South-South technology transfer

Special Feature:
South-South Cooperation and
Market Mechanisms for Technology Transfer
South-South technology transfer
Facilitating market mechanisms
Dr. Vinish Kathuria
Associate Professor
SJM School of Management, Indian Institute of Technology Bombay
Powai, Mumbai-400 076, India
E-mail: [email protected]
Introduction
Abstract
The significance of technology transfer (TT) for economic development
cannot be overemphasized. TT has
two crucial components – appropriate acquisition of technology and its
widespread diffusion. For productivity growth, both these components
need to be adequately addressed.
The TT to developing countries
in the past has not addressed few
pertinent questions such as: a) their
technology needs; b) the requirements of appropriate technologies
to meet those needs; c) the capacity
building needed to ensure effective
transfer; and d) the factors affecting
adoption, assimilation, and adaptation of imported technology. Many of
these issues become less unwieldy
and get attenuated if technology is
transferred from same environment
as the recipient (e.g., South-toSouth) rather than from north (developed countries) to south countries.
This paper discusses various market
mechanisms and models of technology transfer that could be applied in
a South-South mode of technology
cooperation and transfer. The paper
then discusses the challenges and
opportunities for countries in the
Asia-Pacific region.
12
Tech Monitor
The significance of technology transfer
(TT) for economic development cannot be overemphasized. This is well
substantiated by historical evidence
and writings of well-known economists
starting with Marx, Schumpeter, Solow
etc. The historical evidence shows that
late starters, capitalizing on the inventions of the leader(s) have grown faster,
as there is an ‘advantage of backwardness’.1 England and France, the two
nations in which industrialization took
place first, grew at a rate of 1.2-1.4% per
annum, whereas Germany, Denmark,
Switzerland and USA had a growth rate
of 1.6-1.8%. These countries were followed by Norway, Sweden and Japan
with a growth rate of 2.1-2.8%. These
historical evidences were further reinforced by the examples of the erstwhile
USSR and the newly industrializing
countries (NICs) – Republic of Korea,
Taiwan province of China and Singapore – which grew at more than 4%
and 8% per annum respectively after
they capitalized on the inventions of the
already advanced nations (Kathuria,
2000). Sufficient literature also exists
suggesting that one of the key determinants of international differences in percapita income is barriers to technology
adoption Parente and Prescott, 1994).
Technology transfer has two crucial
components – the first is appropriate
acquisition of technology and the second is its widespread diffusion. Unless
both these components are adequately
The phrase was coined by Gershenkron
(1962: 8).
1 • May-Jun 2011
addressed, then only there is augmentation of productivity growth. According
to Jensen and Scheraga (1998), the
distinction between technology transfer
and diffusion is the distinction between
a supply orientation (i.e., ability and
willingness of supplier to supply) and
a demand orientation (i.e., willingness
and ability to receive). Significantly, the
pursuit of economic development does
not stop at diffusion itself. The producers
once learnt to use new technology or
processes, need to gradually improve it
and in the final stage they should come
up with their own technology, if they
have to leapfrog or grow faster.
From the above, two points emerge
clearly: a) TT is a process and choosing appropriate technology given the
resource endowment is the first crucial
step; and b) acquisition is only necessary condition, the sufficient condition
is the absorption of technology which
requires domestic firms to have their
own R&D agendas, and there should
be domestic research laboratories and
universities along with a sound base
of technical skills and human capital
(Maskus 2000).
In their earlier pursuits of TT, the developing countries focused primarily
on reducing what they considered the
excessive costs of technology transactions and the many restrictive clauses
imposed on recipients by the suppliers
(Kathuria, 2002a). Increasingly, focus
has shifted from the costs and characteristics of imported technologies to
include the factors affecting the creation
and maintenance of technological capabilities in the developing countries.
South-South Technology Transfer
Past evidence shows that the practices
of TT do not allow the recipient enterprises to accumulate such technological
capabilities. For example, in a study of
transfer of petrochemical technology to
Middle East, the U.S. Office of Technology Assessment concluded that although
the volume of technology transactions
had increased, ‘‘TTs (whereby recipient
gains improved capability to operate
an industrial facility) have been limited’’
(UNCSTD, 1991). Hill (1988) stated that
‘‘TT in Indonesia rarely moved beyond
production.’’ In some cases, however,
results are far more encouraging. For
instance, in the case of USIMINAS
steel plant in Brazil, it not only assimilated and adapted imported technology
successfully but also used the knowledge to generate and commercialize
new technologies (Dahlman and Fonseca, 1987).
