Why do we need a theory and metrics of technology upgrading?

This paper discusses why we need a theory and metrics of technology upgrading. It criticallyreviews existing approaches to technology upgrading, and proposes a theoretically relevant andempirically grounded intermediate conceptual and statistical framework to illustrate the typesof challenges facing economies with different levels of income. It conceptualises technologyupgrading as a three-dimensional process that considers the intensity and type of technologyupgrading based on different types of innovation and technology activities; the broadeningof technology upgrading through exploitation of technology and knowledge diversification;and interaction with the global economy via the import, adoption, and exchange ofknowledge. We consider these to be necessary first steps towards a theory and metrics oftechnology upgrading and the generation of more relevant composite indicator oftechnology upgrading.