RESTRICTEDWORLD TRADE
ORGANIZATIONIP/C/W/243/Add.2
16 March 2001
(01-1300)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
TECHNOLOGY CAPACITY BUILDING:  INFORMATION FROM OTHER
INTERGOVERNMENTAL ORGANIZATIONS
UNIDO
Addendum
The present document reproduces the information on technology capacity building which has
been received from the United Nations Industrial Development Organization, by means of a
communication dated 27 February 2001.
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FOREWORD
1. The importance, complexity and rapid changes in technology demands careful attention by
both policy makers and enterprises. The new global economy has strong knowledge and technology
base. Developing countries in their quest for bridging the technology divide need assistance in
building capacity to meet this challenge. UNIDO with its global role and outreach is in a position to
provide assistance in meeting this challenge.
2. UNIDO has in place a Technology Programme for more than 20 years. It has provided a
strong support to technology development and capacity building to developing countries in the area of
Management of Technology as well as in identified priority sector areas focussing on national needs.A significant aspect of this has been to combine the technology programme with investment
promotion activities in recent years. In addition UNIDO is providing capacity building support as well
as technical assistance in areas like cleaner production and environment management, energy
efficiency, information technology, quality and agro-processing industry.
3. This paper highlights the increasing divide that separates industrialized from developing
countries, and elaborates on UNIDO’s approach and role in the area of technology capacity -building
and its Technology Programme.
PART I  THE PRESENT DEVELOPMENT SCENARIO
A. THE TECHNOLOGY DIVIDE AND THE INVESTMENT GAP
4. Nowadays, the role and importance of investment and technology in economic development
and growth are being well recognized.  Record highs of investment combined with an accelerating
wave of technological innovation are rapidly changing the development paradigm.  The globaleconomy has become knowledge driven and te chnology-driven; but while innovation andIP/C/W/243/Add.2
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technological progress are the reasons for unprecedented prosperity and growth in industrialized
countries, many developing countries are at risk of irreparable marginalization, trapped into an
increasing technology divide and investment gap.
5. As far as technology is concerned, a small number of industrialized countries provide
practically all of the world's technology innovation; some developing countries are able to adopt thesetechnologies in production and consumption; the remaining part is technologically disconnected,
neither innovating nor adopting foreign technologies. Foreign direct investment has emerged as an
important channel of transfer of technology both because of its direct and spillover effects. In this
context, foreign direct investment as well as acquisition and diffusion of technology are, and more
than ever, critical issues for developing countries. However, the share of developing countries in
foreign direct investment declined from 38 per cent in 1997 to 24 per cent in 1999; Africa, for
instance, accounted for a mere 1.2 per cent of international investment, while South-East Asiaattracted 18.9 per cent. This is an indication of the need to deal with issues of technology directly as
well.
6. Two of the major factors which determine competitiveness, are knowledge and technological
innovation. Indeed, a nation’s competitiveness depends on the capacity of its industry to innovate,
upgrade and sustain innovation. To meet the challe nges of the global economy and avoid the risk of
marginalization, industries in developing countries will need to increase their efficiency and
competitiveness by technology upgrading and modernization. In this process they need access to and
transfer of knowledge and technology, develop appropriate absorptive capacity and develop their own
innovative capabilities.
7. The acquisition of technology by developing countries has to meet the requisites of a fast-
moving and aggressive competitive environment and rely not only on the adoption of technologies
produced elsewhere, but also on their own technological efforts and innovation systems. In all these
activities information and communication technologies have a pervading influence that means that no
development effort can lead to sustainable growth if this reality is disregarded.
8. Successful integration into the global economy will require increased learning and
development of capabilities on the part of enterprises. However, for this they require institutional
support. The development of services to help the private sector mobilize the knowledge, skills and
technology needed for enhancing production capabilities  and productivity growth is therefore of key
importance for the economic development of countries. This requires an enabling environment at the
policy, institutional and enterprise level.
B.  UNIDO ’S STRUCTURAL CONSIDERATIONS IN TECHNOLOGY PROMOTION
9. Technology is a key component in any industrial development process. Hence all UNIDO's
operational branches are involved in technology transfer operations and capacity building. However it
is also recognized that apart from specialized sector al technical solutions there is a need to deal with
trans-sectoral methods of and approaches relate d to technology transfer cycles, management of
technology and innovations, the legal issues related to technology transfer operations, the negotiation
process etc.
