Dynamic comparative advantage:

One thing made cleara  by these alternatives  to the Heckscher-Ohlin theory is that a nation's  relative factor endowments may change over time. Industrial nations in Europe along with Japan have narrowed the  technological  gap vis- a-vis  the United  States after the Second World War.  Several developing countries now are quite capable of operating near the middle or even toward the beginning of the product life  cycle. This catching-up process evident  in  the real world  phenomena  necessitate viewing  of  comparative advantage in dynamic terms. This means  taking cognisance  of a nation's ability  to operate at different stages of  the product life  cycle due  to its continuing efforts  to develop a  pool of  human capital of skilled labour, scientists, and  innovators with managerial  and  engineering  talents.  It  is  in  this context, that the role of industrial  policy has been emphasised to  recognise the potential role of govemtnent in helping to shape and develop a nation's dynamic comparative advantage.