Technology Transfer in a
Globalizing World: Many
Promises, Lack ofResponsibility, andChallenges for Africa

M.H. Khalil Timamy

ATPS SPECIAL PAPER SERIES No. 21

Published by the African Technology Policy Studies Network, P.O. Box 10081, 00100
General Post Office, Nairobi, Kenya.

© 2004 African Technology Policy Studies Network (ATPS)

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ABOUT THE AFRICAN TECHNOLOGY POLICY STUDIES NETWORKThe African Technology Policy Studies Network (ATPS) is a multi-disciplinary network of researchers,
policy makers, actors in the private sector and other end users interested in generating, promoting
and strengthening innovative science and technology policies in Africa. With a regional secretariat in
Nairobi, the network operates through national chapters in 17 countries, with an expansion plan tocover the entire sub-Saharan Africa.
One of the objectives of the network is to disseminate research results to policy makers, legislators,
the organized private sector, civil society, mass media and farmers’ groups through publications,dialogue and advocacy. Among its range of publications are the Working Paper Series (WPS),
Research Paper Series (RPS), Special Paper Series (SPS) and the Technopolicy Briefs.
Papers published under the ATPS Special Paper Series are those commissioned as concept
papers, think pieces, leading conference papers and keynote addresses. In keeping with
our knowledge brokerage function, ATPS publishes, with permission of the author(s) or
journal editors, papers (published or unpublished) produced by distinguished academics/
researchers for a different purpose but judged by ATPS to be of excellent quality. Thesepapers address significant policy questions relevant to the work of ATPS and/or support
the Southern voice or an African perspective. We also consider theoretical papers that
advance our knowledge of science and technology policy issues.
ATPS is supported by a growing number of donors including the International Development ResearchCentre (IDRC), the Carnegie Corporation of New York, the Rockefeller Foundation, the World Bank,
the OPEC Fund, Ford Foundation, Coca-Cola Eastern Africa, the African Development Bank, InfoDev,
and the Royal Dutch Government.

List of Abbreviations and Acronyms
AIJ
Activities implemented jointly
BHL
BZD
Beijing Heavy Electrical Machinery Works
CBD
Convention on Biological Diversity
CDM
Clean Development Mechanism
CFCs
chlorofluorocarbons
CNTIC
China National Technical Import Corporation
COP
Conference of the Parties
CWE
China International Water and Electric Corporation
DAEs
Dynamic Asian Economies
DCs
Developing countries
DFI
Direct foreign investment
FCCC
Framework Convention on Climate Change
GATT
General Agreement on Tariffs and Trade
GHG
Greenhouse gases
HCFCs
hydrochlorofluorocarbons
HFCs
hydrofluorocarbons
HPEA
DAEs Dynamic Asian Economies
ICOLP
Industry Cooperative for Ozone Layer Protection
ICs
Industrialized countries
ICTs
Information and communication technologies
IMF
International Monetary Fund
ISI
Import substitution industrialization
ITCC
ITDC
Independent technology development capacity
ITLC
Independent technology learning capacity
JI
JICA
KEPCO
Korea electric power company
KNE
Koprea Nuclear Engineering Company
KOPEC
KOSAMIKorea Society for the Advancement of Machine Industry
MCI
Ministry of Commerce and Industry

Table of Contents
1.0
2.0
2.1
2.2
3.0
3.1
3.2
3.3
4.0
4.1
4.2

5.0
5.1

5.2

INTRODUCTION
THE TECHNOLOGY TRANSFER PROCESS: CONCERNS, CONTENTIONS AND
CONTROVERSIESTechnological Capabilities and the Transfer Process
Technology, Technology Policy, and Technological Change
2.2.1 Modes of technology transfer
2.2.2 Packaged and unpackaged contracts
APPRAISING AFRICA’S TECHNOLOGICAL PATTERNS: DOMESTIC SHORTCOMINGSAND EXOGENOUS CONSTRAINTS
Systemic Pitfalls on the Domestic Front
Technology-Subverting Tendencies at the Global Level: Why the North Has Not Delivered
Strategic Considerations: Intellectual Property Rights and the West’s Competitive Advantage
WHY HAS AFRICA NOT STOOD ON THE SHOULDERS OF GIANTS? LESSONSFROM EXPERIENCE
Africa’s Urge to Industrialize
How the Giants Did it: Distilling the Gems of Technological Success
4.2.1 Japan
4.2.2 The Case of South Korea
4.2.3 China
4.2.4 Other examples
GLOBAL CONVENTIONS, PROTOCOLS AND AGREEMENTS: FROM SOLEMN
PROMISES TO LIP-SERVICE COMMITMENTS
Sustainable Technology Transfer as a Global Imperative
5.1.1 Industrial ambitions, technological change, and environmental decay
5.1.2 Diffusing environmentally-sound technologies
5.1.3 Industrial acidification and global environmental degradation
5.1.4 The ozone-depleting substances and international cooperation
Global Commitments and Africa’s Prospects for Building Eco-Capabilities
5.2.1 Commitments under Agenda 21
5.2.2 Commitments under the Convention on Biological Diversity
5.2.3 Commitments under the United Nations Framework Convention on
Climate Change, Joint implementation, and techno-financial imperatives

5.2.4

6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
7.0
7.1

8.0
9.0
10

Systemic contradictions in the regime of global conventions andagreements: the WTO as the sword of Damocles
CHARTING OUT NEW TECHNOLOGICAL HORIZONS: AFRICA’S STRATEGICCHALLENGES
Learning from Past Mistakes
Leaders and Technological Change
Finance, Control and Dependence
Legislation, Local sub-Contracting, and Domestic Content
Counterpart Staffing Model and Crucial Capacities
Exemption and Emergency Clauses
Embassies and Technological Search
Holding the West Accountable
Industrial Planning and Technological Capability Indicators
Technology Needs Assessment for Sustainable Industrialization
Technology Policy Lessons for Africa
7.1.1 The need for a new cognitive orientation
7.1.2 Attaching sufficient importance to pre-investment capabilities
7.1.2 Underlining the importance of identifying technological targets
Conclusion
Bibliography
Appendix

1.

Introduction

In numerous international fora and global gatherings, Africa has often been promised a wide rangeof technologies from the rich industrialized countries of the North. Such pledges are made in thecontext of global concerns to pull Africa out of grinding poverty and, in the process, propel her on apath of sustainable economic change. Vast commitments have studded the pages of global
conventions and protocols, the latter being agreements reached in international conferences that in
effect, epitomize global efforts at international cooperation. For example, the post-Rio (Earth Summit,
1992) products such as the Convention on Biological Diversity (CBD) and the Framework Convention
on Climate Change (FCCC), among others, are dotted by sterling technological commitments.
Clearly, such formal assurances foster the impression that Africa’s circumscribed access to vitaltechnologies has remained a critical constraint in her efforts to catalyze the process of sustainable
development.
Yet, in both principle and purpose, the imperative to technologize Africa has largely remained lip
service. One view is that the rich industrialized countries have neither been keen nor enthusiastic in
keeping their promises on the grounds that significant technology transfer to Africa would jeopardize
their competitive advantages in the foreseeable future. There is another perception that Africa is
guilty of not doing enough. Not only have Africa’s efforts been shallow, inchoate, flawed, and poorly
conceived, but she has also demonstrated technical negligence by failing to learn from robust
technology acquisition experiences in Asia and elsewhere. This lack of dynamic protectiveness has
profoundly hampered Africa’s unenviable endeavours at technologization.
This paper attempts to analyze the two views cited above. The discourse is structured as follows:First, the paper describes the controversies surrounding the technology transfer issue, and thenproceeds to discuss the various established modes employed in that transfer. Second, the paper not
only examines the technology transfer commitments made by the industrialized countries as embodied
in a selected number of international agreements and conventions, but also seeks to understand
why the powerful signatories have largely failed to fulfil their side of the bargain. Third, the discourse
reflects on several insightful international experiences on this score, and in this context, proceeds todistil the main determinants of a successful technology transfer process. Finally, the paper dissects
some African cases in a bid to reveal both problems and prospects of technological change. In
conclusion, strategies are proposed, including the potentials offered by the information andcommunication technologies (ICTs) in enhancing the robust technologization of the region.

1

2.