10. UNIDO's structure and organization of service modules reflect this thinking. Thus the process
of technology transfer involving different elements and players, networking and management of
technology is handled separately under the service module “Investment and Technology Promotion”.
This service module additionally supports technology with investment activities.  This combination ofinvestment with technology fulfills a key elemen t in the technology transfer process. Investment
promotion and technology promotion are regarded as interrelated parts of a process that aims at
improving the competitiveness at the enterprise level and sustainable growth at the national level.
Altogether, the major aim of the Investment and Technology Promotion Programme is to make theIP/C/W/243/Add.2
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constituent countries achieve competitive production and sustainable growth. However there are
distinct components both on investment and tec hnology side that need clear-cut addressing. UNIDO
therefore addresses these issues separately through different programmatic and institutional approach.
11. Under this service the following broad activities are covered:
(a) Technology policy formulation
(b) Creation and upgrading of technology centres
(c) Management of technology
(d) Technology transfer networking.
12.  The other service modules that provide capacity building for technology transfer are related
to the following thrust areas:
(a) Agro-industry
(b) Cleaner production and environment
(c) Quality(d) Energy
(e) Information
PART II  UNIDO'S APPROACH AND ROLE
13. The significant issues related to technology promotion and technology developments as well
as the corresponding needs of developing countries are not new to UNIDO.  It has been dealing with
technology issues and technology promotion in its various dimensions, namely innovation,
management and transfer. UNIDO has worked with diverse target groups including government
institutions, technology centers, academia and enterprises. It has been active at the policy level and at
the operational level; it has developed a considerable array of tools in the form of methodologies,publications and training packages that embody a unique know-how on technology management and
transfer including its interrelations with investment operations.
14. UNIDO’s technology programme is oriented to m eet the needs of developing countries in the
present development context and leading to increased productive capacity and competitive production
on a sustainable basis. UNIDO assists in developing an appropriate institutional framework that
supports competitiveness enhancement, networki ng, upgrading and tech nological innovation. It
provides a range of capacity-building services aimed at enhancing micro-economic efficiency and
creating competitive enterprise advantages, in particular through the promotion of quality
management systems and of industrial partnerships, improvement of technology management
capabilities and the strengthening of productivity centres.
The programme has the following features:
A. TECHNOLOGY POLICY FORMULATION
15. The programme addresses technology development problems at the macro-level (government
and institutional sphere) and at the micro-level (addressing the needs of enterprises). In this processTechnology Foresight and Monitoring should be regarded as the most upstream elements of the
process, and provide inputs for the formulation of Technology Policies and Strategies, which guide
the development of the technological infrastructure, support to innovation, incentives to enterprises
and assistance to them in technology management and technology transfer, leading to the envisaged
competitiveness and growth at the enterprise level.IP/C/W/243/Add.2
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16. Programme on Technology Foresight has already been launched in the Latin American and
the East European regions and is designed to finally assist in the providing inputs for technology
policy.
B. CREATION AND UPGRADING OF TECHNOLOGY CENTRES
17. UNIDO has been active at creating international technology centres in various technical areas.
The original purpose of the centres was to increase awareness of new technologies in the developing
countries and to allow access to applied research and development and training in these new
technologies for participants from developing countries.
18. Increasingly, technological innovation, product development and market success require the
convergence of multiple technological disciplines a nd interaction among different actors, both in the
investment and in the technology spheres. This real ity also underscores the need of firms, especially
SMEs, to access external sources of technical knowledge and related relevant information (markets,
customers, technology suppliers, etc.), And to rely  on their support and technological collaboration.
They also need additional investment and technology support services and training in order to meet
the new challenges.
19. Each Technology Centre has a network/sub networks consisting of industrial R&D institutes,
universities, industrial associations and professional societies working in the same subject area and
having their own networks of partners with strong links to industry.  These networks surrounding the
Centres provide the opportunity to ensure that the work programmes of centres reflect continuouslythe industrial and market needs of beneficiary countries.
20. The creation of international and national technology centres has continued and became a
driving force for the technology programme like creation of ICAMT-International Centre for
Advancement of Manufacturing Technology, IMAAC-International Materials Assessment andEvaluation Centre, ICMET-International Centre for Materials Evaluation Technology; and more
recently the launching of a project for the creation of ICMB-the International Centre for Medicine
Biotechnology.
