T h e discourse o n e c o n o m i c deve lopment policies has shifted during the 1990s. A t the heart o f current debates is the issue o f productivity growth, and whether particular strategies can engender rapid increases in productivity by stimulating technical change . It has l ong b e e n recognized that technical change is key to long-run growth. Until recently, the dominant approach to this question focused o n changing factor endowments - with labour-intensive technologies giving w a y to capital-and technology-intensive activities through incremental adjustments as relative prices change - and supported neo-l iberal po l i cy prescriptions. This parad igm, which emphasizes a "natural rate o f g r o w t h " and structural change, fails to adequately explain the unusually rapid growth o f the East Asian newly industrializing e conomies . T h u s , a heterodox approach has grown, o n e which views techno logy as a distinct set o f capabilities partly e m b o d i e d in physical capital (Ka ldor 1957). In this view, rapid growth stems f rom deliberate efforts to b r o a d e n and d e e p e n technological capabilities in conjunct ion with (and largely through) high rates o f investment in n e w physical capital. Long - run differences in industrial deve lopment involve and reflect differences in the accumulation o f technological capabilities - i.e. the national, industry and firm-specific skills; knowledge and organization that enable productive enterprises to efficiently utilize n e w knowledge ; information and equipment .