How a timely policy contributes to technological capability building: insights from Iran’s biopharmaceutical sector

Building technological capabilities is influenced by different factors, notably policies. This paper explains the co-evolution of policies, i.e. policy tools, on the technological capabilities in Iran’s biopharmaceutical sector from 1995 to 2022. By adopting a qualitative research method, we gathered primary data through thirty-nine semi-structured as well as secondary data from reports and statistics. This paper explains technological capabilities enhancement from operational capabilities to innovative capabilities based on our proposed framework, which includes six levels. While the lack of an efficient policy tools, until the mid-2000s, was decisive in the inertia of biopharmaceutical sector capabilities, a proactive policy tools in recent years led to considerable promising results in terms of manufacturing and exporting advanced biosimilar products. Our findings shed light on the role of government support in the acceleration and directionality of technological capabilities building. Achieving advanced levels of technological capabilities requires learning, international collaboration, and export-oriented policies.