Learning to industrialize: A comparative study of four industrial poles in Brazil and Iran

This dissertation examines the consequences of commitments by private and public agents to behaviors and structures that promote learning for the relative success and continued growth of industrial and technology poles in developing countries. Going beyond conventional formulations of learning dynamics, this study distinguishes among three learning processes: learning-by-doing, interactive learning, and collective learning. Exploring a number of hypotheses and using interviews and secondary data on four cities in Brazil and Iran, I found that learning-by-doing is enhanced when firms make investments in developing engineering skills and in conducting imitative activities. In addition, sustained learning-by-doing is associated with diversification into unrelated markets, part ownership linkages to multinational corporations, and temporary protection of targeted industries. I found that interactive learning is promoted when major firms initiate supplier development programs, when user-producer relations are dense, and when technology transfer contracts target the disembodied part of the technology. I found collective learning to be enhanced when the state links subsidies to performance criteria, various organizations that constitute the technological infrastructure are imitation- and production-oriented, and institutions that foster social capital are enabled to play a complementary role to the state.; In the four cities studied, I found that the presence of such characteristics is associated with sustained development, while their systematic absence is related to arrested growth. Localities with strong learning characteristics have adjusted more successfully to market reform policies recently adopted by both nations.; This research leads to a number of policy recommendations at the national and regional/local levels. At the national level, governments are advised to develop a very limited number of industrial and technology poles at any one time. Learning dynamics are made more effective when governments benchmark price reductions and encourage the economy-wide diffusion of the subsequent benefits. At the local/regional level, state-sponsorship of developing new industrial specializations should be coupled with endogenous initiatives to mobilize local social capital as well as establishing linkages to national and global firms.