the sample Year/Stage Heart of the rejuvenation window During emergence and development During inter- nationalization During consolidation A ve ra ge „s core ‟
Finally, during the late-1990s and early 2000s globalisation and consolidation of the KIMS supplier industry became a key driver for sustained competitiveness and continuing accumulation of new and higher levels of technological capability. Once again, the Australian KIMS sector was in a position to play a leading role in these significant forms of organisational change. In contrast, the Chilean KIMS supplier sector – either because of a lack of capabilities or of inadequate awareness of the significance of these changes did not exploit the opportunities. As will be elaborated later, Chilean firms became objects of the global consolidation of the sector by firms from other countries, rather than playing active roles as consolidators themselves.
This section has now addressed the first of the Research questions posed at Chapter 3.
How have the levels of technological capabilities accumulated within KIMS suppliers in Chile changed since the 1970s, and what have been the main contrasts with experience in Australia?
Two comments should be added about the answer to that question.
First, the history of the development of technological capabilities in the Australian and Chilean KIMS supplier sectors is not simply a story of leading and lagging paths over a period of more than 30 years. It is also a story about how those paths interacted with wider developments in the global industry to result in what may prove to have been a missed opportunity for the laggards. Just as the Chilean mining industry, one of the global leaders at the time, was by-passed by the phase of radical transformation in the industry‟s technology in the late 19th century, so it may have „missed the bus‟ again in the late 20th century as another phase of radical transformation, and the associated rejuvenation of mature industries, opened a window of opportunity‟ to create an internationally competitive KIMS supplier sector.
Second the argument here is not that this missed opportunity resulted from a few inappropriate choices by key actors in Chile (e.g. Codelco). Instead the argument is that, as outlined in the explanation of the dual process model of technological learning at the end of Chapter 3, a wide range of international and
national circumstances cumulatively acted to impose massive constraints on the path of KIMS development in Chile.
The thesis now turns to address those two sets of circumstances. First, Chapter 6 will examine the historical processes by which the potential for learning and innovation was shaped by three key industry-level factors. Then, Chapter 7 will examine the more detailed micro-level learning and innovation cycle within firms themselves. Chapter 8 will integrate these two analyses.