Formation of Technological Capabilities for Catch-up in Complex Product Systems (The case of directional drilling equipments for oil & gas wells)

Document Type : Research Paper


1 Ph.D. Candidate of Technology Management, University of Tehran (Alborz Campus), Tehran, Iran.

2 Faculty Member, Faculty of Management, University of Tehran (Alborz Campus), Tehran, Iran.

3 Faculty Member, Technology and Innovation Policy Departments, National Research Institute for Science Policy, Tehran, Iran.


The majority of Drilling equipment in oil gas industry is considered as Complex Products and System. Specific capabilities
In the oil industry, most downhole drilling pieces of equipment are considered complex product systems. During the last decades, the National Iranian Drilling Company has made considerable efforts to acquire knowledge and technology of manufacturing related to directional drilling and reserves evaluation equipment. In this regard, this study uses the qualitative case study research strategy to examine the stages of technological capability formation for the production and development of diversion drilling equipment in this company during 27 years (1992 to 2019). According to the research findings, the company has achieved the necessary technological capabilities to manufacture equipment, despite the limitations in international cooperation. Also, these capabilities have been formed in three stages: 1) cooperation with foreign firms; 2) purchasing, installation, and exploitation of the imported equipment; and 3) independently manufacturing by developing an innovation network.


Main Subjects

Acha, V., Davies, A.,  Hobday, M., & Salter, A. (2004). Exploring the capital goods economy: Complex product systems in the UK. Industrial and Corporate Change, 13(3), 505-529.
Asghari, M., & Madani, S. H. (2016). Designing a model for managing technological capabilities with a structural equation approach in the Iranian petrochemical industry (case study: Fanavaran Petrochemical Company) [In Persian]. International Conference of Management Elites, Tehran, Iran. Retrieved from
Bagheri Moghaddam, N., Mousavi, S. M., Nasiri, M., Moallemi, E., & Yosefdehi, H. (2011). Wind energy status of Iran: Evaluating Iran’s technological capability in manufacturing wind turbines, Renewable and Sustainable Energy Reviews, 15(8), 4200-4211.
Behrouz, T., & Modares, E. (2012). Technology development in upstream oil and gas industries. Journal of Exploration & Production Oil & Gas. 10(7), 26-29 [In Persian].
Bell, M., & Pavitt, K. (1995). The development of technological capabilities. In I. ul Haque, M. Bell, C. Dahlman, S. Lall, & K. Pavitt (Eds.), Trade, technology and international competitiveness (pp. 69-101). EDI Development Studies.
Blanchard, B. S., & Blyler, J. E. (2016). System engineering management. John Wiley & Sons.
Choung, J.,Y., Hwang H. R., & Song, W. (2014). Transitions of innovation activities in latecomer countries: An exploratory case study of South Korea. World Development, 54, 156-167.
Chudnovsky, D. (1983). Capital goods production in the third world: Economic study of technical acquisition. F Pinter.
Figueiredo, P. N. (2003). Learning, capability accumulation and firms differences: Evidence from latecomer steel. Industrial and Corporate Change, 12(3), 607-643. 
Furtado, A. T., & de Freitas, A. G. (2000). The catch-up strategy of Petrobras through cooperative R&D. The Journal of Technology Transfer25(1), 23-36.
Ghazinoory, S. S., & Mohajeri, A. (2019). Technological learning and its promotion policies [In Persian]. Journal of Science & Technology Policy, 11(2), 439-454.
Gobbo Jr, Jose, & Olsson, Annika. (2010). The transformation between exploration and exploitation applied to inventors of packaging innovations. Technovation, 30(5-6), 322-331.
Hobday, M. (1998). Product complexity, innovation and industrial organization. Research Policy, 26 (6), 689–710. 
Hobday, M., Rush, H., & Joe, T. (2000). Innovation in complex products and systems. Research Policy, 29(7-8), 793-804.
Hwang, C. Y. (2000). The aircraft industry in a latecomer economy: The case of South Korea [Doctoral dissertation, University of Sussex]. EThOS. Retrieved from
Ishida, H. (2007). Energy strategies in China and India and major countries’ views. HP (3/2007), The Institute of Energy Economics, Japan.