A key constraint facing developing
countries is the difficulty of matching
their needs with appropriate technological solutions (Kathuria, 2002a). These
constraints are all-the-more binding
in new and emerging fields like nanotechnology, biotechnology, renewable
energies, where trends in technology
development are uncertain, secrecy
(as institutionalized by IPR) prevails,
and sources of supply is not restricted
to one industrial branch.
In a nutshell, the TT to developing countries has not addressed a few pertinent
questions such as: a) the type of needs
of a developing country; b) the requirements of appropriate or better technologies to meet those needs; c) the available expertise, i.e., the capacity building
needed to ensure effective transfer;
and d) the factors affecting adoption, assimilation, and adaptation of imported
technology. These issues are relevant
as the origin of technology is from
countries which are labour scarce, thus
have high capital-labour ratio, but are
sold to countries having low capitallabour ratio.
2 Refer Kathuria (2000) for some data on this
ownership of technology.
Active
Passive
Formal
FDI (Hyundai, Honda);
Turnkey Project, Collaboration
(Fiat Palio); Mgmt.
Contract, JV (Maruti-Suzuki);
Licensing (Piaggio-LML)
Machinery Purchase
(For Narmada Dam-Tubines
from Mitsubishi Corpn.)
Informal
Imitation (Reverse Engg) (MT
industry–Ludhiana or Silicon Valley); Learning by Export (CNC
Control System or CNC M/c Tools)
Trade Journals, Visits, Scientific Exchange (People trained in
MNCs), Trade Fairs (Hanover auto
fair, Auto expo, IMTEX)
Table 1. Different channels of technology transfer
Source: Kathuria, 2000
Many of these issues will become
redundant or may get attenuated if
technology is transferred from same
environment as the recipient (e.g.,
South-to-South) rather than from
north (developed countries) to south
countries. Under this backdrop, this
paper discusses various market
mechanisms and models of technology transfer that could be applied in a
South-South mode of technology cooperation and transfer. The paper
then discusses the challenges and
opportunities for countries in the AsiaPacific region.
The scheme of the paper is as follows:
Section 2 looks into different channels
of technology transfer involving market.
Section 3 looks into what are the market failures and concerns in technology
transfer. Section 4 gives some suggested policy rules of thumb to enhance
south-south technology transfer looking
into different stages of development of
the countries. The paper concludes with
section 5.
Channels of technology
transfer
There are several channels – both
market mediated and non-market mediated – through which technology can
be transferred (Table 1). Before looking
into the various channels, it is instructive to know who owns the technology.
Sufficient data exists suggesting that
multinational corporations (MNCs) produce, own and control the bulk of the
world’s modern technology.2 Foreign
direct investment and licensing are
the two prominent channels where the
MNCs play a direct and active role in
technology transfer. There are channels like exhibitions, trade fairs or scientific exchange of people where the
role of MNCs is not only indirect but
also passive. Fransman (1985) argues
that even if they don’t play a direct and
active role in dissemination of technology, their indirect and passive role is
sufficient so as to conclude that much
of the international transfer of diffusion
of technology is connected to FDI.
Table 1 illustrates this connection and
the various roles of MNCs leading to
the transfer of technology.
From Table 1, it is clear that not all
the channels of technology transfer
are market-mediated. Channels in the
North-West corner (and also goods
purchase in North-east corner), where
there are formal contracts and direct involvement of foreign firms are the ones
for which market exists. For channels
like imitation, scientific exchange, exhibitions etc. there does not exist any
functioning market.
The diffusion of technology however
takes place through demonstration
effect, competition and spillovers –
whose conduits are labour turnover,
and horizontal and vertical linkages.
The development of Indian machine
tool industry and Silicon Valley are two
such examples demonstrating the role
of these conduits. Lall (1980) has documented the evidence of vertical linkages
created by two Indian automobile truck
manufacturers by Ashok-Leyland and
Tata in 1970s.
Tech Monitor
• May-Jun 2011
13
South-South Technology Transfer
The remaining section discusses three
of the key channels in details: through
trade in goods, through foreign direct
investment and licensing and through
movement of people.
Technology transfer through goods/products
New products often embody new ideas
and innovations and when these products are traded internationally, they
transmit knowledge across borders.
