The technological capability of a firm is partly embedded in its labour force. Skilled employees are a key asset for an innovative firm. Without skilled workers a firm cannot master new technologies, let alone innovate. Apart from researchers, it needs engineers who can manage manufacturing operations, salespeople able to understand the technology they are selling (both to sell it and to bring back customers’ suggestions), and general managers aware of technological issues.

Capability also depends on the characteristics of the firm: the structure of its labour force and facilities (skills, departments), its financial structure, its strategy on markets, competitors, alliances with other firms or with universities, and above all its internal organisation. Many of these aspects are complementary.

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