The Technology Transfer Process: Concerns,
Contentions and Controversies

Early technology studies focussed considerable attention on the issue of technological transfer andhow it generated dependence. Within that purview, several observers raised concerns about thewide range of constraints that governed the flow of technology from the North to the South. Technology
transfer relations came to be seen in commodity terms, though the tool of cost-benefit analysis
shifted emphasis from sterile analysis to a more critical assessment of the phenomenon.
In the 1970s, UNCTAD initiated a series of steps on regulations of technology transfer. A code cameinto being in 1977 to govern techno-global intercourse, one that sought a more equitable conduct inthe technology trade. Unfortunately, this model continued to perceive developing countries as passive
receivers of technological innovations. Yet forces were at work, at both the domestic and global
levels, that affected the evolution of technological capabilities in developing countries.
2.1

Technological Capabilities and the Transfer Process

In 1974, in the wake of sharp international disparities in economic power, industrialization andmaterial welfare between the North and the South, developing countries began to voice major
concerns about the injustices in the global economic system. They argued that the global structuresand institutions of trade and exchange were lopsided, and stacked against the development of theso-called Third World countries. In solidarity, the developing countries called for a New International
Economic Order - a series of demands and proposals meant to restructure global economic relations
for greater equity among nations.
Developing countries suggested fundamental reforms in the global order and asked for major
concessions from the North. Apart from the broader issues of trade, aid and the international financial
system, an area of central concern to developing countries was access to foreign technology.
Connected to this vital question was the role of Transnational Corporations (TNCs) in the transfer oftechnology. To assist in this process, developing countries demanded the preparation of a Code of
Conduct on Transfer of Technology and also the formulation of the Draft Code of Conduct forTransnational Corporations.
Both these documents illustrate the importance attached to technology issues by developing countries
in the economic process, and how the central agents of technology production, ownership, andcontrol — the TNCs —— could be regulated to maximize benefits in the South.

2T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

3

However, despite the growing recognition of the importance of technology to developing countries(DCs) and the intensifying internationalization of communication between states, the transfer oftechnology from the industrialized countries has been insignificant.
Two issues are said to be at the heart of this paltry flow.1 First, is the concern that developing
countries have found it difficult to secure access of ICTs because of the severe terms and conditions
tied to the technologies. The nature of the international patent system, the limited access by DCs topatented and non-patented technology, the massive restrictions imposed on transferred technologies,
and the overwhelming control by TNCs over technology flows, are all prohibitive to developing
countries.
Following the apparent success of OPEC, in the immediate aftermath of the 1973 energy crisis,
many developing countries began to forge new alliances in their bid to secure benefits from aninternational system which in their perception perpetuated sound and economic injustice. To alarge extent, the new status of OPEC created the circle to confront the system through organizedcompromise. The huge inflows of petrodollars for oil-producers dramatized the vulnerability of theexternal factor, and how organized responses to it could generate benefits of the OPEC-kind, andminimize both dependence and widespread malaise in developing countries.
Disillusionment with the prevailing global economic system could be traced to the development
failures which marked the first UN Development Decade. Economic strategies designed to reducepoverty, foster industrialization and enhance standards of living failed to fulfil the rising tide of
expectations. Above all, the promise of sustained benefits expected from freer international tradeand based on neoclassical market notions did not generate the predicted changes. The global
economic system policy-makers in the Third World continued to reflect upon the structural rigiditiesof the global economic system, which they blamed for much of the slow progress and pace oftransformation.
The urgings for a New International Economic Order (NIEO) in 1974 were seen against thisbackground of mounting disenchantment. The new demands clearly identified the world environment
as the villain, and sought to restructure that environment for any meaningful development to takeplace. Contents of the NIEO agenda illustrated the central “environmental” concerns in international
relations, which included a renegotiation agenda on debts, terms of trade, market access, International
Monetary Fund (IMF) reforms, and development assistance. All these facets are strongly external inorientation, and point to the concern that prevailing conditions in developing countries are externallyinduced.

See Singer, H.W. (1988) “Transfer of Technology. A One-way street” in H.W. Singer, N. Hatti, and R. Tandon (eds.)
Technology Transfer by Multinationals, Ashishi Publishing House, New Delhi, p.4.
1

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ATPS SPECIAL PAPER SERIES N O. 21

Formal endorsement of aspirations by the UN General assembly in 1974 was followed by a newwave of technological demands that cited a critical imbalance between developing and industrializedcountries in the transfer process.
There was an argument, widely shared, that the world system perpetuated technological dependence
of developing countries on industrialized states even though the achievements of science andtechnology were regarded as the “common heritage of mankind” a public- good image that became
increasingly untenable under the intellectual priority system. A spate of emerging studies provided anabundance of riveting data that gave the challenge an aura of statistical and moral justification. In the
1950s and 1900s, the dependence theorist and ECLA studies had stirred controversy and generated
consciousness in many developing countries. New research findings gave extra visibility to the starkdifferences in income, trade, financial flows and balance of payment. The most conspicuous agent
in international trade was the Multinational Corporation (MNC), characterized by a world-wide networkof operations and global control of technology and its benefits.
It is against the background of international disparities in technological control and in the disparities
in the distribution of economic benefits that developing countries launched a major drive in 1974 tosecure advantages from a lop-sided global system. In May that year, negotiations began for theformulation of a code of conduct on the transfer of technology under the auspices of the United
Nations Conference on Trade and Development (UNCTAD).
Vaitsios’ study (1974) demonstrated that industrial investment activities in developing countries werelargely characterized by MNC involvement. Direct Foreign Investment (DFI) was the predominant
form of technology transfer though other mechanisms like licensing or management existed. The
study argued that existing modes of the technology transfer process were costly and overpriced; andthe technology transfer process was owned by multinational subsidies dominating the local market.
At the same time, technology transfer was restricted from involvement in defined areas and markets.
Vaitsios (1974) also stated that transnational transactions were characterized by significant capital
repatriations through transfer pricing.
The issue of inappropriate technology with respect to developing countries was given prominenceby Stewart (1973) when linking the choice of product and the technique available to produce it. In
other words, the choice of technique and its characteristics is a mere fall-out from the choice of the
product.
Second, the transfer process has also posed problems to developing countries in view of theperceived
disjunction and dysfunctional anomalies of the ICT in a Third World environment. It has been argued
that given the specific factor endowments, the technology developed in ICTs has limited relevance,
suitability or even appropriateness in a recipient developing country.
These explored themes brought to the fore two critical interrelated concerns. First, a number ofpolicy studies addressed the issue of relevance of MNCs in the industrialisation and technology
transfer context of developing countries. Farell (1979) asks whether MNCs transfer technology at all,

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

5drawing distinctions between state and dynamic technology on the one hand, and consumption andproduction technology on the other. Vaitsios (1974) even questions the appropriateness of the word
‘transfer’ used in technology transactions, and observes that the knowledge transferred in mostcases covers routine operations. This issue of relevance also highlighted the appropriateness of thetechniques of production employed in the light of resource endowments of developing countries.
Neo-classical economics assumed the existence of an infinite range of techniques available withvarying combinations of capital and labour, but the capital intensive technologies introduced indeveloping countries conflicted with the labour abundant requirements for appropriate technologies.
Stewart (1973) argues that the neo-classical framework is empirically misleading, in that all techniques
are available that would guarantee, for any relative and absolute factor endowments, full employment.
She observes that:“Historical analysis of the development of techniques suggests a far more limited range of efficienttechniques than that suggested by the neo-classical approach” (1973:117)

Sen (1979), operating within the neo-classical assumption, argues that there exists a single optimum
technique of production that maximises output, employment and savings per unit of investment. The
question of choice is therefore illusory on account of this view of technological determinism.
Appropriate technology became the new catchword in the lexicon of technology transactions for
Third Word countries. The concept came to refer to labour-intensive, low-cost, small scale, basic
needs-oriented technology, a kind of “….technology mix contributing most to economic, social andenvironmental objectives in relation to resource endowments and conditions of application in eachcountry… An important overall objective of appropriate technological choice would be theachievement of greater self-reliance and increased domestic technological capability, together withthe fulfilment of other development goals.”2
Schumacher (1973) employed the term intermediate technology, which he defined as:“…Equipment cost per workplace … (which) would fit much more smoothly into therelatively unsophisticated environment in which it is to be utilised. The equipment
would be fairly simple and therefore understandable, suitable for maintenance andrepair on the spot. Simple equipment is normally far less dependent on raw materials
of great purity or exact specifications and much more adaptable to market fluctuations
than highly sophisticated equipment. Men are more easily trained, supervision,
control and organisation are simpler; and there is far less vulnerability to unforeseen
difficulties.”3

2
3

UNIDO (1978), International Forum on Appropriate Technology, Vienna, p.23.
Schumacher (1973) Small is Beautiful, Bloud and Buggs, London, p.151.

