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An examination of how small firms in developing countries acquire technological capability, the knowledge and skills required to operate technology effectively, and the ability to adapt it to local conditions. It aims to fill a gap in the established literature on technological capability, which has neglected the small scale sector in spite of the important role it plays in employment generation. The author develops a methodology for a quantitative assessment of the learning process, using case material from the small scale capital goods sector in Pakistan's Punjab Province. This work is aimed at departments of economics (development economics, industrial economics, economic theory) and development studies, international organizations, and consultancy bureaux.