The Bank has played an important role, through its project lending, in enhancing borrowers' technological capabilities. It has helped borrowers to select appropriate and cost-effective technologies and to efficiently operate industrial facilities. This study by the Bank's Operations Evaluation Department assesses how the Bank's lending for industrial technology has affected industry in six countries: India, Indonesia, Hungary, Korea, Mexico, and Spain. Based on experience with projects in contrasting economic settings, the study assesses the determinants of industrial technology development and the suitability of government policies. Evaluation findings confirm the importance of incentives and of macroeconomic, trade, and industrial policies. In particular, judicious support by the public and private sectors is essential to stimulate research and innovation. Overall, the study emphasizes that efforts to build up capabilities for long-term industrial development need to address incentives, technological capabilities, and the role of institutions in a coherent way.