Technology Transfer as an Essential Feature of Economic Development - Essay Example

Current Issues: Technology Transfer Technology transfer is an essential feature of economic development. Explain the barriers to effective international technology transfer and discuss ways in which these barriers can be overcome. Abstract Technology transfer is one of the ways in which a developing country can leapfrog other nations in the economic development race. While the transfer of technical know-how and scientific knowledge is beneficial for both the donor and the recipient, there are strong barriers involved which often make the process difficult. Using the case of China, it can be shown that planning, effective methodology, application of technology and cultural understanding are essential for success. Most importantly, by going slowly and planning carefully, a company can be very successful in transferring technology. Introduction The transfer of technology from one country to another is one of the very important ways in which developing or less developed nations can learn from developed countries of the world (BEA, 1999). Developing nations like China, Brazil, India and Russia are all heavily involved in the technology transfer process which is not limited to real technology but also extends to managerial processes and enterprise management techniques which can be transferred along with the technology involved (Niosi & Rivard, 1990). In a perfect world, companies and governments of these nations can collaborate with organizations and governments of countries like America, France, Germany, the UK and other advanced states through formal agreements. The agreements outline how much technology in what timeframe would be transferred from one country to another. Theoretically, it would allow the developing country to improve its systems and infrastructure and let them catch up with the developed nations much faster than what it would take them in a normalised development schedule (BEA, 1999). However, in the real world, the transfer of technology comes with several implications, barriers and problems that are faced by both partners involved in the transfer. From some of the studies conducted on the topic, it seems that the companies in developing countries are rather quick and efficient about gathering the knowledge given to them (Marcotte & Niosi, 2000). Others seem to suggest that the transfer of technology is not an easy task and the results are often more negative than they are positive (Freeman & Hagedoorn, 1994). Examples of Technology Transfer As the cases of countries like Brazil, India and China have already been mentioned, it would be best to take one of the countries as a key example of technology transfer and to examine what barriers and mishaps have taken place in technology transfer as well as how successes in the field have been shaped over time. The case of China is the most pertinent one since the eyes of the world are fixed on China’s new position in the world as the dragon wakes up. Just a short discussion on China brings up a wide number of statements as mentioned by the introduction written by Gibbons (1987) which reads: “A billion people! If they each buy just one... If we give them technology, they’ll be just like Japan... In a country that can launch satellites, why is the plumbing so bad... All they want is technology, and they expect miracles from it... It’s completely different now. It’s hardly even Marxist... So where are all those Red Guards now? Aren’t they just waiting... If we don’t sell it to them, France or Japan will... They’ll pin down the Russians on the Eastern front... How do we know they won’t use it against Taiwan or us... There’s a lot we can learn from them... (Gibbons, 1987, pg. 3)” Clearly, that is a good summation of all the fears and hopes the western world has concerning technology transfer to China. While China has long been seen as a military enemy for the capitalist world in reality it has become a valuable if not essential trade partner for many countries (Marcotte & Niosi, 2000). With the examples given for the technology transfer to China by Gibbons (1987), it becomes easy to look at the various barriers which companies and nations often come across in the transfer of technology across borders. The Barriers Perhaps the biggest barrier faced by a company comes from the relative size of the company as it stands in its home country. For example, the first companies which became successful in transporting technology to China were American giants who took up global investment opportunities after the collapse of the Soviet Union. It helped matter in no small terms that these companies already had off shore investments and offices that had given them the experience of working a foreign country (Gibbons, 1987). Smaller companies on the other hand would have to be very careful in dealing with or setting up operations in China since one wrong move can mean a loss of millions (Niosi & Rivard, 1990). The major barriers faced by companies like GE, McDonnell-Douglas, IBM and others have been outlined by Gibbons (1987) and they have faced problems such as: The nature of knowledge Cultural differences Acceptance by recipients Technology being transferred All these are the primary barriers which hinder the process of technology transfer, at the same time, there are also smaller less obvious issues like finding business related reasons for the transfer as well as ensuring the protection of intellectual property (Keller, 2005) which has been a thorn in the side of international investors working in China for quite some time (Gibbons, 1987). The nature of knowledge When a person sets out to