The central challenge in the original Sussex Manifesto centred on massively increasing the developing countries’ scientific and technological capabilities for creating new knowledge and shaping the technologies they used. It also stressed the need for radical change in the national and international contexts within which those capabilities would be accumulated and used.
This paper reviews those ideas in their intellectual context of the late-1960s and early-1970s. With reference to industrial development broadly defined, it then outlines how our understanding about the accumulation of such innovation capabilities has changed since the 1960s, highlighting their role in shaping the direction of innovation and not just its rate. It notes, however, that other influential perspectives attach little importance to the role of industrial innovation capabilities in developing countries. On the one hand, they are seen as irrelevant when technologies from advanced economies can be acquired and absorbed. On the other, their most important components are often omitted from national S&T strategies that strengthen only centralised, public R&D capabilities.
The paper therefore emphasises the importance of policies that seek to develop two kinds of complementarity: between widely dispersed local innovation capabilities and (a) technology imports, and (b) centralised R&D activities.