New economic policies and the diffusion of machine tools in Latin America

This paper argues that both old and new economic regimes in Latin America only partially ensured the successful diffusion of machine tools in the region. Import-substitution policies focused on suppliers, with resulting advances in domestic imitative, adaptive and innovating capabilities, but at high cost for users in expensive and technically inferior machine tools. The New Economic Model (NEM) focus on the user has provided wider availability and lower price of technologies, with resulting increases in productivity and efficiency, but domestic suppliers cannot establish themselves nor make the technologically crucial jump into the electronics era. The paper suggests an approach focusing on the joint upgrading of users and suppliers, and proposes policy initiatives aimed at addressing market failure and "systemic" issues. (C) 2000 Elsevier Science Ltd. All rights reserved.