Capabilities Accumulation and Development: What History Tells the Theory

Development, catching up, and possibly forging ahead have to do with the technological, institutional, and policy dynamics associated with the great transformation—borrowing Karl Polanyi’s (1944) expression—leading from traditional, mostly rural economies to economies driven by industrial activities (and nowadays also advanced services), able to systematically learn how to implement and eventually how to generate new products and new ways of producing under conditions of dynamic increasing returns (Brandt and Rawski, 2008, use the same expression with reference to the Chinese miracle).