transfer knowledge from themselves to other people, they train for an entire lifetime before they can be called teachers, lecturers or professors. These individuals are awarded and often rewarded with great success and appreciation by our society since we know the value of knowledge and how important it is to learn. Similarly we understand that the process of transferring knowledge is not an easy one since learning takes time and effort both on the part of the teachers as well as the learners (Argyris & Schon, 1978). The same problems are faced with certain management techniques and processes which need to taught to Chinese firms in order to make their operations more inline with companies in Britain or America. While things like teaching technicians how to build a electric circuit and the assembly process involved in making a computer or DVD player may be a simple process it may be very difficult to teach why workers should be given four to five weeks leave per year for rest and recuperation (Marcotte & Niosi, 2000). Cultural Differences This also ties in to the idea of cultural differences playing a part in the transfer of technology because whether we accept it or not, China is a country with an rich, extensive and deep running historical as well as cultural background. There are certainly cultural differences between how business in done in Beijing as compared to London and the differences have to be accepted and respected by those who wish to work with the Chinese (Lee & Schelkopf, 2006). Acceptance by Recipients The argument about culture ties in closely with the acceptance offered by the recipients regarding the technology as well as the people who wish to transfer technology to them. The first acceptance is cultural i.e. is that type of technology culturally acceptable in terms of the changes it would bring to the processes or business norms of the people. The second type of acceptance comes from the people themselves, i.e. do they accept the donor company as partners and friends or are they merely tolerating them for a while? These questions may not seem important when a company is taking a micro view of the technology transfer but they are important in a macro sense considering that governments and other larger organisations like regional bodies or international financial institutes can be involved in the process of technology transfer (Keller, 2005). Marcotte and Niosi (2000) suggest that to raise the level of acceptance the acquisition, interpretation as well as the use of technology being transferred must be tailored to the requirements of the recipients. For instance, if the primary requirements of the recipient come from the agricultural side, they might show little interest in information technology. Similarly, if the recipient is interested in increasing and establishing its industrial base, it might not be that interested in technologies that help an agricultural economy (Tsang, 1994). The Technology This leads to the final barrier involved in the transfer, i.e. the nature of the technology which is being transported from one country to another. For instance, military technology is one situation where the barriers are quite stringent and it is often not in the interest of the donor country to transfer any part of that technology to the recipient. However, in the time we live in, military technology is often so closely related and connected with civilian technology that it becomes difficult to separate the two (Keller, 2005). In the case of pure technological goods i.e. computers and related equipment, this situation is particularly true because a computer can be used to run a high end simulation of a weather front as well as conduct a simulated nuclear experiment (Lee & Schelkopf, 2006). The nature of computers being used in civilian and military applications has come to a point where it is difficult to classify which one is which and the transfer of technology in such situations becomes problematic to say the least (Keller, 2005). Overcoming the Barriers The best time to overcome the barriers is during the negotiation phase which involves the planning and strategic implementation of how the technology or process itself will be transferred from one country to another. By having an established plan in place, a company can create standard operational procedures regarding different types of technologies and then use the standards to create solutions for singular situations (Lee & Schelkopf, 2006). As reported by Marcotte and Niosi (2000) more than two thirds of the companies in their study encountered problems during the planning and negotiation phases which goes to show how important it is to foresee and mark the problems before they have a negative effect on the transfer process. In fact, even with good planning a company can come across problems in the implementation phase, but good planning allows a company to be prepared for the problems rather than let the problems collapse the project in its entirety (Niosi & Rivard, 1990). The nature of knowledge is a barrier which can only be overcome by viewing knowledge as something tacit and explicit to apply the theories of cognitive learning and evolutionary learning in which information processing requires the acquisition as well as the interpretation of knowledge given to the recipient body. It also involves acting on the given information to produce new knowledge and to evolve as the learning process changes how the technology of the donors affects the recipients (McNeil & Wiles, 1990). Additionally, while technology is being transferred codified knowledge that includes things like building plans, instruction manuals and electronic blueprints have to