Kiamehr, M. (2013). Technological capabilities of complex capital goods in developing economies: The case of a company in Iran’s hydro electricity generation industry [In Persian]. Journal of Science and Technology Policy, 6(1), 67-80.
Kiamehr, M., Hobday, M., & Hamedi, M. (2015). Latecomer firm strategies in complex product systems (CoPS): The case of Iran’s thermal electricity generation systems. Research Policy, 44(6),  1240-1251.
Kim, L. (1997). Imitation to innovation: The dynamics of Korea's technological learning. Harvard Business Press.
Kim, L. (1999). Building technological capability for industrialization: Analytical frameworks and Korea’s experience. Industrial and Corporate Change, 8(1), 111-132.
Lall, S. (1992). Technological capabilities and industrialization. World development20(2), 165-186.
Lee, J. J., & Yoon, H. (2015). A comparative study of technological learning and organizational capability development in complex products systems: Distinctive paths of three latecomers in military aircraft industry. Research Policy, 44(7), 1296–1313.
Malerba, F., & Vonortas, N. S. (2009). Innovation networks in industries. Edward Elgar Publishing.
Miles, M. B., Huberman, A. M. (1994). Qualitative data analysis: An expanded sourcebook (2nd ed.). Sage.
Naghizadeh, M., Manteghi, M., Ranga, M., & Naghizadeh, R.(2016). Managing interaction in complex product systems: The experience of IR-150 aircraft design program. Technological Forecasting and Social Change, 122, 253-261.
Nambisan, S. & Sawhney, M. (2011). Orchestration processes in network-centric innovation: Evidence from the field. Academy of Management Perspectives. 25. 40-57.
Park, T. Y. (2013). How a latecomer succeeded in a complex product system industry: Three case studies in the Korean telecommunication systems. Industrial and Corporate Change, 22(2), 363–396.
Park, T. Y., & Kim , J. Y. (2014). The capabilities required for being successful in complex product systems: Case study of Korean e-government. Asian Journal of Technology Innovation, 22(2), 268–285.
Ren, Y. T., & Yeo, K. T. (2006). Research challenges on complex product systems (CoPS) innovation. Journal of the Chinese Institute of Industrial Engineers, 23(6), 519-529.
Roberto, A., Antonio, E, & Alba, V. D. (2017‏). Intenationalization of state multilatinas: A multi-case study in the oil sector. International Journal of Business, Economics and Management, 4(4), 65-81.
Rush, H., Bessant, J., Hobday, M., Hanrahan, E., & Medeiros, M. Z. (2014). The evolution and use of a policy and research tool: Assessing the technological capabilities of firms. Technology Analysis & Strategic Management, 26(3), 353-365.
Safdari Ranjbar, M., Gheidar Khelejani, J., Tahmasbi, S., & Tavakoli, G. R. (2016a). Key capabilities required for innovation and development of defense complex products and systems [In Persian]. Journal of Technology Development Management, 4(2), 133-158.
Safdari Ranjbar, M., Rahman Seresht, H., Manteghi, M., & Ghazinoori, S. S. (2016b). The pattern of building and accumulating technological capabilities for producing complex product systems in developing countries: The case study of Oil Turbo Compressor Company. Journal of Technology Development Management, 4(4), 9-38. [In Persian].
Sandberg, M. (1992). Learning from capitalists: A study of soviet assimilation of western technology. Almquist and Wirksell International.
Tahmasebi, S., Fartookzadeh, H., Bushehri, A., Tabaian, K., Gheidar Khelejani, J. (2017). The stages of formation and development of technological capabilities; case study: An marine industry organization [In Persian]. Journal of Science & Technology Policy, 9(4), 19-33.
Technology Studies Center of Industrial Policy Office of Sharif University of Technology (2006). Technology policy and market promotion: Along with case studies of 11 developing countries [In Persian]. Rasa Publications.
Teubal, M. (1984). The role of technological learning in the exports of manufactured goods: The case of selected capital goods in Brazil. World Development, 12(8), 849-865.
Viotti, E. B. (2015). Technological learning systems, competitiveness and development. Institute of Applied Economic Research.
Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal, 24(10), 881- 885.
Yin, R. K. (2014), Case study research: Design and Methods (5th ed.). Sage Publication.
Volume 9, Issue 2
(Special issue for technological catch-up)
September 2021
Pages 13-45
  • Receive Date: 02 February 2020
  • Accept Date: 14 August 2021
  • First Publish Date: 23 August 2021