The process of knowledge transmission
however is not straight forward. Trade
facilitates only access – access to both
products as well as new machinery and
equipment. The local firms have to do
reverse engineering if they have to benefit from this channel, which depends on
the skill content of the labour and local
absorptive capacity (Kathuria, 1999).
The development of Indian pharmaceutical industry and machine tool industry
in Ludhiana (India), and diesel cluster in
Rajkot (India) are few such examples,
where reverse engineering was carried
out and the local skilled labour and absorptive capacity was made use of.
Technology transfer through
Foreign Direct Investment (FDI)
cent evidence). Moran (2004) argues
that nature of operating characteristics
of subsidiaries determines the impact
on the local economy. Subsidiaries
integrated into the international sourcing networks of the parent MNCs have
a more positive impact on the host
country, often accompanied by vertical
backward linkages and externalities. Affiliates which are isolated tend to have a
less positive, and sometimes negative,
impact on the local economy (Hoekman
et al. 2005).
On a more positive note, these foreign
affiliates typically transfer technology
to local suppliers. Mexico’s maquiladora sector is a recent example of
vertical TT. Most maquiladoras began
as subsidiaries of US firms that shifted
labour-intensive assembly operations
to Mexico. However, over time, the maquiladoras adopted more sophisticated
imported production techniques (Saggi,
2002). Larrain et al. (2000) in their case
study of the effects of Intel’s investment
in Costa Rica found that local suppliers benefited substantially from Intel’s
investment. On the other hand, Ivarsson
and Alvstam (2004) using firm level data
of 64 suppliers to Volvo India for their
truck manufacturing find that relatively
small number of international followersupplier have captured a dominant part
of Volvo’s purchase of components. This
implies that there are less opportunities
for domestic suppliers to forge links with
Volvo. The same study in its survey of
13 Indian suppliers yields that domestic
suppliers seem to enhance their internal capabilities from the technical assistance given by Volvo as part of business
relation.
FDI is the most contested and simultaneously most sought after channel of
technology transfer as technology is accompanied by investment, managerial
know-how and spillovers.3 The choice of
FDI or licensing for TT depends on the
confidence of licensor firms that proprietary technologies will not leak into the
host economy through copying or labour
turnover. If this is expected, foreign firms
may prefer FDI and may not engage in
licensing at all, or may transfer vintage
technologies (Maskus, 2000).
Technology transfer through
labour turnover
The empirical evidence on spillovers impact from technology transfer through
FDI is mixed (see Kathuria 2010 for re-
Labour turnover can be an important
channel for technology transfer and
technology diffusion. In fact the ability of
The most interesting example of this spread of managerial know-how is wide-spread diffusion
of several Japanese management concepts like Just-in-time (JIT), Quality Circles (QC), Quality
Assurance (QA), Total preventive maintenance (TPM) etc. after mid-1980s (Kathuria, 2001). Even
though only a few Japanese automobile joint ventures were permitted in mid-1980s, many of the
Indian firms, who may have not gone for any TT, have imbibed and internalized them.
3 14
Tech Monitor
• May-Jun 2011
local firms to absorb new technologies
is contingent on the fact whether there is
a labour turnover. Not only new technologies are diffused faster, the productivity of local firms also increases through
this turnover. This is because the value
addition of MNC trained worker is much
higher if (s)he works for a local firm than
for the foreign firm as (s)he is one among
many in the MNCs. The development
of Indian machine tool industry is one
such example where employees trained
in the Hindustan Machine Tools, which
had over 60 foreign collaborations for
technology transfer for wide variety of
machine tools, later on started their own
units and became market leaders for
respective product segments (Kathuria,
1999). The study found that the people
trained in HMT are now working with
ACE Designers, Batliboi, Mysore Kirloskar Ltd. etc. Other prominent examples
of this technology diffusion are in chip
industry. Intel is a spin-off of Fairchild
and AMD is a spin-off of Intel.
Concerns in technology
transfer
Despite functioning markets for various
channels of technology transfer, there
are several market failures within which
international TT takes place.
The two important market failures of
international technology transfer as
highlighted in the literature are: a) imperfections and asymmetries in the
market for technology, as the technology is owned by few large firms only;
and b) the monopolistic advantages of
MNCs, as they have substantial market
power resulting from lead time and IPR
(UNCTAD 1994, Hoekman et al., 2005).
