Acqu i r ing and adapting foreign technologies requires significant innovative capa - bilities. In this regard, technology per se is a necessary, but insufficient, condit ion for competit ive success in the market. O n c e acquired, technology must be a c c o m p a n i e d by growing abilities to apply it in product ion to improve profit margins. Product and process innovation contribute to higher value-added p r o - ducts and improved productivity respectively. This is true not only at the techn o l o g y frontier, but also for incremental innovation, the basis u p o n which Japanese companies , for example , have emerged as wor ld competitors. As international compet i t ion intensifies, recognit ion o f technology 's contribution to competitiveness has p laced it at the core o f f irms' and nations' growth strategies.