ATPS SPECIAL PAPER SERIES N O. 21

6

The earliest concerns over appropriate technology, therefore, focussed on choice of technique inrelation to resource endowments and unemployment. According to Kaplinsky (1978), this scope has
a limited vision, and analysis of appropriateness should encompass technological self-reliance,
indigenous participation and economic restructuring to reduce income inequalities. Muller (1980),
however, is critical of the concept in general, and argues that it reflects a way of thinking rather thandefining a specific set of technologies. Despite this objection, the concept enhanced understandingof technological search processes, and contributed a theoretical angle to the perspective oftechnological development at large. But more important, it sensitised some aid and UN-agencies
about basic need demands of developing countries. New regulations and mechanisms were instituted
to influence the conduct and behaviour of MNCs and to ensure the extraction of maximum advantages
in the distribution of costs and benefits. The formulation of the Code of Conduct for Transnational
Corporations and the Code of Transfer of Technology are aspects of response to policy studies thathighlighted the link between MNCs, choice of technique, and appropriate technology.
According to Alam and Langrish (1981), developing countries should establish stronger links with
non-multinational firms as alternatives to MNCs in the transfer of technology. Advantages include
lower rates of royalty, less equity participation and the tendency to use less elusive and more diffusedtechnology.
2.2

Technology, Technology Policy, and Technological Change

To understand how the forces conditioned and shaped the technology transfer process, it would be
instructive to first appreciate technology’s real meaning, on the one hand, and its strategic significancein the context of development, on the other.
Technology is knowledge related to production, distribution, products, processes, repair,maintenance, and so on. Bell (1984) views technology from three levels: first, technology is embodied
in the capital goods, engineering and managerial services, product and process capacity, or creates
new production facilities. Second, it includes knowledge and skills related to operation, maintenance,
and the repair of production facilities. This category is further broken down into paper-embodied
and people-embodied technology, the former referring to knowledge codified in manuals, blueprints,
books, operating procedures, flow charts and so on, while the latter consists of knowledge, skills,
experience, and expertise embodied in people involved with the production capacities in all theirdiversity. Third, it consists of knowledge, skills, expertise, and experience used in generating andmanaging technical change. This last category is distinguished from the previous two in that it
focuses on either incremental or radical innovations, or both. Pavitt (1985) observes that technology
can also be tacit, uncodified, and cumulative within firms.
As regards the ambition to achieve technological advancement, Basalla (1988) has advanced six
major assumptions. Technological progress has:4
See Basalla, G. (1988) The Evolution of Technology, Cambridge University Press, London, p.211.

4

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

7(i)accelerated the growth of civilization by bettering our material, social, cultural, andspiritual existence;(ii)
led to decisive improvements in the products we use;(iii)
succeeded in giving man mastery over nature, thereby serving human interests
and aspirations more broadly;(iv)
made it possible to undertake activities with greater speed and efficiency by
exploiting new sources of power;(v)
brought within human control the origin, direction, and influence of technologicalchange; and(vi)
received credence from the evidence that western industrialized countries havereached the highest stage of civilization from technology.
If, as discussed above, technology is that strategic and a decisively significant variable, theneconomies wishing to promote prosperity, engender sustainable livelihoods, and enhance dynamic
development would have to devise ways of coming to terms with this phenomenal imperative. This
is where technology policy looms into relevance. Technology policy is defined here as the consciousand deliberate manipulation of budgetary and other resources to influence the rate and direction ofdomestic technological change. Technological change can also be spurred by science policy,
which the author defines as the conscious and deliberate manipulation of budgetary and otherresources to influence the rate and direction of inventiveness in an economy. If a system can translatescientific discoveries into tangible commercial innovations, then the frontiers of technological change
would have expanded with all the attendant consequences this change would entail. But science
policy, though instrumental, is not of concern here because the focus of this exploration is technology
transfer and why Africa has generally failed in systematizing, institutionalizing, and entrenching theprocess of domestic technological change. Africa can cite many compelling cases of technologicalsuccess, but in the grand totality of temporal and spatial technological concerns, such triumphs are
too few. Therefore, it is vital to understand the causes responsible for this dismal state of technologicalaffairs in the region.
Djeflat (1988) states that trade in technology has been analyzed according to two approaches thathave offered limited insights to policymakers and decision makers. The first approach has treatedtechnology as though it was like any other traded commodity, while the second has viewed its
exchange as complex and onerous to fathom. Both these perspectives have failed to appreciate theidiosyncratic and unique features (for example investments in its production, ownership, and so on.)For this reason, these approaches have been poor in unearthing and analyzing key issues associatedwith technology and its transfer. 55

Djeflat, A. (1988) “The Management of Technology Transfer: Views and Experiences of Developing Countries”

ATPS SPECIAL PAPER SERIES N O. 21

8

African governments have virtually never invoked crucial technological dimensions, either
systematically or proactively, as strategic targets to guide techno-industrial change. This has been
all the more disappointing considering that most African states have Science and Technology Policy
frameworks which appear as Acts enacted by national parliaments.
The role of a technology policy framework is to systematize and institutionalize the process oftechnologization, i.e., to steer, direct, and guide economic investments in ways that ensure theoperationalization and conscious integration of technological imperatives in the development process.
But to do this, policymakers would need to be fully aware of the broad manifestations of theseimperatives, and what they should regard as strategic targets when engaged in a technology transfer
transaction. The targeted variables referred to as technological targets and technological dimensions
interchangeably.
Some Key Technological Dimensions
·
·
·
·
·
·
·
·
·
·
·

Packaging, fragmentation and constituent elements
The level of the acquirers’ consciousness with respect to this diverse discretenessThe prospects for introducing local inputs and enhancing domestic content
The kinds of unpacking which an acquirer can potentially exploit during the pre-investment,
project execution and project implementation phases; and experience and knowledge inadapting technology
The degree of interaction between the acquirer and supplier of technology, the competenceof negotiating parties; and the nature of the contractual agreement
Packaged or unpackaged contracts
The nature of the importing entity (private or public)
The party or parties responsible for putting the project together
The supplier’s and acquirer’s freedom to determine and make choices
Locus of control over the implementation of the project; the right to select subcontractors
and partners
The extent of participation and involvement of local players in decision-making – peripheral
role (administrative aspects) or technological decision-making; and the depth of involvementof the acquirer during the preparatory phase of a technology transfer transaction.

2.2.1

Modes of Technology Transfer

Technology transfer would refer to a process of accumulation of skills and know-how by a receiving
economy in the wake of flows of investments, equipment, machinery, and requisite services. It entails
the build-up of indigenous capacities from the knowledge and capabilities possessed by technology
suppliers. Technology transfer can proceed via various channels, the most widely known being
direct foreign investment. This could take the form of foreign–held equity (traditionally less than 50

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

9%) or non-equity investments. Perhaps the least known mode of transfer has been technical assistanceat the level of bilateral relations. But many more non-equity channels have existed such as: outrightpurchases of machinery, equipment, and plant facilities; licensing and know-how agreements; service
and management contracts; leasing and sub-contract arrangements; and joint ventures and turnkey contracts.6
At least three broad levels of technological capabilities have been identified: production, investment,
and innovation capabilities.7 Production capabilities refer to the accumulation of skills andcompetences crucial for operating, maintaining and running production facilities. On the other
hand, investment capabilities refer to the know-how that enables an economy to design and replicate
production facilities domestically or abroad. Finally, innovation capabilities refer to the skills,
knowledge, and ability to improve and modify production facilities in the direction of greater resourceuse efficiency and higher domestic content.
It is vital to point out that technology transfer cannot be said to have taken place if a domestic
economy fails to acquire some of these capabilities. For instance, a country can experience
industrialization without effecting technologization. Foreign direct investments underpinned by equity
and involving the contractual use of trademarks would involve no technology transfer. The process oftechnologization would entail the substantive evolution of indigenous capacities.
In the 1960s and 1970s, many developing economies witnessed significant inflow of foreign direct
investments. To a large extent, these inflows entailed the establishment of manufacturing facilities
manifested by movement of capital equipment and machinery to host countries. By mid-1970s,
however, several keen developing country analysts began to scrutinise the contribution of numerous
technology transactions to national economic development. For all practical purposes, the results
showed that the flows had little development impact.
There were deep-seated anxieties regarding the patent system especially its failure to promotetechnological development in Third World countries.8 In fact, the argument was that patents tended
to preserve import monopolies, militated against the working out of inventions, and constrained
licensing agreements.9 At any rate, the intellectual property regime was believed to undermine thepotential evolution of domestic techno-industrial capabilities.”10 In particular, the analysts expressed:“..concerns over the increasing burden of royalties on the balance of payments, therestrictions imposed upon recipients, and the widespread use of terms and conditions
which were believed to reduce the national potential for the development of scientificand technological capabilities.”11
See UNCTAD, Trade and Development Report, (1987), Geneva, pp.92-93.
See Kim, Westphal, and Lee (1984).
8
Ibid, UNCTAD, 1987, p.107.
9Ibid, UNCTAD, 1987,p. 107.
10
Ibid, UNCTAD, 1987, p. 107.
11
Ibid, UNCTAD, 1987, Trade and Development Report, Geneva, p.107.
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ATPS SPECIAL PAPER SERIES N O. 21

10
As such, many developing countries:“are established …screening procedures for foreign investment and /or transfer of technology…put[ting] emphasis on controlling the costs incurred by the operation of foreign firms…particularly
those limiting the remittances arising from foreign direct investments and payments for royalties andthose restricting payments over excessively long periods or excessive prices in general…”12

The mechanisms of technology transfer are many, and the institution that has played a prominentrole in the process has been the TNC. The modes include: DFI, turnkey projects, product-in-hand,
technology licensing, and technical and management contracts. Each one of these is examined
below.
Outright Purchases
Outright purchases refer to a mode of technology transfer that involves the complete procurement of
hardware (equipment and machinery) by a domestic importer. The acquirer of technology negotiates
a purchase price with the overseas supplier who assists the former in executing and implementing
the project. The buyer attaches local manpower to all foreign experts in a bid to absorb skills along
the technology transformation chain. If this transfer of skills and knowledge is part of the contractual
arrangement, the technology supplier would invariably charge a relatively high price for an outrighttransaction.
Technology suppliers who subscribe to this type of transfer would often be the ones not encumberedby proprietary restrictions. They would be owners of a technology whose patent has expired or is juston the verge of expiry. Owners would not generally permit outright sales for technologies associatedwith trade secrets - know-how that is viewed by the proprietors as confidentially strategic. Suchknowledge is deliberately left unpatented for reasons of self-interest; in particular, the maximizationof returns.
Outright purchases of capital and intermediate goods have been pronounced for those technologies
with readily absorbable engineering-based know-how. However, overseas proprietors have beenreluctant, and even unwilling, to transfer product and process technologies that are sophisticatedand complex. In cases where negotiations to effect outright sales with patent transfer have evenbeen entertained, the owners have specified prohibitively onerous terms and conditions. Consider,for instance, the situation occasioned by Japan’s desire to secure a chemical technology to
manufacture acetic acid. The German company imposed severe terms that included a colossal
down payment for patent transfer, receipt of a royalty rate for 10 years pitched at 5 % of the production
cost, and territorial restrictions on sales. Generally, this tendency has been predominant among
manufacturing enterprises employing technology-intensive innovations. Therefore, outright sales of

12

ibid, UNCTAD, 1987, Trade and Development Report, p.107.