The implication of these market failures
is weak bargaining power of host countries (UNCTAD 1994) resulting in large
transaction costs for acquiring technology and reduced technology transfer.
The externalities - the costs and benefits of TT not being internalized by
participants - are another recognized
market failure problem. It is well recognized now that a major share of benefits
South-South Technology Transfer
to recipient countries of TT is likely to
arise from uncompensated spillovers,
wherein technological (as well as managerial) information is diffused into the
economy and the technology provider
cannot extract the associated economic
value (Kathuria, 2002b). The example
given in footnote 3 is instructive of such
externality.
Of late a few new concerns have also
emerged. For example, MNCs now
primarily resort to M&A rather than
investing in Greenfield ventures. This
precludes any possibility of capital formation and technology transfer. The
data indicates that nearly 40-50% FDI
in India during 1995-1999 came through
M&A (Kumar, 2000). Another concern
irrespective of the origin of technology
is that the import of technology may
reduce the R&D efforts of local firms.
This is because R&D is a costly and an
uncertain activity with gestational lag,
and in order to remain competitive, the
local firms may procure technology from
outside rather than invest in their own
R&D (Kathuria, 2008; and Sasidharan
and Kathuria, 2011).
Another major concern is non-creation
of capabilities as and when inappropriate technology is transferred. Type of
capabilities acquired will be determined
by the content of TT. There are three
types of technological flow through TT:
a) flow of engineering, managerial service and capital goods; b) flow of skill,
and know-how for operations and maintenance; and c) flow of knowledge, expertise, and experience for generating
and managing technical change.
The technology transfer without generation of capabilities may still happen even if technology flows from
South-to-South. The example in Box 1
demonstrates how technology transferred from China to Liberia failed to
generate sufficient capabilities. From
the case, we can see the concerns
even in South-to-South technology
transfer.
Based on the case, it can be concluded that South-to-South cooperation is
South-South TT – China’s Kpatawee
Rice Project in Liberia
Buoyed by the experiences of over 20 rice projects in different African nations,
Kpatawee Farm was developed during 1978-89 by the People’s Republic of
China as a state-owned rice seed plantation in rural Liberia.
There are both similarities and differences in the rice-growing environment
in Liberia and China. In both countries, irrigable land is limited by hilly topography, heavy reliance on seasonal rainfall, and drought affects even gravity
and pump irrigation. Among key differences between the two environments:
while China is a densely populated country with low labour costs, labour in
Liberia is limited in relation to land (one person for every two hectares of arable
land in Liberia against 20 persons in China). Labour costs are consequently
high. Liberia has almost no irrigation infrastructure and the marketing and
input delivery system is undeveloped. In China, these elements have been
in place for centuries.
The technical choices of the Chinese in their Liberian agricultural assistance
projects were choices based on China’s own domestic rural experiences:
construction of effective irrigation systems where water sources exist and
rain-fed systems in other areas; agricultural mechanization; and improved
seeds, techniques, and management practices.
For the Kpelle farmers who lived close to the Kpatawee Valley, and who continued to farm its hills using slash and bum techniques, the Chinese methods
of tractorized cultivation, and neat, irrigated rice paddies, appeared as exotic
transplants, having little to do with Liberian farming. They often watched the
Chinese struggle with the valley, while they struggled with the hills.
Just as local farmers had little connection with Kpatawee, so also Kpatawee
had with other institutions in Liberia. Although Liberia’s Rural Development
Institute (RDI), a post secondary training center, was located close to Kpatawee, no RDI students served as apprentices in the farm, and few were
even aware of exactly what the farm was doing 12 miles away.
The technical constraints to agricultural production in Liberia centered
on the relation between land and labour. Green Revolution technologies,
the improved, high-yielding varieties in particular, were developed in Asia
to fit local conditions of increasingly scarce land and increasingly abundant inputs such as labour and chemical fertilizers. But in Africa, resource
scarcities are the reverse image of Asia: labour is generally the limiting
factor, not land.
Technical change appropriate for Africa involves increasing labour productivity, especially during bottleneck periods: land clearing and land preparation,
transplanting, weeding and harvest.
The approach failed because the farm was overstaffed and over-mechanized,
and the Chinese were unable to develop techniques to allow continuous cropping on the upland areas, while the more profitable irrigated area was too
small to subsidize the losses on the upland. Besides, the Chinese focused
on yields per unit of land, and did not provide the Liberian government with
any estimates of the costs involved in production.
