Abstract

As Sanjaya Lall was acutely aware, the ability to sustain income growth depends on the development of dynamic capabilities and the capacity to generate and appropriate innovation rents. This has often been conflated with the deepening of industrialisation, including by Sanjaya himself. But, with the extraordinarily rapid and
global growth of Chinese manufacturing, there is no longer a simple one-to-one relationship between industrial development and sustainable income growth. In this
paper, we will show that Sanjaya’s many contributions provided the key to the promotion of a suitable response to this Asian challenge, but that he was mistaken in
his conflation of industrialisation with the building of technological capabilities.