Technology management, innovation and institutional support
21. “Technology Management” as a process encompasses the body of knowledge and the range of
articulated activities, that are related to generation of and use of technology in competitivemanufacturing and marketing of products, including quality-related aspects, the innovation process
and the transfer of technology from developers to the users.  UNIDO assists developing countries by
providing educational and institution-building pr ogrammes leading to extension services and
consultancy services on technology management and innovation, including technology needs
assessment, formulation of technology strategy, identification of suitable technology sources andtechnology acquisition.
22. Technology management and innovation and business alliances have been the subject of
capacity-building activities and development of training materials. Tools and methodologies
developed by UNIDO for capacity building activities in the area of technology management andtechnology transfer as well as those combining investment- and technology-related elements represent
and invaluable asset and an unquestionable competitive advantage.
23. UNIDO has given special attention to capacity building functions aimed at developing
institutional competencies and professional skills in the various disciplines which are relevant for theimplementation of the full cycle of innovation, investment and technology transfer.  These capacity
building functions impact basically on SMEs and comprise an articulated package of training courses,
including the corresponding tools and methodologies aimed also at training trainers and achieving aIP/C/W/243/Add.2
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multiplier effect and sustainability of the process .  Examples of courses covered by the package are:
Industrial Project Preparation and Appraisal; Feasibility Analysis and Reporting; Technology Needs
Assessment; Technology Transfer Negotiations; Technology Management at the Enterprise Level;
Technology and Investment Partnerships; Joint Ventures and Business Alliances.
C. TECHNOLOGY TRANSFER AND NETWORKING
24. No developing country can generate all technology needed  to become competitive and
connected to the world economy.  Acquisition and tr ansfer of technology from outside sources (from
industrialized countries or from other more advanced developing countries) is an indispensable part of
the development process. UNIDO is expected to assi st in the process, including the identification of
technology sources and in the implementation of the technology acquisition and transfer process, also
having in mind that:
• While in the past, developing countries pursued import-substitution regimes and the
acquisition of technology would mostly consist of imitating processes in use in developedcountries, nowadays, developing countries are moving to export-oriented policies and the
acquisition of technology has to be a global market driven in the new trading regime;
• As technology and product life-cycles become shorter, technology and knowledge are
increasingly regarded as major assets for competition in the domestic and international
markets; this has lead to tightening of intellectual property protection  by industrialized
countries and to increased costs and barriers in the access to technology through commercial
channels; also the environmental considerat ions become an intrinsic element of the
development agenda, both at the international and at the domestic level.
25. UNIDO has established investment and technolo gy promotion offices (ITPO) that support the
transfer of technology and investment from the countries of establishment to other developing
regions.  The ITPOs are linked with public and private organizations working in the field of industrial
development.  ITPOs are redressing the industrial development imbalance by bringing investment and
the latest technology to those countries most in n eed of a promotional helping hand.  ITPOs are also
opening up new opportunities for investors and technology suppliers to find potential partners in
developing countries with the economies in transition.  These Offices are presently located in:
(a) Bahrain
(b) Belgium (Walloon region)(c) China
(d) France
(e) Greece
(f) Italy
(g) Japan
(h) Poland
(i) Republic of Korea(j) Russian Federation
(k) Slovakia
26. In addition investment promotion units have been  established that link up with the ITPOs and
they are located in:
(a) Egypt
(b) Jordan
(c) Morocco
(d) Tunisia(e) UgandaIP/C/W/243/Add.2
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27. A focal point has also been established at Northwest Development Agency and NIMTECH in
the United Kingdom.
28. This networking is now going to be supported by the web-based UNIDO exchange that is
linking up the different technology and investment suppliers with those looking for it in an interactive
manner.  UNIDO exchange is a prime tool for promotion, and in particular to network the major
investment and technology players to ease their cooperation with UNIDO and the cooperation among
themselves, and to provide a dynamic forum for match-making business opportunities and foster
international technology partnerships.
29. To address specific regions UNIDO has set up an Asia-Africa Investment and Technology
Promotion Centre in Kuala Lumpur to bring the As ian and African businesses closer for investment
and technology transfer.
a. Techmarts, intechmarts and business round tables
30. Techmarts and intechmarts are “trade names” coined by UNIDO to designate events designed
to bringing together technology seekers and project promoters of developing countries and technology
suppliers and potential investment partners from industrialized countries or from other developing
countries. The preparation, organization and implem entation of techmarts and intechmarts follow a
methodological approach, which reflects UNIDO’s e xperience and aims at maximizing the chances
for successful matchmaking.