Box 1: An example of South-South Technology Transfer
Source: Brautigam, 1993
Tech Monitor
• May-Jun 2011
15
South-South Technology Transfer
also not without problems. The technical cooperation between them may also
throw unexpected problems unless existing needs and capabilities are not
looked into. In that scenario, the cost
of technology transfer depends on not
who is transferring whom but upon the
cultural distance4 between the transferring and receiving parties, apart from
the nature of the technology (Jensen
and Scheraga, 1998). Kedia and Bhagat
(1998) argue that technology transfer
is more readily accomplished in individualistic and masculine cultures and
cultures that have similar attitudes towards uncertainty and risk avoidance.
However, the technologies that disrupt
the existing distribution of power, status
and rewards are opposed. The significance of cultural distance increases if
moved from product-embodied technology to process-embodied and personembodied technology (Jensen and
Scheraga, 1998).
Different researchers have given different criteria for transferring appropriate technology. For example, Wicklein
(1998) has suggested seven criteria
for designing appropriate technology
in developing countries. These include:
a) systems independence: the technology transferred should function
without elaborate supporting devices
or infrastructure; b) image of modernity: the technology in question should
not patronize, rather promote the receiver’s social status; c) individual vs.
collective technology: the technology
must reflect the degree of collectivism,
as high collectivist reflects the technology is system-dependent; d) cost:
the complete transferred technology
must be locally affordable; e) risk factor:
the technology should be appropriate
to the user’s environment and also
adaptive to the environment; f) evolutionary nature: the transferred technology must possess characteristics
Fig. 1. Different types of countries in Asia-Pacific
allowing its further development; g)
single purpose vs. multi purpose: this
will have implication on the range of
skills required to propagate technology’s functionality.
Grundy 5 (1991) based on his project
of distributing solar cookers in Lesotho
has proposed five criteria that would
ensure acceptability of a technology.
These are: inexpensiveness, ease of
use, environmental concerns, openness to new ideas, and susceptibility
to advertising. Scheraga et al. (2000)
based on their experience with distributing solar cooker in Haiti gave a new
framework of technology transfer that
highlight the vital role of ‘lead users’ concept of von Hippele specially in contexts
where cross-cultural factors play an instrumental role.
Suggestive mechanism
and policy rules
The different market failures and concerns mentioned and several design
criteria given above for effective technology transfer suggest two things: a)
4 The relevance of cultural distance becomes clearer from a recent study by Kumaraswamy et
al. (2002), which finds that of the 10 perceived barriers to technology transfer in Hong Kong
construction joint ventures, the organisational cultural barrier occupies the top spot with 92% of
the 36 respondents either agreeing or strongly agreeing to this.
As referred in Scheragaet al. (2000).
5 16
Tech Monitor
• May-Jun 2011
there is a need for policies; and b) policies need to be framed keeping the level
of development of the countries. The
policies can be general that look into
the human capital and overall R&D in
the country and should satisfy following
four objectives: (1) ensuring increased
access to the available technology; (2)
reducing the costs of acquiring and
absorbing existing technologies; (3)
increasing incentives for domestic innovation (Hoekman et al., 2005); and
(4) ascertaining that technology transfer enhances the capabilities of local
firms. Earlier efforts of the government
were aimed at merely reducing the
cost of technology transfer and for that
government intervention included information control, funding and regulation
(Godkin, 1988).