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

11

technologies have been very rare in organic chemicals; plastic materials; scientific, medical, andoptical instruments; machinery for specialized industries; non-electrical machineries; and electrical
power machinery and switchgear.
Direct Foreign Investment and Joint Ventures
In a new world order characterized by the deepening economic liberalization, the establishment of
DFI in developing countries is expected to increase for two main reasons: one, because TNCs
prefer the DFI mechanism to avoid transaction and enforcement costs invariably associated withother technology transfer modes; and two, because investments abroad have jobs-creating potential
in home environments.13 The push for DFI is likely to receive additional governmental impetus asOECD countries are plagued by high rates of unemployment. In the 1980s, DFI outflows increased
significantly. Alter (1994) has observed that:“.... DFI outflows are frequently welcomed as promoting the national interest by helping domestic
firms conquer global markets and secure increasing technically advanced, well-paying jobs forskilled workers at home”.14

Additionally, though many writers use the term DFI to describe flows of investment resources todeveloping countries or elsewhere, the meaning has shifted considerably over the years. The
traditional meaning of DFI refers to the establishment in a host country of a wholly-owned subsidiaryof a TNC. Yet, many writers use DFI even when describing joint-ventures. Joint ventures can takemany forms and may sometimes include a licensing component as well. Fukasaku (1994), forinstance, employs the term without clarifying its meaning in the context of China’s phenomenal
growth since 1978.15 In reality, China has demonstrated a preference for joint ventures and hascompletely ruled out wholly foreign-owned subsidiaries.16 Most observers are left with an impression
closely associated with the traditional meaning of the term when the acronym DFI is used.
DFI in Korea accounted for below 10% of total inflows of foreign capital as it deepened its
industrialization.17 For other mechanisms of technology transfer, the flow of investment resources
was heavily characterized by debt and not equity.18 However, it is essential to note that DFI may not infact be accompanied by the actual flow of investment resources into a host country. Some technology
may be transferred even though the largest proportion of the capital itself could be raised from thehost’s environment.19 In the case of China, for instance, wholly foreign-owned subsidiaries werediscouraged. The country preferred joint ventures in the acquisition of technology, 20 and in somecases, the licensing arrangement was made part of the joint venture deal.21

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Joint ventures, which the author defines as investments established collectively by governments andparticipating foreign firms according to an agreed equity-holding partnership, were devised to promote
the industrialization of African economies.
DFI has been a predominant mode of technology transfer for many developing countries. Under thismechanism, a foreign firm, often a multinational company, establishes a subsidiary in a host economy(in, say, an African country) to produce goods and services for a promising or captive market. The
desire by African leaders to rapidly industrialize their economies lay behind the governments’orientation to embrace the strategy of import substitution industrialization (ISI).
Transnational corporations prefer the DFI channel of technology transfer, even though the technology
licensing system is clearly the most crucial to developing countries as far as building domestic
technological capabilities is concerned. The reasons for this behaviour are firmly located inappropriability theory. TNCs find licensing contracts very problematic to negotiate and enforce. As
such, rather than contract at arms length, the TNC would prefer to establish hierarchical links with asubsidiary in another country. Since market transactions (licensing) generate enforcement costs for
TNCs, economic liberalization is likely to be exploited by them to establish hierarchical links throughthe channel of DFI.
But the DFI channel has several deep disadvantages to a developing country. 22 First, experience has
shown that this mode is associated with limited or no generation of domestic technological capabilities
in host countries. Indeed, technological decision-making is entirely in the hands of the overseas
partner. Second, and related to the first, the involvement of a local partner is restricted to peripheral
aspects of the technology transfer process and the technology transformation process. Third, because
the foreign partner ensures that all major decisions about the transfer process reside with the parent
company, knowledge about the core technology is never imparted to locals. Finally, since existing
domestic technological capabilities are not utilized by the TNC subsidiaries through subcontracting
arrangements, linkages with the domestic economy are usually very weak. The cumulative impactof all these factors is a degree of employment creation limited to the subsidiary itself.
China’s conception of DFI has taken the form of joint venture agreements with foreign firms and has
been driven by a strong indigenization policy. The agreements are underpinned by an indigenization
policy which exerts pressure on DFI to exhaust domestic sources of inputs first before importing
equivalents from abroad. Since 1978, the country has changed the composition of its exports,
specializing more broadly on labour-intensive products. In recent years, exports of footwear, travel
goods, textiles, clothes, chemicals, watches, toys and a whole range of simple electrical products
have constituted over 30 % of China’s total merchandise exports. Considerable strides have also
been made in the production of intermediate and capital goods catering for a growing internalmarket, namely, iron, steel, machinery and transportation equipment. Before producing exports,
China studied the international market environment for various products very closely. The policy
reforms that were introduced took the potential demand into account, and deliberately guided themarket system to become more integrated and allocate resources more efficiently.

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

13

In Kenya, massive concessions were extended to foreign interests to set up manufacturing facilities
that they physically owned. These favours, which were staggeringly licentious in both range andpervasiveness, were not underpinned by technological considerations. Because they had notechnological content whatsoever, Africa’s formative industrial phase was deprived of the opportunity
to forge the nascent foundations for domestic technological change.
To cite an example, consider the DFI by Firestone, in particular, the concessions granted to it by the
Kenyan government in 1968. They included:
·
·
·
·
·
·
·

“a quota restriction of tyre imports from outside E.A. in accordance with a formulation
stipulated by Firestone USA;a total ban on imports of tyres (that) Firestone would from time to time notify the governmentof its intention to produce in Kenya;unrestricted import licenses (including the availability of necessary foreign exchange) for
construction materials, equipment, machinery, spare parts, or raw materials;
exemptions from import and customs duties and from any other tax for items imported by
the company;
unrestricted export licenses and total exemption from export duties;
freedom to use its own pricing formula in the sales of its protected products;
a commitment by the government to ensure that its departments, including the armed
forces, purchase tyres from Firestone (E.A.) Limited and also ensure that the firm secured
monopoly rights to supply its tyre products to any enterprise established in Kenya for theassembly of motor vehicles.”23

From a cursory glance of the concessions, it is evident that the policy to industrialize embodied notechnological content. Hence, the DFI approach that was effected in the context of the ISI strategy
was not instrumental in initiating a promising process of building and strengthening domestic
technological capabilities. This point is made on account of the realization that the Firestone
investment was a freak exception but a reflection of systematic patterns underpinning Africa’s
technological experience.
In many respects, the ISI-driven DFIs contributed to Africa’s heavy debt servicing burden. If thesearrangements had been conceived in the context of a long-term policy to develop local technologicalcapabilities, then the severe balance of payments problems which the DFIs aggravated would havebeen blunted appreciably.
DFIs are also not likely to complement any local efforts to promote and deepen domestic processesof technological change. For instance, it is common knowledge that foreign subsidiaries not only
tend to shy away from applying local research and development (R&D), but also brazenly appropriate
whatever innovations are generated by local talent.
Admittedly, these ISI-driven direct foreign investments did build some technological capabilities, but
because the overseas interests were predominantly interested in profit maximization, the DFIs could

