This book interprets technological capabilities broadly to include the management, strategic marketing and linkage capabilities which small and medium-sized local firms must develop if they are to sustain competitiveness under the changing competitive conditions that characterize the global economy today. It thus emphasizes the great diversity of knowledge and skills which firms need in order to carry out productive activities, including those involving new initiatives - that is, innovation. Such a definition is also more in keeping with our understanding of the process of innovation characterized by a constant interaction among a great variety of economic agents and institutions, a combination of both formal training and learning-by-doing and the incremental upgrading of products and processes.