Asia-pacific region has 22 countries (29
if we include South Asia) with wide variation in their development level and per
capita income. To one extreme, there
are countries like Australia, Japan, Singapore, Hong Kong (China), having a
per capita income of over 30,000 US
$ and other extreme has countries like
Laos, Cambodia, Myanmar, East Timor
having per capita income of less than $
1000. Based on their per capita income,
the countries can be divided into four
types: low income (type 1), lower-middle
South-South Technology Transfer
Types of
countries
General technology policies
Mechanism for technology transfer
FDI
Licensing
Trade in
goods
Movement of
persons
Scientific
exchanges
1. Low-income
countries
Basic Education,
improving infrastructure
Discriminatory
with FDI only
from 1 and 2
Improving
information flows
about public
domain & mature
technologies
Open access
Incentives for
education in type
2 & 3 countries
From type 1 & 2
countries
2. Lower-middle
income countries
Secondary and
tertiary education, R&D support
policies, improving
infrastructure
Discrimin-atory
with FDI only
from 2 and 3
Improving
information flows
about mature
and public
domain technologies, incentives
for licensing from
type 2 and 3
Open access
Incentives for education in group
3 countries
From type 2 & 3
countries
3. Middle-upper
income countries
Tertiary education, R&D support
policies, improving
infrastructure
Upstream supplier support
program
Incentives for
licensing from
type 3 and 4
Open access
Encouraging
two-way
mobility
Encouraging
two-way
mobility
4. Upper-income countries
R&D support
policies, Improving
infrastructure
Non-discriminatory investment
promotion
No active policy
Open access
Encouraging
two-way mobility
Encouraging
two-way mobility
Table 2. List of policies for enhancing technology transfer
Source: Adapted from Hoekman et al. (2005)
income (type 2), middle-upper income
(type 3) and upper income countries
(type 4) (Figure 1). The best way countries at the lower level (type 1 or type 2)
can benefit is by acquiring technologies
from countries with similar or slightly
above their development level (i.e., from
type 2 or type 3 respectively). Even the
general policies that build human capital base or support R&D programs can
be different depending upon the type of
country. Table 2 gives list of some of the
policies for four types of countries.
It can be seen from the table that type
1 and 2 countries can use discriminatory FDI depending upon their resource
endowment and from where they are
getting FDI. The capital-labour ratio of
the home country should not be very
different than that of the recipient. Similarly, the support for licensing should be
for mature and technologies which are
already in public domain. A big factor
for technology absorption is the base
for human capital. One way to enhance
human capital base is encouraging
policies (through fellowships) for education in countries which are a notch
above. The example of Nepalese students studying in India is an example
of building this human capital. One factor that would go in favour of countries
lagging behind is their high population
density.6 This would facilitate faster diffusion.
capabilities and dynamic learning capabilities. On the other hand, at macro
level, the TT, besides leading to application of a particular technological solution to a particular problem, should also
enhance capabilities so as to assess the
need, select, import, assimilate, adapt
and develop appropriate technologies
(Kathuria, 2002a).
Though it is beyond the scope of the
present article, one can do a need mapping for a country, i.e., for which kind
of industries should FDI be sought
and from which type of country so that
countries can grow faster. This would
ensure smoother and better transfer of
technology and faster enhancement of
technological capabilities.
Technology consists not only of hardware, such as machinery, but of software, ways of organizing production.
Moreover the transfer process is complex, as neither the process for transferring technology nor the technology
itself is homogeneous. The case of rice
cultivation in Liberia by China clearly reflects this as the transferring of Chinese
technologies and establishing a model
state farm clearly did not work well for
Liberia.One of the lessons from the failure is recognition of the fact that the
receiver’s environment – physical and
social - is different and has to be kept in
mind for successful technology transfer.
In this context, it is important to mention
Conclusion
The technology transfer has implication for both – at firm level and at macro
level. At firm level, the TT should not
only lead to increase in technological
capabilities of receiver but also increase
in investment capabilities, operational
Tech Monitor
• May-Jun 2011
17
South-South Technology Transfer
that two regions despite having same
level of education can differ greatly in
emphasizing the barriers to technology
transfer. For example, a study looking
into medical technology transfer finds
poor awareness and surgical and follow up costs as key barriers in Nigeria
against illiteracy and opportunity costs
in Nepal – despite not much difference
in literacy rates between the two countries (67% in Nigeria against 57% in
Nepal) (Williams, 2008).
A Bookof Essays, Cambridge: Harvard
University Press.
It has been increasingly felt that in today’s global market place, traditional
sources of competitive advantage –
economies of scale, low factor cost,
and proprietary technology – cannot
give sustained competitive advantage
(Pucik, 1991). The only factor that can
give sustainable advantage is the ‘learning capacity’ of the organization. Firms
that master new competencies more
quickly than others will obtain greater
benefits from technology transfer (Jensen and Scheraga, 1998). This building of
capabilities can be done faster if technology is transferred from countries
which are slightly above but not having
significant technology lead vis-à-vis the
recipient country.
Hill, H. (1988), Foreign Investment and
Industrialization in Indonesia, Oxford
University, Singapore.
References
Brautigam, D. (1993), “South-South
Technology Transfer: The Case of China’s Kpatawee Rice Project in Liberia”,
World Development, Vol. 21(12), pp.
1989-2001.