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not promote domestic technological change because their activities were largely characterized byvery low domestic content, limited forward and backward linkages, transfer pricing, heavy relianceon foreign experts and managerial personnel, low levels of domestic subcontracting, minimum useof resource-based inputs, and so on.
Western circles are concerned about determined opposition to certain forms of foreign investment
in many developing countries as liberalization takes root. A strong nationalistic ferron runs throughthe arguments raised by policymakers in DCs. The purer version of DFI, where a transnational
company establishes a subsidiary in a reform- implementing country with very limited shareholding
by locals in the host’s environment, generates anxieties among citizens that their economy isincreasingly coming under the control of foreigners. These fears are real when one appraises thecharacteristics of DFI in all their diversity.
It is vital to note that Japanese direct investment in the Pacific Rim nations was driven by both
domestic and regional factors, the former stemming from a strategic initiative to reduce production
costs and maintain economic competitiveness in the world economy as the yen appreciated sharply
in the 1980s24. The regional factors were derived from large growing markets, low wages, and theemergence of incentives-rich policy environments in South East Asian Countries. The Japanese
Investments (usually joint-ventures) succeeded so well in building domestic technological capabilities
in the Pacific Rim nations that Japanese companies in Japan were confident enough in sourcing
components from their joint-ventures in South-East Asia. The demands of economic competitiveness,
prompted by the rising yen, have induced Japanese companies to purchase more locallymanufactured components.25
An important distinction ought to be made between economic liberalization as a process of allowing
selective investments to promote sustainable development, on the one hand, and open investmentsthat are capable of triggering environmental deterioration, on the other. GATT’s view of economic
liberalization is one where regulatory conditions to foreign investments and operations of foreigncompanies should be eliminated especially when they serve as barriers to trade. Some observers
have already expressed worries about GATT’s trade rules by noting that unregulated investments
may trigger environmental degradation as governments in developing countries are hampered intheir efforts to control foreign companies. De Bremond (1993) has lamented that unconditional
economic liberalization awards “... free rein to logging companies, toxic waste disposal companies,
and mining companies, among others, who would be free to operate in a highly unrestricted setting,regardless of the environmental impact of their practices....”26
Africa should press for forms of DFI which maximize the benefits of local resource use including theutilization of domestic technological capabilities. Any DFI arrangement that marginalizes local
competences and ignores potential domestic subcontracting possibilities is not the kind of foreign
investment Africa should encourage.

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

15

Technology Transfer through Licensing
Licensing is yet another mode of technology transfer which encompasses the flow of highly
specialized proprietary and non-proprietary information and knowledge from the owner of technology(licensor) to the receiver (licensee). This transaction effectively confers on the licensee rights andresponsibilities to exercise control and autonomy over the use of the licensed technology. Agreementsof this type have generally featured in industries and sectors characterized by complex technologyintensive production and processing systems. Moreover, they would normally not be struck at a time
when the advanced technologies are still in the formative stages of the technology life cycle, thoughowners could be driven by specific circumstances to license the sophisticated innovations.
For instance, licensors may be inspired by the calculus to secure additional earnings abroad, gain
footholds in potentially lucrative overseas markets hitherto shielded by tariff and non-tariff barriers,
derive competitive advantages in an overseas setting promising lower production costs, or seek totest the potential efficacy and prospects of new technologies. For licensees, however, the motivations
to exploit this avenue of technology transfer may rest on broader development objectives and how
potentially instrumental the technologies seem to be in the national scheme of things.
Within the licensing framework, it is worth noting that the flow of the hardware component would
generally amount to a waste of time unless the full range of the proprietary and non-proprietaryknowledge is imparted to the licensee. Such a transfer would mean the development of domestic
technological capabilities which cannot be easily realized by any other means. The licensing
agreement can assume four main forms: technological assistance contracts, patent contracts,
know-how contracts, and engineering services contracts.27 On the technical assistance agreement,a licensor would transfer specialized technical information essential for enabling a licensee tooperate and maintain the manufacturing facilities. The knowledge under this instrument has nothingin common with information embodied in know-how and patent contracts. But its worth is considerable
because it enables the licensee to acquire short-term services that will empower him to “…establish
manufacturing facilities rapidly and economically and to exploit markets effectively.”28 Moreover, itcommits the licensor to offer continuing services, a long-term effort designed to help the licensee
build manpower resources to ensure enhancement of manufacturing performance, marketing, andprovision of customer service.
The contents of technical assistance contracts include knowledge about consulting and engineering
services. The consulting services comprise the following:29
·
·
·
·
·
·

assessment of markets
definition of products
consulting services covering the assessment of markets
definition of products
investment analysis
ensuring raw materials availability

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16
·
·
·

recommendation of plant location
choice of technology
identification of equipment suppliers

The continuing services covered by a technical assistance agreement include:30
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·

definition of product (product design, specifications, quality, range, as applicable)plant capacity (and in chemical plants, operating range)
supply of licensor’s technical personnel for construction, supervision, plant start-up, andstabilization of operations
training (local and overseas) of client personnel in production operations, maintenance,
marketing, accounting, etc.
assurances on supply of pre-processed materials, preassemblies, components over which
supplier has predominant control
preparation of literature on operation and maintenance of plant, product specifications,
technical service manuals (customer), sales data sheets, etc.
quality control procedures and in-plant inspection standards
productivity standards and aids to product costingoverseas testing services for raw materials, product, etc.
assembly diagrams and drawings for mechanical or electrical products
pricing basis for use of overseas personnel and for the supply of items
communication of product and process improvements
where an independent third-party engineering firm is involved in plant design and construction,
express provision that supplier technical assistance will provide supervisory services
performance warranties
supplier’s liabilities in relation to plant performance
remuneration for services
provision that remuneration to supplier is for technical assistance“linkage” to other agreements
governing law agreement

Despite the enormous technological potential furnished by this mode, Africa has generally not used
it to stimulate the development of domestic technological capabilities.
The patent license agreement is a binding contract between the owner of a patent and the licensee
outlining the rights, responsibilities, duties, and obligations of the contracting parties (patentee andlicensee) with respect to the use, sale, or manufacture of an invention by the licensee. Under suchan agreement, the licensee secures legitimate access to technology, requisite technical assistance,and markets, but this does not grant him the patent rights. In general, the licensee derives thefollowing advantages:31

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

17(a) The licensor’s explicit statement that he has registered patents in territory covered by theagreement and bearing on its subject matter(b) The licensor’s listing of the patents that have been issued, their dates of registration andunexpired life(c) Particular listing of all the licensor’s patents in countries for which the licensee has negotiatedexport rights(d) Express statement by the licensor granting rights to the licensee to operate under suchpatents and enumeration of licensed rights (i.e. the “make, use and sell” rights) thereunder(e) Acceptance by the licensor of the responsibility for acting to stop infringement in the licensee’snational and export territories and for undertaking such efforts at his own (licensor’s) expense
or at an expense shared by the licensee and licensor are matters for negotiation(f) Representation by the licensor that licensed patents do not infringe on third-party patents orrights, and if courts find to the contrary, to absolve the licensee (indemnify licensee) of any
and all damages, financial or otherwise, that may arise from such infringement (these are
the so-called indemnification and “hold harmless” clauses)(g) Release of the licensee from patent-related obligations, including royalties applicable, if for
any legally determined reason the patent ceases to have validity in the licensed territory(h) Agreement by the licensor to keep all licensed patents in force throughout the life of thepatents by paying applicable registration fees and meeting other legal-administrativerequirements pertaining thereto(i) Agreement by the licensor to grant the licensee the right to patents throughout their life, evenafter the agreement expires(j) Agreement by the licensor to grant the licensee any more favourable rates than granted toother licensees with whom the first licensee may compete(k) Agreement to grant rights under improvement patents with no increase in the royalty rate
Again, despite the profound technological prospects offered by this mode, Africa has had no systematic
tradition of exploiting it to build domestic technological capabilities in the industrial sector.
Licensing of technology can also be effected through a know-how agreement. Know-how refers to abody of industrially useful, valuable and secret information which a patentee has generated andaccumulated through practical experience. It includes skills and knowledge that is tacit and uncodified
that the licensee evolved over time as he worked out his patent. So important is this knowledge fromexperience that no marketable product can sufficiently and adequately be manufactured without its
invocation. Often, the information is held in secret essentially because it confers those possessing itwith production and other vital advantages against competitors, real or potential.
Though very significant, know-how has been found unpatentable due to the fact that the crucial
information (knowledge, skills, and experience) fails the technical test of novelty. Yet, a licensor
enjoying tangible benefits, for example, a qualitatively superior product, lower production costs,
reduced investment levels, and so on, would state that he possesses “novel, valuable, and useful”
knowledge. If a potential licensee is able to confirm the claim, then a contract can be signed that

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grants the licensee the right-of-use only. In return, he will be legally bound to strictly adhere to aconfidentiality clause that obliges him to keep the information under wraps for a specified period.
Unfortunately, know-how agreements have generally imposed severe restrictions on licensees. They
require that:32(a) The licensee does not have the exclusive right-of-use to know-how, i.e., the licensor retains
all rights to license others as well as to use it himself, both in contract and non-contract
territories. Exclusive rights to make, use, sell or import are separate rights, which the licensor
may grant selectively(b) The licensee can use the know-how only in the territories specified in the agreement(c) The licensee can use the know-how only in the field set down in the license agreement, i.e.,
he cannot use licensed know-how for manufacturing products not defined in the agreement(unrelated products usually). The reasonableness of this restriction is sometimes tested
even in the courts of developed countries(d) The licensee can use the know-how only at the site (or sites) of manufacture identified in
the agreement(e) The licensee cannot use the know-how to produce the licensed product beyond the capacity
authorized in the agreement; the licensee also cannot expand the plant, or production,
through use of licensed know-how without the licensor’s express authorization.
(f) The licensee does not have the right to sublicense know-how to others(g) The licensee can provide access to know-how only to persons identified in the agreement,i.e., use by only the persons concerned (rights of access to and use of can be defined as
separate rights)(h) The licensee and others permitted access to know-how must contractually agree to maintainthe designated information in confidence for the period agreed to (this secrecy period can
extend beyond the period of use)(i) The licensee’s right-of-use to know-how is limited to the duration of the agreement; theright-of-use ceases thereafter; (as in item ©, this issue arises even in developed countries)(j) The licensee cannot commercially employ any improvements he may make on the knowhow without communicating them to the licensor and transferring the right-of-use to thelicensor, free of cost (and other obligation)
From a brief overview of the know-how agreement, it is clear that this mode of technology transfer istechnologically constraining. The constraints include exclusivity of use, territory of use, field of use,site of manufacture, volume of production, and right to sublicense.33
Yet the know-how mode has been used very widely by Africa. This can be explained by the fact thatmost local investments employing foreign technologies have had to sign know-how agreements
since these were integral components of the technology transfer process itself.

