Technological Innovation Promotes Industrial Upgrading: An Analytical Framework

Industrial upgrading driven by technological innovation follows the LASIS process, that is, technological innovation promotes industrial gradual upgrading through the leading-in of new technologies, architectural innovation, standardization, integration innovation, and paradigm shift. At different stages of technological innovation, there are different internal mechanisms for industrial upgrading. New technology and new products are introduced in the stage of leading-in. Architectural innovation mainly establishes dominant technology and products through design competition to form technical barriers. In the stage of two-way recursive standardization, industrial upgrading is promoted through four intermediate variables: cost saving, value chain upgrading, economies of scale, economies of scope and modularization, and technology diffusion. In the stage of integration innovation, industrial upgrading is driven by diffusive fusion innovation, absorptive fusion innovation, technology crossing integration innovation, and intra-industry technology integration innovation. The stage of paradigm shift is mainly the substitution of the new paradigm for the old one.