Dahlman, C.J. and F.V. Fonseca (1987),
“From technological dependence to
technological development: The case of
the USIMINAS Steel Plant in Brazil”, in:
J.M. Katz (Ed.), Technology Generation
in Latin American Manufacturing Industries, St. Martin’s Press, New York, pp.
154-182.
Fransman, M (1985), ‘Conceptualising
Technical Change in the Third World
in the 1980s: An Interpretive Survey’,
Journal of Development Studies, Vol.
21, pp. 572-652.
Gerschenkron A. (1962), Economic
Backwardness in Historical Perspective:
18
Tech Monitor
Godkin, L. (1988), “Problems and practicalities of Technology Transfer: A survey
of the literature” International Journal
of Technology Management, Vol. 3(5),
pp. 587-603.
Grundy, W. (1991), Solar Cookers
and social classes in Southern Africa
(www.stanford.edu/group/STS/techne2.
shtml).
Hoekman B.M., K.E. Maskus and K.
Saggi (2005), “Transfer of Technology
to Developing Countries: Unilateral and
Multilateral Policy Options”, World Development, Vol. 33(10), pp. 1587-1602.
Ivarsson, I. and C-G. Alvstam (2004), “International Technology Transfer Through
Local Business Linkages: The Case of
Volvo Trucks and Their Domestic Suppliers in India”, Oxford Development Studies, Vol. 32(2), pp. 241-60.
Jensen O.W. and C.A. Scheraga (1998),
“Transferring technology: costs and
benefits”, Technology in Society, Vol.
20(1), pp. 99-112.
Kathuria, V. (1999), “Role of Externalities
in Inducing Technical Change – A Case
Study of Indian Machine Tool Industry”,
Technological Forecasting and Social
Change, Vol. 61(1), pp. 25-44.
Kathuria, V. (2000), Technology transfer, productivity spillovers and technical
change—a study of Indian manufacturing industry, Unpublished Ph.D., Thesis,
Indira Gandhi Institute of Development
Research, Mumbai.
Kathuria, V. (2001), “Foreign Firms,
Technology Transfer and Knowledge
Spillovers to Indian Manufacturing Firms
– A Stochastic Frontier Analysis”, Applied Economics, Vol. 33(5), pp. 625-42.
Kathuria, V. (2002a), “Technology Transfer for GHG Reduction – A Framework
with Application to India”, Technological
Forecasting and Social Change, Vol.
69(4), pp. 405-30
• May-Jun 2011
Kathuria, V. (2002b), “Liberalisation,
FDI and productivity spillovers—
an analysis of Indian manufacturing
firms”, Oxford Economic Papers, Vol. 54,
pp. 688-718.
Kathuria, V. (2008), “The impact of FDI
inflows on R&D investment by medium
and high-tech firms in India in the postreforms period”, Transnational Corporations, Vol. 17(2), pp. 45-66.
Kathuria, V. (2010), “Does the Technology-gap influence Spillovers? – A postliberalisation analysis of Indian Manufacturing Industries”, Oxford Development
Studies, Vol. 38(2), pp. 145-70.
Kedia, B.L. and R.S. Bhagat (1998),
“Cultural constraints on transfer of
technology across nations: implications for research in international and
comparative management, Academic
Management Review, Vol. 13(4), pp.
559-71.
Kumar, N. (2000), “Multinational enterprises and M&A in India: patterns and
implications”, Economic and Political
Weekly, Vol. 35, pp. 2851-58.
Kumaraswamy, M.M., E.L.C. Van Egmond and M.M. Rahman (2002),
Prospects for propelling contractor
development through technology exchange, paper presented in TTI 2002
Conference: Competing in the Knowledge Economy, July 10-12, Birmingham, the UK.
Larrain, B. F., L.F. Lopez-Calva and
A. Rodriguez-Clare (2000), Intel: A
case study of FDI in Central America,
CID Working Paper No. 58, Harvard
University.
Lall, S. (1980), “Vertical inter-firm linkages in LDCs: an empirical study”, Oxford
Bulletin of Economics and Statistics,
Vol. 42, pp. 203-26.
Maskus, K. E. (2000), Intellectual property rights in the global economy, Washington, DC: Institute for International
Economics.
Moran, T. (2004), “How does foreign
direct investment affect host country
development: Do we already know the
South-South Technology Transfer
answer? Using industry case studies
to make reliable generalizations”, In
M. Blomstrom, E. M. Graham, & T. Moran (Eds.), The impact of foreign direct
investment on development. Washington, DC: Institute for International
Economics.