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19

Finally, technology transfer through licensing has been realized using the engineering services
agreement. This instrument specifies the technical work to be undertaken by the supplier ofengineering services. A key concern in the contract has generally centred on the need to define
clearly how the responsibilities would be divided between the licensor and the client. Such a division
would also specify the range of mutual obligations. Traditionally, activities under the engineering
services category have included:“…assessing raw materials, locating and preparing the plant site, recruiting personnel,
obtaining government and municipal clearances, procuring construction materials
and equipment, inspecting local and foreign-made equipment, constructing buildings,
installing machinery, training operators and commissioning the plant.”34

Other critical engineering services have been identified in the technical assistance part covered
earlier (see discussion on continuing services).
The centrality of these services cannot be overemphasized. African economies that are serious
about building and strengthening domestic technological capabilities cannot afford to ignore thesefundamental dimensions. Yet, experience has shown that most governments in the continent have
granted total responsibility over the services to overseas licensors. Leaders have failed to appreciate
the strategic worth of these services in promoting domestic technological change.
Conversely, Korea has been able to build domestic technological capabilities from borrowed
technologies by relying significantly on the licensing system. Japan has served as Korea’s principal
source of technology using this mode.35 For most of the Pacific Rim nations, Japan transferredtechnologies through joint-venture arrangements or outright sales of technology. Many joint-ventures
had a component of licensing in them; for outright sales, licensing was almost automatic as theJapanese firms supplied pre-investment project execution and project implementation services.36
The licensing of technology derives wide-ranging benefits in the transaction, namely, an opportunity
to avoid costs associated with technological development (product or process), avoidance of legal
battles with firms whose technology could have been pirated instead, and using a technology that isalready well-received, thus enhancing the licensee’s image in the market place.37 But more
importantly, the fact that licensing as a transaction process can be realized without the seller
participating in the recipient’s production activities enhances the latter’s capacity to build domestic
technological capabilities. As opposed to DFI in the traditional meaning of the word, technology
licensing puts the licensee in a vintage position to evolve local competences. Indeed, the licensee
is compelled by circumstance to learn as much as possible about the technology. The learning
process leads to the accumulation of technological capabilities.

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2.2.2

Packaged and unpackaged contracts

Broadly speaking, the process of technology transfer involving foreign suppliers and domestic clientshas assumed two generic configurations, namely, packaged and unpackaged contractual forms.
Packaged contracts refer to agreements that facilitate the flow of completely integrated technologicalentities. The various components are all wrapped up together in one combined unit and received by
the client as a compact whole. Two types of packaged systems have been identified, turnkey andproduct-in-hand. In a turnkey arrangement, the entire investment project (from pre-investment activities
to commissioning) is undertaken by a foreign supplier. He is solely responsible for putting up thefacilities from start to finish and in all their diversity. Once through, he would conduct test runs toestablish whether everything conforms to the set standards and performance criteria. Only then will
he proceed to hand over the keys to the client for production to commence.
On the other hand, the product-in-hand contract, while sharing all the attributes of a turnkey
arrangement, also includes preliminary involvement by the foreign supplier at the management andoperational levels. This is designed to develop local production capability.
In contrast, unpackaged transactions refer to technology transfer practices that decompose atechnology into its basic constituents and then permit individual flows to the client to proceed at thisdisaggregated level. The prospects for accelerating technological change are significantly
heightened by this contract type.
Now, transfer modes that wish to maximize domestic technological change would need to do thefollowing:
·
·
·
·
·
·

Clear identification and selection of the technology in terms of type, size, appropriateness,and so on.
Selection of experts with appropriate and relevant skills to serve as consultants to undertake
pre-investment, project execution, and project implementation services
Selection of contractor(s)Formation of a competent local team to manage and understudy overseas experts
Procurement of hardware and other requisite technological components
Designing and operationalizing the implementation framework, strategy and plan.

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T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

Technology exporting firm or economy

Technology

receiving firm or economy

Technological capacity
Flow A

Hardware and services

Flow B

Operation andfor installation and start-up
maintenance of production system
Flow CTechnology capacity including design and reverse

engineering

Figure 1: Differences and Diverse Variations in Technology Transfers
Source: Technology Policy Formulation and Planning (1986) by Nawaz Sharif (Ed.),
Asian and Pacific Centre for Transfer of Technology, India.

3.
Appraising Africa’s Technological Patterns:
Domestic Shortcomings and Exogenous Constraints
The various technology transfer modes described in figure 1 served as critical dimensionsof analysis in research efforts that attempted to fathom the phenomenon of technology
transfer from the 1960s. Since independence, the development thrust of African countries
was largely informed by the strategy of import substitution industrialization. This phasewitnessed the evolution of domestic technological capabilities through two broad means:
one through direct foreign investments (DFI) by multinational corporations, and two, throughthe establishment of state enterprises (for example, in textiles, meat processing, sugar
refining, milk packaging, and so on).
On techno-industrial capacities occasioned by the DFI mechanism, most governments in
Africa offered extraordinary concessions to overseas investors.
Undoubtedly, the establishment of factories and industrial facilities (as subsidiaries of MNCs)
during this phase of import substitution industrialization occasioned the build-up of somenotable technological capacities. However, the nature of the concessions granted to foreign
investors implied that most capabilities would assume the production type, with virtuallynone established in the investment or innovation categories. The requirement by governmentsthat the DFIs comply with the indigenization policy gave training a special premium, but thisinsistence only built skills in general operation and maintenance activities, including
competence generation at some managerial levels. But it was not conceived within a more
coherent and strategic framework to build domestic technological capabilities in potentiallypromising areas. For instance, the issue of DFIs deliberately promoting domestic forward
and backward linkages was not demanded by governments. Neither were foreign investors
obliged to fulfil a set of domestic content ratios nor required to subscribe to mandatory
provisions such as compulsorily granting local firms sub-contracting engagements. In short,governments in Africa had not developed an overarching technological framework to guidethe process of technological change during the ISI phase. As such, apart from production
capabilities, virtually all other capabilities that emerged did so by default and not by design.
But even where a basic structure of provisions existed, they hardly constituted a proactive
strategy to institutionalize a process of systemic technological change. In Kenya, for instance,
the New Projects Committee (NPC) had a set of quasi-technological benchmarks to guideits negotiations with potential foreign investors. At any rate, political and bureaucratic

22

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD
interference of NPC undermined its potential to promote the process of technological change
in areas under its mandate.
The establishment of state enterprises in Africa was also an important feature of the ISI
phase. Joint ventures and turnkey mechanisms were the chief means used to build domestic
technological capacities. However, governments had not designed a coherent, wellcoordinated, and strategic technological framework to guide the process of technologicalchange in state enterprises. There was a superabundance of missed opportunities during
this period of public sector growth.
Africa has scored some remarkable successes in a few areas but the accomplishments
have, in general, happened not by design, but by default. On the whole, the process ofbuilding capabilities has often lacked a coherent teleological thrust; it has often not been
guided by a well coordinated, decidedly proactive, and holistically consistent strategic
worldview. The remarkable outcomes have largely been disparate, inchoate, ad hoc, andnon-integral in nature. They also give the appearance of having been realized incidentally
rather than having been sought after consciously, proactively, and premeditatedly.
The history of Africa on this score thus suggests that the evolution of technological capabilities
in the continent has not been an institutionalized process. Why such a dismal record?
Several shortcomings will be discussed here, including: the absence of critical input fromuniversities and policy research centres; the shortage of such dynamic centres; deficientand ineffective networking arrangements between such centres and national policy
institutions; the existence of superficial coordination mechanisms between active policy
researchers and relevant organs of government; poor conceptualization and shallow
appreciation among leaders, of the strategic significance of the technological imperative inthe development process; the allocation of meager resources (human, material, institutional,
financial, and so on) in support of technology policy research; and the rather cavalier, if not
fugitive, appreciation of the value of such research to strategic policymaking in all its diversity.
3.1

