The first challenge is to acquire the capabilities to search actively for relevant and flexible technologies, secure the best sources and negotiate the best possible terms of acquisition. The second challenge is how to accelerate the process of technological mastery. There are two main actors in this game of technological capability acquisition, the firms and the government. The role of government will certainly be crucial in creating conditions conducive to exploiting new technological opportunities. One of the key policy areas in which government should intervene is the development of the human resource base needed for industrial development.
Training is an important source of capability acquisition.
Government should provide both the literacy base in the general population and the formal training needed for industrial training. In-firm training, either on the job or in a more formal framework, would then supplement, but cannot substitute for, such training. Infirm training is bound to be limited. The government will therefore have to subsidize firms or provide training facilities directly, or assist in securing foreign technical assistance. The other area for government intervention is the provision of an environment in which flexible adjustment of production structures in the face of changing demand conditions is made possible.