Technology Gap and Catching up in Economies Based on Natural Resources: The Case of Chile

Many developing countries have defined successful catching-up strategies based on knowledge and capabilities upgrading. However, this is a path dependent country-specific process that may turn more complex in economies based on natural resources (NR). This paper adopts a knowledge-based economy approach to analyze the key dimensions of catching up applied to the Chilean experience. Results allow us to identify development drivers and to derive policy implications that can be generalized to other catching-up economies. The main contribution is to show how openness and some physical production factors become basic determinants of convergence for NR-based countries due to foreign technologies and knowledge absorption opportunities, while national innovation capabilities and the unequal income distribution are still serious weaknesses.