31. Techmarts and intechmarts are organized according to demand from client institutions of
developing countries, usually investment promotion agencies, industrial associations, SME
development organizations, etc. It also involves  the active cooperation of UNIDO ITPOs, which are
instrumental in the identification and mobilization of technology sources and potential investors
matching the technology needs and project requisites on the demand side.
b. Sub-contracting Exchanges (SPXs)
32. UNIDO provides technical assistance to developing countries for establishing and operating
"Subcontracting and Partnership exchanges" (SPXs).  The SPXs act as centres for technical
information, match-making and clearing houses for industrial subcontracting and partnership inquiries
and opportunities.  In the last 15 years, UNIDO has established 57 SPXs in 32 countries, of which 48
are currently in operating on sustainable basis (85% success rate) covering a total of 15,588 registered
companies.
33. SPXs are an important instrument to generate business opportunities SMEs of developing
countries and, at the same time, upgrade technical capabilities. They are an important element in the
national and international supply management systems and represent a positive factor to foreign direct
investment.
PART III- SECTOR PROGRAMMES
34. UNIDO in addition also has sectoral programmes for technology capacity building in specific
areas as food processing, leather, textiles , wood, agro-machinery and agro chemicals. In these sectors
UNIDO builds capacity through tailor made technical assistance, on-the-job training for product
quality control, process optimization and product safety.IP/C/W/243/Add.2
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A. UPGRADING AGRO INDUSTRY
35. Upgrading agro-industries is one of the world's most important challenges, particularly among
the least developed countries of Africa and those on other continents. Up to 40 per cent of agricultural
produce is wasted in the least developed countries, mainly through lack of storage and processing
facilities, poor roads on which to move produce before it perishes, and lack of knowledge ofprocessing technologies. Only about 35 per cent of food is processed in Africa, compared with some
98 per cent in developed countries. The timber industry is in its infancy, with less than 10 percent of
logs processed to add value in manufacturing. Poor use is made of natural fibres for textiles. The
processing of hides and skins is at a basic level. Basic agro-machinery, tools and agro-chemicals are
seldom produced locally; repair and maintenance is inadequate. Institutional support, such as
technical, advisory, or outreach services, is poor, making it difficult to select appropriate processes,
machinery and equipment.
36. Food security and rural development rely not only on the production of basic raw materials
and fresh food, but also on their industrial conversion and processing into less perishable, durable,
value-added products that can be marketed and sold domestically and abroad. UNIDO provides
technical and economic support, particularly in the processing industries.
37. The main sectors involved are food, leather, textiles, wood, agro-machinery and agro-
chemicals. Each sector requires know-how for a wide range of specialized technologies. UNIDO
imparts or assists in helping the transfer of such  know-how wherever it is needed, specifically:
(a)  Food
Grain milling, production of bakery products, including enrichment; pressing of vegetable
oils; processing of fruits and vegetables by sun-drying, canning, juicing and freezing; meat
and fish processing; dairy products, including dried and powdered milk, yogurt and similaritems. UNIDO is also experienced at advising on related aspects of consumer health and
safety, packaging, and in meeting and maintaining the product and process control standards
necessary to succeed in export markets.
Last year UNIDO carried out capacity building activities in fish safety in the United Republic
of Tanzania and Uganda. This helped the countries in getting the European Union ban on fish
exports lifted. In guinea the initiation of similar activities has led to the extension of EUauthorisation to fish exports from that country.
(b)  Leather
Environmentally friendly tanning of hides and skins; preparation procedures to ensure high
quality products; tanning processes and technologies; footwear design and manufacture;
selection and use of equipment; style and fashion advice for exporters.
Under the Regional Africa Leather and Footwear Industry Scheme extensive technical
assistance was provided to the private sector  in raw material improvement, mitigating the
negative impact of tanneries on the environment and developing the leather products industry.
(c)  Textiles
Textiles and garment production; the use of natural fibres and synthetics; spinning, weaving
and knitting; dyeing and finishing; computerized colorimetry and colour matching; reduction
of pollution from pigments; minimization of waste in cutting out garments.IP/C/W/243/Add.2
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As garment exports are a major export item for developing countries and is likely to grow in
the future technical assistance is provided in setting up textile parks and improving and
meeting the quality requirements of export markets.
(d)  Wood
Efficient wood processing and the manufacture of wood products can make major
contributions to sustainable forest management and conservation.  Unido services cover the
related wood technologies of grading, drying and preservation; selection of equipment for
rough milling, machining, assembly and finishing; and structural design.
