at were originally founded on western invention, was based on what we are now coming to recognise as a capacity for 'creative imitation' (Drucker 1985; Rosenberg and Steinmueller 1988; Bolton 1993; Kim 1997). The success of creative imitators such as Matsu*censored*a has helped to direct renewed attention in the West towards long neglected elements of the innovative process, and their links with competitiveness (see Berger et al 1989). As Rosenberg and Steinmueller (1988) have pointed out, western thinking about the innovation process has tended to focus excessively on the activities of the upstream inventor at the expense of the downstream engineer. This tendency has been underpinned by a commercial culture that has "historically cast entrepreneurs and mavericks as virtual folk heroes" (Bolton 1993, p30), and undervalued the role played by teamwork and the cumulative power of numerous ideas for incremental improvement which have so often proved the decisive advantage of the successful imitator (Reich 1987, Kanter 1988). Creative imitation is an active learning process, backed up by well developed systems and processes for exploiting externally-developed knowledge (Bolton 1993). Cohen and Levinthal (1990, p131) refer to an organisation's ability to innovate through the acquisition and exploitation of new knowledge as its 'absorptive capacity'. The deeper and more diverse a firm's pre-existing knowledge structure, the greater is its absorptive capacity. In addition, superior absorptive capacity is a potentially difficult to imitate source of competitiveness because of its firm-specific and cumulative nature, and it can be continually enhanced as a by-product of the firm's research and development and other knowledge-gathering activities. Creative imitation and absorptive capacity are inherently connected with an emphasis on development rather than invention, and "a central theme in the study of the development process has been its integr...