Saggi, K. (2002), “Trade, foreign direct
investment, and international technology transfer: A survey”, World Bank
Research Observer, Vol. 17(Fall), pp.
191–235.
Parente, S. L., and E.C. Prescott (1994),
“Barriers to technology adoption and development”, Journal of Political Economy, Vol. 102(2), pp. 298–321.
Sasidharan, S. and V. Kathuria
(2011), “Foreign Direct Investment &
R&D: Substitutes or Complements –
A case of Indian manufacturing after
1991 reforms”, World Development
(in press).
Pucik, V. (1991), “Technology Transfer in
strategic alliances: Competitive collaboration and organizational learning” in Agmon and Von Glinow (eds.), Technology
Transfer in international business, New
York: Oxford University Press.
Scheraga, C.A., W. M. Tellis and
M.T. Tucker (2000), “Lead users and
technology transfer to less-developed
countries: analysis, with an application
to Haiti”, Technology in Society, Vol. 22,
pp. 415-25.
UNCSTD (1991), Environmentally
Sound Technology Assessment, United
Nations Centre for Science and Technology for Development, New York.
UNCTAD (1994), Major issues arising from the transfer of technology,
UNCTAD, Geneva, United Nations.
Wicklein R.C. (1998), “Designing for
appropriate technology in developing
countries”, Technology in Society, Vol.
20(3), pp. 371-75.
Williams L.D.A. (2008), “Medical
technology transfer for sustainable
development: A case study of intraocular lens replacement to correct cataracts”, Technology in Society, Vol. 30,
pp. 170-83. o
Global Innovation Index 2011
INSEAD, the leading international business school, announced the findings of The Global Innovation Index (GII) 2011
edition. Switzerland topped this year’s GII ranking, gaining three spots from its position in last year’s GII. Sweden and
Singapore follow in the 2nd and 3rd positions, respectively. Joining INSEAD as Knowledge Partners for the report
were Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry (CII), and the World Intellectual Property
Organization (WIPO), a specialized agency of the United Nations.
This year’s rankings show that innovation has become a global phenomenon with six European economies (including Finland 5th, Denmark 6th, the Netherlands 9th and the United Kingdom 10th), two Asian (including Hong Kong,
SAR, China 4th) and two North American economies (the United States 7th and Canada 8th) in the top 10.The top ten
economies in the GII 2011 ranking are:Switzerland, Sweden, Singapore, Honk Kong (SAR), Finland, Denmark, United
States, Canada, Netherlands and United Kindgom
The GII includes 16 economies from the Middle East and North Africa, of which two—Israel (14th) and Qatar (26th)—
are ranked among the top 30; both high-income economies. Among Sub-Saharan African economies, Mauritius (53rd
overall) achieves the top regional spot while South Africa (59th) is the runner-up. Ghana comes next at position 70,
and ranked first among economies classified as low-income, all regions combined.
Of the four economies from South Asia in the GII, India is ranked 62nd overall, followed by Sri Lanka (82nd), Bangladesh
(97th), and Pakistan (105th). From East Asia and the Pacific, besides the leading positions of Singapore (3rd) and Hong
Kong (SAR, China, 4th), five more are in the top 30: New Zealand (15th), the Republic of Korea (16th), Japan (20th),
Australia (21st), and China (29th), the top-ranked emerging economy.
The Global Innovation Index is computed as an average of the scores across inputs pillars (describing the enabling
environment for innovation) and output pillars (measuring actual achievements in innovation). Five pillars constitute
the Innovation Input Sub-Index: ‘Institutions,’ ‘Human capital and research,’ ‘Infrastructure’, ‘Market sophistication’ and
‘Business sophistication’. The Innovation Output Sub-Index is composed of two pillars: ‘Scientific outputs’ and ‘Creative
outputs’. The Innovation Efficiency Index, calculated as the ratio of the two Sub-Indices, examines how economies
leverage their enabling environments to stimulate innovation results.
For further information, contact:
Media Relations Section
World Intellectual Property Organization
34, chemin des Colombettes, CH-1211 Geneva 20, Switzerland
Tel: (+41 22) 338 81 61 or 338 95 47; Fax: (+41 22) 338 82 80; Web: http://www.wipo.int
Tech Monitor
• May-Jun 2011
19