UNIDO is implementing a large project in Northeast India to upgrade technologies and
networking capacities for industrial production of laminated flooring, panel products and
furniture. Similar programme for bamboo is to be launched in Cuba.
In all of these fields, UNIDO works closely with governments, decision makers and industry
and trade associations to determine priorities, identify and remedy problems and institutionalweaknesses, raise awareness among the main stakeholders, set up training programmes,
provide tailor-made technical assistance and publicize commercial applications and success
stories.
There are manuals and technical guidance notes for most services, as well as on-the-job
training for product quality control, process optimization, maintenance, minimizing costs and
ensuring product safety. UNIDO also offers technical workshops, expert panels, problem
analysis, technology assessment, and study tours to appropriate technical institutions,
exhibitions and conferences. Technical information databases are also available on all agro-
industrial sectors.
B. QUALITY IMPROVEMENT
1. Poor product quality and low productivity are major impediments to enterprise
competitiveness and growth. UNIDO’s integrated quality approach addresses precisely these
challenges. The programme is based on a system-wide approach to improve every aspect of a firm’s
production process so as to achieve ever-higher levels of quality and efficiency, while simultaneously
holding down costs. Counterpart institutions, both pu blic and private, are trained to assist firms to
master methods of quality management and performance enhancement.
2. Issues relating to quality are emerging as important barriers to trade.  Products from
developing countries are required to comply with an array of ever more stringent standards. Some
requirements are related to consumers’ safety and health protection and are, thus, mandatory whileothers re voluntary relating improving quality ma nagement and environment. Capacity-building and
technology transfer in this area ensures the competitiveness and viability of businesses.  UNIDO
assists in training and technology capacity building to set up appropriate infrastructure for quality,
standardisation, testing and metrology.
3. New initiatives have been taken, jointly with the European Union, in this area focussing on
the West African region (UEMOA).  Under this programme, initially eight participating countries-
Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo-will have a
chance to reinforce the competitiveness of the private sector to meet the challenge of globalization.
UNIDO is also joining the pre-peer evaluation scheme for laboratory accreditation and inspectionbodies that will provide opportunities for improvement in product quality and access to international
markets. UNIDO’s intervention is providing training  to counterparts, restructuring and equipping of
laboratories and setting up Industrial export zone.IP/C/W/243/Add.2
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C. INFORMATION
1. The role of information and knowledge for industry is rapidly increasing in developing
countries. Hence, the ability to support industrial information and knowledge requirements of
industrial actors in developing countries is crucial. Developing countries have been provided support
in industrial information networking. . Initiatives were undertaken to explore SME support activitiesto meet the increasing need for e-business models. In view of the rapid development of mobile
commerce and the new business opportunities that this technology offers to developing countries and
transition economies, UNIDO is joining hands with leading private sector institutions like Ericsson to
prepare guidelines for future activities.
2. UNIDO has prepared a programme for web-base d interaction for investment and technology
promotion called the UNIDO EXCHANGE. This would be a platform to share information amongstthe different players as well as enable technology seekers and technology suppliers to share
information for transfer of technology.
D. ENVIRONMENT
1. Environmental issues are receiving increased attention. Industrial pollution and waste
management have to be dealt with by all the countries. Developing and transition economies are
finding this issue particularly challenging on account of lack of resources, technology problems as
well as inexperience in dealing with industrial pollution and waste disposal.
2. This is an area, which needs transfer of technology, capacity building and training to enable
the developing countries to deal with them. It also demands a shift in thinking from end-of-pipe-
treatment to prevention.  This change involves changes in management attitudes, shop floor
operations, industrial processes, equipment and even product design. To support the developing
countries in dealing with these issues and build  the technology capacity, national cleaner production
centres have been set up in 19 countries jointly by UNIDO and the United Nations EnvironmentProgramme.  They provide training, awareness and consulting services to small and medium
enterprises on cleaner production. In addition industries requiring modern effluent treatment plants are
guided and even model plants set up for producing a final effluent that meets internationally accepted
effluent discharge standards.
CONCLUSION
Technology capacity building and technology transfer is a core area of work for UNIDO. In addition
to the brief details provided above it is also active in such areas as energy efficiency and
implementation of Montreal Protocol Projects. UNIDO on its part is working towards building of
competitive economy, productive employment and sustainable environment. Promotion of these
objectives involves a substantial amount of input on technology. UNIDO works to strengthen thecapacity of the players and bring the suppliers and seekers, developed and developing and markets
and manufacturers closer to provide new opport unities for people in the developing world.
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