be passed to the recipient along with tacit knowledge assets. The tacit assets are very much connected to the cultural aspects of the transfer and by transferring tacit knowledge a country can decrease the cultural and bureaucratic barriers which hold down technology transfer. Both bureaucracy and managerial differences accounted for fourteen percent of the problems faced by those who were transferring technology to China and improved cultural understanding could help both these aspects (Niosi & Rivard, 1990). Even though China is doing a lot to improve its government system, yet it may not be enough for many companies to risk an investment venture into China (China Daily, 2006). A large part of the cultural barrier comes from language and the differences in English and Chinese. Differences between the languages as well as English speaking countries and China have been studied for many years with different researchers presenting their opinions on how strong or weak these barriers can be based on the differences they discovered and people’s ability to overcome them. While these barriers can be quite difficult, they can be overcome with good HR selection and training (Tsang, 1994). If a company or a country has decided to transfer some technology to china or any other country for that matter, it would an excellent plan to have one or more individuals in the human resources who are completely familiar with both cultures and languages. Acceptance of the recipient can also be increased by teaching them how a particular technology is useful for them across several segments in which they need or want to grow. As suggested by McNeil and Wiles (1990), while training individuals in a company where cultures might be different and a possibility of a culture clash exists, it is best to work as a joint venture using the direct teaching model where the focus of the teaching process is on team morale as well as interactive learning. Conclusion Despite all the information available and the modern communication tools available to us, technology transfer remains a rather difficult subject and quite an issue due to the multitude of barriers involved. While most of the barriers can be overcome, there are certain issues for which no amount of planning or managerial skill is enough and the company might have to accept that their project of transferring technology to China or setting up a new operation has not met the success they expected (Freeman & Hagedorn, 1994). There are also a number of risks involved with technology transfer and in the case of China a company has to be prepared for the fact that their intellectual property rights over designs of certain items may not be as well protected as they would like them to be (Lee & Schelkopf, 2006). At the same time, the benefits connected to technology transfer and the development of certain projects in countries like China and Western Europe are so high that it would seem almost a waste not to take up on those opportunities (BEA, 1999). In fact, if the entire process of transferring technology from one country to another is seen as an investment related business project, the chances of a company completely missing out on an important detail can be significantly decreased This leads to the conclusion that technology transfer must be undertaken with care and with as much planning as any other major investment being made by a company. All risks, including the risk of information leakage, have to be examined and countered as much as they can be. Additionally, The ultimate success of the transfers depends not only on the amount of learning which can be by the recipient firms but also the abilities of the donors to break across the various previously discussed barriers involved in technology transfer (Marcotte & Niosi, 2000). Overall, if the evolutionary and cognitive methods of knowledge transfer are used, the process of technology transfer can be simplified and both countries involved in the transfer relationship can benefit in a positive manner. Works Cited Argyris, C. and Schon, D. 1978, Organizational Learning, Addison-Westley. Freeman, C and Hagedorn, J. 1994, ‘Catching Up or Failing Behind: Patterns in International Interfirm Technology Partnering’, World Development, vol. 22, no. 1, pp. 771-781. Gibbons, J. 1987, Technology Transfer to China, U.S. Congress, Office of Technology Assessment, U.S. Government Printing Office. Keller, J. 2005, ‘Balancing national security and freedom of commerce’, Military & Aerospace Electronics, vol. 16, no. 4, pp. 1-3. Lee, Z. and Schelkopf, J. 2006, ‘How to transfer technology from the US to China’, Managing Intellectual Property, Vol. 161, pp. 53-55. Marcotte, C. and Niosi, J. 2000, ‘Technology Transfer to China: The Issues of Knowledge and Learning’, SpringerLink.com, [Online] Available at: http://www.springerlink.com/index/P72175N007234465.pdf McNeil, J and Wiles, J. 1990, The Essentials of Teaching, MacMillan Publishing. Niosi, J. and Rivard, J. 1990, ‘Canadian Technology Transfer to Developing Countries through Small and Medium Sized Enterprises’, World Development, vol. 18, no. 10, pp. 1529-1542. Tsang, E. 1994, ‘Strategies for Transferring Technology to China’, Long Range Planning, vol. 27, pp. 98-107. China Daily. 2006, ‘China punishes 416 officials for commercial bribery’ ChinaDaily.com.cn, [Online] Available at: http://www.chinadaily.com.cn/china/2006-07/31/content_653859.htm Bureau of Export Administration (BEA). 1999, ‘U.S. Commercial Technology Transfers to the People’s Republic of China’, Office of Strategic Industries and Economic Security, [Online] Available at: http://www.fas.org/nuke/guide/china/doctrine/dmrr_chinatech.htm Read More