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by Namiz Musafer

In 1875, nearly 90% of all energy utilised in the countries, now considered as developed countries, came from the muscles of humans and animals. Except in textiles, coal mining and railways, the world stage was empty of the technological actors who were to occupy it in the following years.

Hightech - symbol of modernity

However, the technologies that later developed in these countries spread to lesser developed countries and have now become common technological inheritance across the world. In today's context transfer of technology, by default, makes synonyms with imitating the industrial growth patterns of the developed countries that enhanced their economies through mechanisation and mass production.

Development of technologies by the newly developed countries (NDC) was based upon domestic efforts to imitate, adapt, develop and create technology. They, thereby, succeeded in creating the national capacity to master and develop modern technologies. This mastery relied to a significant level on the transfer of technology from the so called developed countries.

As industries in the developing countries grew, mostly by aping the developed countries, it was necessary for them to adopt policies for their own autonomous growth. The US, Germany, the Scandinavian and Central European countries and followed such a path of independent growth in the long recession from 1872 to 1894. Similarly, in the great depression 1929 - 1939, Japan and the Soviet Union had achieved autonomous industrial growth. It was important that the developing countries now explore all possibilities of such autonomous developments for themselves, supported by collective co-operation among them.

In the contemporary world, we see globalisation and liberalisations marking a new phase with a lot of transborder transactions. While the developed nations pump more and more investments to research and development activities, the developing nations seek technologies developed by such nations to advance their own countries. National economic boundaries are fast breaking down and all countries are looking for their competitive edges.

Due to lack of experience, technical know-how, advanced facilities and the finances, as well as being in a low bargaining position in the world trade, the developing countries are lagging behind the developed nations to invent their own technologies in this competing world. The level of education and access to established markets and finance are some other limiting factors the developing countries face. Therefore, so as to save time, efforts and money and to conveniently acquire well proven technology, the best alternative to any country, where they are not currently good at, would be to trade the technology in the form of 'Transfer of Technology'.

'Transfer of technology' is a frequently used term in the context of industrial development of any country. Although the literate on this subject is voluminous, we don't find a full agreement on the definitions of this term. A widely accepted definition is, "the stock of knowledge that can be used in changing existing reality".

Technological developments have accelerated in an unprecedented fashion during the last few decades. These changes are affecting the pace patterns of technology transfer to developing countries to promote them to search for novel approaches in setting their development and international trade objectives. These changes also help to evolve imaginative institutional modalities for building up technological capacities and facing the new challenges in trade and development.

However, it is not only the nature and the appropriateness of the technology that decides from where technologies are taken. In a world of inter-dependence, often the global political settings have a key role to play in the transfer of technology. For example, Sri Lanka, a significant player in the Non-Aligned movements, in the days of the Cold War period, transferred high technologies particularly from the communist countries. Sri Lanka went for mass production with heavy equipment with nationalising most of the industries or by setting up new industrial ventures.

The successful achievement of the desired industrial development depends to a considerable extent of the effective development and transfer of technology. This must be carefully regulated to ensure that it provides the impetus for sustainable growth.

Transferred technologies are not, of course, a cure all. The acquirer cannot expect to obtain technological benefit in every transfer, given the competition in the world economy. In some cases, conventional technology may be used that is of limited impact for the technological development of that particular acquirer.

Also, policies and instruments that have proved advantageous in one country may be difficult to apply in others. Business culture differs from one county to another and so does the approach of enterprises towards technology acquisition. A good example is the automobile industry in Japan. They transferred technology from the US and Europe in the 50s and 60s.

They had their own technologies, yet they adopted the technology coupling with innovations to suit the world needs, particularly the petroleum crisis in the 70s by introducing fuel efficient vehicles.

In a different type of an example, in Sri Lanka, the handloom industry has a history dating back to the period of the arrival of Prince Vijaya, when he encountered Kuveni spinning cotton. The handloom industry flourished in the country mainly as a small scale and medium scale industry. Yet, with the introduction of the liberalisation policies when the doors of the global garment industry was opened to Sri Lanka, it did not base itself on the indigenous handloom industry, but aligned itself more with the global market trends.

It is therefore essential to evaluate which technology to be acquired to suit the requirements. It must ensure that the final product is marketable either locally, internationally or both. Factors like cost, intellectual property rights cover, obsolescence, safety and environmental protection, dependence for raw material and catalysts, rate of technological change, potential for employment etc.. are to be considered before deciding what technologies to be acquired.

In any case, it is important to ensure that the technology most appropriate to local conditions is adopted. The technology applied to another project must be compatible with locally available inputs and with the present and projected demands. The most advanced and sophisticated technology sector may not be the most appropriate technology: less sophisticated techniques that rely on indigenous factor inputs and skills may better serve the national interest. This is an essential feature that Sri Lanka should consider, especially in the wake of the support extended to industrialisation through the current economic revival efforts.

Industries that draw heavily on local inputs have a higher potential of creating a sustainable chain of employment generation and industrial growth at different levels than the industries that import most of their inputs.

Transfer of technology can be a very complicated process requiring expertise in various areas which include: technology, information sourcing and processing, project financing, contract negotiation, environment aspects and product marketing. Enterprises willing to upgrade their technology usually have some expertise in all or most of the above mentioned areas and can easily navigate through the transfer processes.

Technology suppliers are often expected to provide, apart from technology, feasibility and market studies, invest in the project and buy-back the manufactured product. Many enterprises tend to explore any opportunity for international co-operation and contact numerous technology suppliers in an attempt to find one that meets their high expectations. Therefore, transfers with mere intention of selling their technologies by the foreigners should always be discouraged.

A highly intensive scrutinisation has to be done before deciding what technologies and from whom the technology should be obtained. Past experience and the transferor's repute are two important factors to be considered in addition to the technology itself. The acquirer has to study the whole process into the depth with a very wide perspective. This decision is vital in every aspect of the technology transfer.

Sri Lanka being a developing country needs technology for industrial growth. We already have our indigenous technologies. There are some technologies already transferred from abroad. In addition, we do our own research and development though our own institutions. Therefore, these strengths need to be considered and built on in the transfer of technology. Transferring of technology from abroad is only an option, but it gives immense results if we can make the right choices.

(The writer is Project Manager Intermediate Technology Development Group (ITDG) - South Asia)

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