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Technological development in less developed countries has traditionally been a domain of economics. This fact has resulted in studies which address this issue at a macro-economic level. However, in order to come up with effective business and public policies, it is imperative to study the process of technological development at the firm-level. In this paper we study how technological development takes place in export-oriented manufacturing firms in less developed countries. Our study is based on detailed case analyses of three knitwear manufacturing firms in Pakistan. We identify a number of constraints and drivers associated with the actual process of technological …