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The Financial Express

Technology transfer for economic development

M Jalal Hussain | Published: May 02, 2016 17:51:12 | Updated: October 24, 2017 00:20:58


Technology transfer for economic development
Technology and innovation in the fields of industry, trade and commerce have made a significant headway in many developed and developing countries. Some have acquired state-of-the-art technologies either through research and development (R & D) or from other countries. Improving living conditions and productivity levels of the people in a country is very crucial for its sustainable development. Studies have shown that technology transfer (TT) is an important means through which considerable social and economic development could be achieved in developing and underdeveloped countries. 
 
TT had been playing a big role in economic history since ancient times. Archaeological evidences suggest that both hard and soft technologies were transferred from one location to the other, from one country to another. In fact, three centres of civilisation in the pre-Christian-era China, India and the Mediterranean, developed and exported a number of technologies to other parts of the world. History shows that the economic power of the Western Europe since the 12th century was rooted in printing and manufacturing technologies that were transferred from China and the Middle East. Actually, China was the source of blast-furnace steel manufacturing and clock making technologies. 
 
Technologically, Western Europe was initially underdeveloped compared to the East. It's the TT that had endowed the Western countries. After acquiring technologies from the East and Middle East, Europe aesthetically worked hard to develop them to new levels. In due course, Great Britain became the pivot of the industrial revolution in the 18-19th centuries whereby it generated steam engines, steam ships, spinning machines, railways and coke-fired blast furnaces. Afterwards, the whole Europe and USA achieved extraordinary industrial development, thanks to transfer of industrial technologies mainly from Great Britain. Technologies were transferred from Western Europe to Japan during the second half of the 19th century. 
 
Due to successful technology transfer, four countries in East Asia, namely, Hong Kong, Singapore, South Korea and Taiwan have become four 'Asian Tigers', or four 'Asian Dragons' or four 'Miracle Countries' in Asia. These countries maintained high growth rate and rapid industrialisation between the early 1960s and 1990s. All the four countries have developed into most-advanced and high-income economies, specialising in areas of competitive advantage by the 21st Century. Their unprecedented economic success stories have served as role models for many developing countries especially in the South-East Asian and Middle-Eastern countries.
 
TT in different forms had come to various  countries. The success or the failure of TT is dependent on many factors, including the maturity of technology, receivers' commitment and expectations. Successful TT is also a matter of timing. Many drivers are there that motivate TT. While comparing successes and failures of TT in some countries in Asia and Middle East, it's revealed that in 1960s Hong Kong, South Korea, Singapore and Taiwan (Category-1) in one side and Syria, Tunisia, Jordan, Morocco and Egypt (Category-2) on the other side had the same per capita income. China, India and Pakistan were much poorer than any of these countries. With TT and proper policy support from the governments, the present economic scenarios of Category-1 countries are much better than that of Category-2 and the economic disparity between the two is sky-high.
 
South Korea by now has become home of world-renowned high-tech-driven corporate bodies like Samsung, LG, Hyundai and many more. The major European consumer electronics firm Phillips could enter the flat TV market only through a joint venture with LG. Taiwan has become the base for Acer and of late acquired Gateway, a major US computer company. Four decades ago when TT was not successful, the present giant Samsung, LG and Hyundai were small firms and Acer, Logitech and other large Taiwanese high-tech firms did not exist. China, Malaysia and India are the new industrialising countries improving their technological base by TT. China is the home of Lenovo, the largest laptop manufacturer in Asia, which now owns IBM's former laptop division, and India possesses a thriving software industry. 
 
Egypt with the most industrially developed Arab economy exports largely simple textiles and clothing. The Arab economies generally had limited economic growth and exhibited behaviour considerably different from that of their Asian counterparts: less investment; an orientation to the domestic economy rather than openness to foreign trade and international technology transfer and less effort to build a high-quality education system. The rapid economic growth in developed countries had stemmed from the systematic application of science and technology to the production process. The divergence in experience between the Asian countries and Egypt, Jordan, or Tunisia as examples of non-oil rich Middle Eastern countries can be explained by many factors including differences in the quality of leadership and economic policy. But a crucial distinction in these cases was the willingness and ability to tap external knowledge to exploit the technology gap and to adopt technology in the local manufacturing process.
 
Many developed countries have adopted measures that directly or indirectly facilitate technology transfer. These measures include financing support, training, matching services, partnerships and alliances and support for equipment purchase or licensing. The latest technology development, reported by the Telegraph, says that gas made from cheese would heat almost 2,000 UK homes next month. A government-backed green energy plant will start producing gas from cheddar manufacturing waste. 
 
Developing and underdeveloped countries remain far behind in acquiring modern technology for production and distribution. Bangladesh is still far behind other emerging and developed countries due to lack of fiscal policy support, adequate training programmes, lack of firm commitment of the government and private stakeholders to undertake plans to acquire technology by R & D or by technology transfer from developed countries.
 
When the developed countries, including the four Dragons of Asia, are moving at supersonic speed with the most modernised technology used for manufacturing cars, electronic items like computer software and hardware, cell phones, lab tops, railway engines and many more, Bangladesh and some Asian countries are confined to only apparels and textile manufacturing. Bangladesh is much ahead with apparels and textile products but is 100 per cent dependent on the foreign-made machineries, equipment and accessories due to non-transfer of technology. 
 
Bangladesh has been using natural gas for the last 40 years and still it is dependent on foreign companies or foreign experts for providing technical support for production and distribution and drilling in the off-shore areas. Manufacturing air conditioners, fridges, washing machines, assembling cars, buses etc could be produced applying simple technology now-a-days. Even some Middle Eastern countries and Thailand are manufacturing these items but Bangladesh don't  and keep on importing from foreign countries for last few decades. Who's to blame for this? Policymakers or stakeholders? This is happening in many sectors due to lack of quality leaders, entrepreneurs, vision, planning for transfer of technology and so on. Even in the 21st century, we don't see any perceptible plan and long-term programmes for acquiring high-tech to move forward with the fast-growing world, either by the private sector or the public sector entrepreneurs.
 
Many countries in Latin America, Africa and Asia are still in the backyard due to non-transfer of technology to these continents. Living standards and overall social indicators are improving, poverty rates are declining, energy consumption is increasing and urbanisation rates are rising. However, this narrative of a rising Africa rests on shaky foundations of low productivity and weak competitiveness relative to the rest of the world. The countries of the continents as a whole are at the bottom of the ladder with economies that are uncompetitive because of overall low productivity. This calls for a number of interventions to enhance productivity of new and existing investments and thus improve competitiveness. One such intervention is innovation and technology transfer.
 
Technology transfer has wide areas as the process of deliberate and systematic acquisition of machinery and equipment, related technology, skills, knowledge, intellectual property rights, designs and facilities for manufacturing a product or for a service. The economic and historical evidence is clear that technology transfer has been and will continue to be a means by which latecomers to the development process can speed up their own development by gaining knowledge, experience and equipment that are known to have been successful in the more advanced countries. 
 
The writer is a Fellow Chartered Accountant and the CFO of a private group of companies. 
 
m.jalal.hussain@gmail.com

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