Systematic Pitfalls on the Domestic Front

The question that arises is why Africa has registered such a dismal technological record
despite the existence of formal science and technology (S&T) policy regimes, on the one
hand, and the articulation of strong official pronouncements affirming total support fortechnology, on the other hand. Why is it that African governments have not been in thevanguard of efforts to take the economic-industrial bull by the technological horns?
Several factors, both internal and external, have contributed, and continue to contribute, tothis pathetic state of technological affairs. At the outset, it should be pointed out that Africa
has suffered a severe shortage of skilled and appropriately trained manpower possessing
the kind of strategic information and relevant know-how essential for manning, spearheading,

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24

and influencing the rate and direction of domestic technological change. And where suchcompetence has existed, policymakers have tended to ignore it. Often, it has been a caseof governments failing to appreciate the strategic worth of such human capacities in their
midst.
Second, African economies have largely lacked requisite capacities to assess the merits ofwhat is locally available and what could selectively be procured from abroad. Even whencompetences of this sort exist, it has of ten not been located at the strategic echelons anddepartments of government such as the economic and development planning departments
and ministries. The limited resources are thus both marginalized and underused.
At the domestic level, the technology-importing country may be hampered by several
limitations and weaknesses. For instance, the following constraints have been observed:
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•

absence of social carriers of technology
lack of integration with national planlack of participation by all relevant institutions and stakeholders (from the private sector, civilsociety, and government) in technology policy-making processes
Absence of a technologically-skilled and informed community that is sufficiently
knowledgeable about the various aspects of the technology transformation chain
absence of a social system that duly recognizes and rewards innovators in high profile ways
lack of gatekeepers to monitor trends in the vast global domain of innovations
R&D systems plagued by inadequate funds, sparsely equipped facilities, and poorly rewarded
manpower
The prevalence of extremely weak linkages between R&D and production systems
Weak capacities to bargain effectively with respect to assessment, adaptation, absorption,
and acquisition of technologies
Lack of tools and capacities for analysis
The ministries and departments of technology are not accorded a premium and deserving
status by the political leadershipTechnology policy measures to promote the evolution of domestic technological capabilities
are often subverted by vested interests
Collusion between a predatory political elite and foreign technology suppliers. The wholetransfer process is hijacked and mismanaged under a cloak of secrecy. The under-thecounter deals are often fraudulent, tend to marginalize or underuse domestic capacities
and promote technological rip-offs and rent-seeking behaviour among the colluding parties.
The buyer of technology may lack capacity to undertake pre-investment work
The buyer of technology may be oblivious to the dynamic significance of pre-investment
activities in domestic technological capacity building
The domestic economy may be presided over by leaders steeped in ignorance about thetrue and real worth of technological change

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD
•
•
•
•
•
•
•

25

The domestic economy may be presided over by leaders who pay lip-service to official
declarations and policy pronouncements they make about technology
The domestic economy may be presided over by leaders who fail to recognize and appreciate
the true worth of valuable technological capacities in their midst
Lack or shortage of local capital resources may compel governments to secure financesfrom technology suppliers or from sources close to, or under their potential influence. This
often works to the disadvantage of the buyer.
The buyer may be poorly informed about the existence of alternative suppliers
The government may fail to spearhead the conscious application of technology policy
The domestic economy may lack or suffer shortage of certain categories of indispensable
manpower resources and, therefore, certain forms of managerial skills
The buyer may be poorly informed about how to acquire vital inputs.

But, has the west’s reluctance to transfer technologies to sub-Saharan Africa been a blessing in
disguise?
Yes, in at least two important respects. One, and in retrospect, Africa was spared a wholesale
onslaught on the environment. Most technologies that Africans have wished to receive from the west
have been associated with adverse environmental ramifications. The innovations have been
underpinned by a mechanistic paradigm, i.e., a Cartesian-Newtonian conceptual framework.
The view that we could embrace environmentally destructive technologies and seek to repair theattendant ecological damage once fortunes have been built underlines the depth of influence of themechanistic tradition.
Another example of the dominant influence of the mechanistic worldview can be drawn from our
methodological approaches to measurement. Often, we gauge agricultural performance by
calculating output per acre, productivity per worker, and so on. Such measures fail to consider theimperative of total biomass in performance calculations. Clearly, the widespread use of mechanistic
frameworks in the description, analysis, and investigation of phenomena has subverted the potential
invocation of the entropic worldview in fathoming the same.
The second blessing in disguise can be explained by factors occasioned by exigent temporal andglobal shifts. Since the publication of Our Common Future in 1987 and the inauguration of
unprecedented international environmental events thereafter, the policymakers around the world
have come to appreciate the depth of interdependence between the various components of the
global system. Though the idea of interconnectedness has much deeper historical roots, it is perhaps
safe to say that it acquired a more concrete expression following Kenneth Boulding’s insightful
article The Economics of the Spaceship Earth (1968). But what truly widened the discourse andheightened the consciousness about this notion was the highly controversial study by the Club ofRome, Limits of Growth (1972). Paradoxically, the hostile reaction it elicited from analysts andpractitioners of mechanistic persuasion tended to cast the factor of interdependence into sharp

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26

relief. And yet, it was only after the milestone environmental events of the 1980s and 1990s that theagenda for international cooperation began incorporating solemn commitments on technology
transfer and flows of new and additional financial resources.
Undoubtedly, the era of sustainable development had begun. This concept, which underpinned theessence of the Agenda 21 plan, made it crystal clear that the global challenges facing humankind
needed concerted international action if the race against time was to register phenomenal
achievements. For Africa, the mood fostered by the exigent environmental realities implied that thecommitments to promote and accelerate technology transfers would be made good in accordancewith the principles of ecological sustainability. Hence the blessing in disguise occasioned by the
new temporal and global order.
3.2
Technology–Subverting Tendencies at the Global Level: Why the North Has Not
Delivered
Africa’s desire to acquire technologies and build technological capabilities has faced severe
exogenous constraints. These include:
•
•
•
•
•
•
•
•
•

the imposition of restrictive clauses by technology suppliers such as provisions restricting
exports and those stressing mandatory purchases
conditions that stipulate that know-how would remain confidential during the contract periodcompulsory demands to purchase technical assistance when purchasing patents or trade
marks
contractual clauses fixing the final price of goods manufactured
prohibitions to produce and market similar products
contractual provisions that grant the supplier full control of the client company
the technology supplier encourages reliance of overseas manpower resources
encouragement of grant-based finance by technology supplier and export credit agencies
private appropriation by technology supplier, of domestic innovations

Foreign contractors and development cooperation agencies establish offices in developing countries towin business for their firms back home, among other things. Perhaps a Japanese example will suffice
here.
Japanese firms penetrate new, and widen established markets by making available grants which essentiallyfinance their own consultants to undertake project management and other pre-feasibility activities. Their
presence makes it easier for home-country firms to win contracts for subsequent projects related to, orconnected with, the services they had hitherto offered. They have also been known to advance favourable
recommendations for projects that are ostensibly marginal. In such cases, they send strong signals andfeelers to host government authorities expressing their support and interest to undertake local projects on
government’s behalf. More covertly, however, has been their disposition to formulate comprehensively
detailed project specifications that easily exclude nearly all others except themselves to execute andimplement projects 1. One observer even noted:

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“If Japanese consultants are employed for yen-loan projects, they often draw up
specifications that only Japanese contractors can meet”.2

The effect of this strategy in utilizing domestic technological capabilities is adverse.
In recent years, new approaches by funding countries have further undermined or even precluded thepotential use of domestic capabilities where they exist. For instance, when the Japanese offer aid, grants,
or other forms of finance, they draw developing country government officials into discussions that link theassistance to a country’s overall development plan. In-built in these ‘discussions’, proposals are advanced
to the government officials to allow them review and evaluate a range of projects contained in existingdevelopment plans. These reviews modify projects in ways that ensure long-term commercial relationships
with their own home-country firms. Whatever the form of assistance, the aid is disbursed mainly to procure
goods and services from the donor country.
The new plans become benchmarks for developing country officials, and they contain specifications thatfavour donor-country firms to win domestic contracts.
It is now an open secret that many foreign agencies that operate offices in DCs are staffed significantly by
employees of private firms who design terms of reference that favour donor-country companies. These“technical experts” formulate proposals tailored to suit the taste of donor-country officials.
The research and development (R&D) for instance, would use a grant to hire Japanese consultants andfirms to undertake pre-investment studies which end up shaping and prioritizing the development plans ofa developing country. The US Congress (1993) notes that the composition of consultancy teams isoverwhelmingly Japanese with all the senior positions and over half the project time filled and executed
respectively by the Japanese 3.
Involvement in pre-project activities gives donor-country firms considerable advantage in bidding for themain project. Indeed:“...the use of Japanese firms to do feasibility studies probably tends to steer the main
projects to Japanese firms” 4.

3.3

Strategic Considerations—Intellectual Property Rights and the West’s Competitive
Advantage

For nearly a decade, a number of industrialized countries have complained that the existing patent regimes
are too weak to protect inventors from reckless imitation of their products by pirates, mostly located indeveloping countries. The leitmotif of patents is to confer monopoly rights to an inventor for a limited,
specified period of time. The precedent of legal protection induces further investments in technologicalinnovations. In this context, competitors would undertake investments to outdo each other under theumbrella of protective legal guarantees. Besides, an air-tight patent protection system promises innovation

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momentum, i.e., competitors would constantly exert efforts to modify and improve existing products orprocesses so as to maintain a technological lead in a market niche. To continue having a foothold in themarketplace demands incremental, and sometimes, discontinuous innovation spills. Furthermore, becausesome sectors of an economy are intrinsically science-intensive, and because science is an expensive
affair, institutions doing R&D would only be induced to carry out resource-intensive research under theassurance of legal protection. This means that sufficient protection is necessary to enable innovative
investors to recoup their expenses.
It is essential to point out that the whole idea of patents stemmed from notions of private property protection;
notions that rest fundamentally on ideological and philosophical underpinnings associated with liberal
economic systems. Because private property is a central institution in market economies, the pursuit ofself-interest in the management of physical artefacts is a well established phenomenon. Products of themind which can be embodied in physical structures, big or small, are manifestations of an individual’screative process. Against this background, the legal ownership of property in a market system presupposes
duties, rights and obligations between the owner and society. The issue of private property protection,
therefore, becomes central in a system resting on the sanctity of the individual.
An important distinction ought to be made between an invention and an innovation. An invention is ascientific discovery or a new idea; an innovation is the practical concretization of an idea, i.e., the invention.
It is therefore the practical translation of a new idea into a potentially commercializable product or process.
It is also crucial to draw a sharp distinction between relative novelty and absolute novelty in technologicalinnovation. Human evolution has been marked by introduction of new ideas (new knowledge) which have,on numerous occasions, been translated into concrete innovations. When the world experiences theintroduction of a novel idea (ideas with an innovative potential) for the very first time in its history, the event issaid to display absolute novelty. Such an invention or new knowledge has no precedence anywhere, andadds something radically different from any known pre-existing inventions or innovations. In an importantsense, the world’s stock of knowledge increases as new novelties are brought to being.
However, while absolute novelty refers to an invention coming onto the global scene for the first time, thesame invention could be new in a given country even though its appearance global has been visible forsome time. Its newness in a country is thus relative in a global sense. From a global point of view, theinvention already enjoys precedence, is pre-existing, and does not add to the world’s stock of knowledge.
When a country experiences the introduction of an invention new to it but which already is pre-existing
elsewhere, the event is then said to characterize relative novelty.
In the early years of patent history, protection was essentially extended to innovations, and not inventions.
For almost 200 years since the first patent was issued in Venice, the legal-institutional structure wasorganized in ways that granted temporary monopoly rights to investments connected expressly to inventions.
Basically, the strategy was meant, through entrepreneurship, to transform new ideas into productive
investments. Such patenting strategies created conducive conditions for translating inventions almost as

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29

quickly to commercial ventures. Given such an atmosphere, there were strong temptations to “work out”
inventions since rewards could only come from a tangible property.
After several decades in operation, the patent regime began to evolve away from its initial focus on innovation
protection to one which conferred monopoly rights to inventions. Patents could now be issued to new ideas
without the necessity of entrepreneurial translation of those ideas. Clearly, the working of the invention wasdelinked from the invention itself, a fact which influenced greatly, the content and direction of technologicalinnovation. In the former regime, invention and innovation were fused into one, becoming almost inseparable
in all their diversity. It was a regime that automatically instigated the inevitable conclusion of an invention,and the innovation that followed was inextricably interlinked. Consequently, then, what was granted
immediate protection was the innovation, and only indirectly the innovation.5
Conversely, the new patent regime extends protection more expressly to inventions and only secondarily toinnovations. This shift in emphasis has far reaching implications for industrial change and technologicaldevelopment of Third World countries.
Kingston asserts that the present emphasis on creative inventions is misplaced especially when one
compares differential investment requirements for inventors vis-à-vis innovations. The latter stage consumes
far more financial and other resources than the former. For this reason, he argues, protection should
indeed be accorded to those who invest in the transformation of their ideas into innovations, rather thanconfining protection exclusively to inventions. Protection should thus be extended to inventions which are
subjected to investments.
But the question that arises is whether such a proposal should not be beefed up by safeguards to inventors.
If an inventor’s potentially commercializable idea is not protected for lack of investment, would this situation
not lead to episodes of hijacks especially when inventors fail to secure the necessary finance? Would not
the already powerful rich rivals chance upon inventions produced by relatively weaker inventors? Could
such possibilities make potential inventors more secretive about their work until finances are raised forinvestment? And more generally, what impact would such an emphasis have on inventive and innovative
activities as a whole?
These aspects are a vital part of the ongoing debate on strengthening intellectual property regimes. If theindustrialized countries succeed in compelling the rest of the world in adopting uniform patent standards,
there is then the imminent danger of weakening property rights regimes of indigenous communities inmany developing countries. The consequent erosion of their natural resource bases will not in any way be
helpful in promoting eco-development in the South. At the same time, the fact that most environmentallysound technologies will be subject to air-tight patent regimes means that Africa’s capacity to participate
effectively in the UNICED agenda for eco-development will be weakened substantially.
What Africa calls for under the present institutional crisis is large-scale support for eco-activities and thetechnologies that go with them. Africa’s ecological environment is subject to further erosion unless thesustainable technologies developed in the North are provided at large concessionary terms. If the efforts tomake uniform or strengthen property regimes are not relaxed, and if eco-technologies are not subsidized

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for Africa (among other things), the continent will be reduced to a sad ecological museum. The hardships
will be even greater a decade from now. Africa must be allowed to catch a glimpse of its old golden past in
the sustainable process. At the present historical juncture, Africa’s capacity to innovate depends not only on
the willingness of the world to help her look at her own past, but also support her by supplying ecotechnologies in the near future.

(Footnotes)
See US Congress, Office of Technology Assessment 1993)
Development Assistance, Export Promotion, and Environmental Technology, Washington, D.C., U.S. Government Printing Press, p.44.
2
Ibid, p.44.
3Ibid, p.43.
4Ibid, p.43.
5
See Kingston, W. (1992) “Patents and Endogenous Capacity-building” in
ATAS Bulletin, Issue No. 7, United Nations, New York, Spring, pp. 176-177.
1

4.

Why Was Africa Not Stood on the Shoulders ofGiants? Lessons from Experience

Japan’s technological development as in other newly industrializing countries (NICs), has often beenflaunted as a possible model of imitation for developing countries aspiring to acquire industrial capabilities.
However, many sceptics around the world have advanced the view that the Japanese experience has
been too unique to be replicated elsewhere. Cultural, historical, and international factors have been citedemphatically to drive home the perceived “irrelevance” of Japan’s technological evolution to Africa’s
development. Yet, after almost three decades of strategic imitation, a significant number of South East
Asian countries have managed to acquire and build domestic technological capabilities along lines
reminiscent of Japan’s own selective approach to industrial change. The consequent success of the NICs
germinated the view that despite Japan’s unique attributes as a society, certain broad fundamentals exist
as universals to guide “catching up” countries. If Britain’s industrial experience was regarded as unique inthe sense in which the Japanese case has been vaunted, then many European countries in the 19th
century would not have attempted to copy certain underlying patterns of technology acquisition. While
appreciating the distinctive idiosyncrasies of the British context, many European countries focused on the“strategic unities” within the broad cultural, historical, and international diversities of the technology
assimilation process.
3.1

Africa’s Urge to Industrialize

The mystique about industrialization evolved in the context of visible income changes, increased prosperity
and far reaching structural transformations of the economic landscapes of the developed countries. It has
been observed that the industrial sector not only has the potential to induce technological dynamism inmany branches of an economy, but also has an infinite capacity to generate technological change within
itself. 1 At the heart of these transformations is technology, whose influence as a motor and engine ofchange is now well recognized. The role that technology plays in economic change was empiricallyjustified when Abramovitz (year?) furnished evidence that explained the source of the large residual(82.5%) in terms of productivity and efficiency in resource use rather than in connection with changes infactor inputs. This study, and others by Kendrick, Griliches and Solow (year?), demonstrated the significanceof technology in economic change.
During the post-war period, and particularly during the 1950s and 1960s, industrialized countries experienced
unprecedented increase in economic growth rates. A large chunk of the North’s population enjoyed higher
standards of living, rising economic prosperity, and expanding social improvements. These patterns ofchange made the differences in income levels, well-being and several affluences between industrializedcountries (ICs) and developing countries (DCs) even starker. While ICs were characterized by affluence,
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the continent of Africa was largely marked by indigence, poverty, malnutrition, and general economic
decline. These disparities and contrasting trends drew the attention of policy makers, academic thinkers
and practical men of affairs 2 to forge arrangements that would help developing countries emerge fromtheir predicament.
A whole range of models appeared as a consequence of policy work undertaken by development
economists. Most models emphasized either internal weaknesses or external factors in explaining
underdevelopment, with hardly a vision to see the world in integrated terms. These conceptions had farreaching implications on biodiversity. The basic traditions of these models also perpetuated their economistic
underpinnings, without addressing the compelling questions of model limitation.
One inevitable conclusion from the premises of such models was that developing countries should tread
the path many industrialized countries had passed in their quest for modernization. It was argued that theeconomic fortunes of African countries depended on how faithfully they followed the footsteps of ICs in theircrusade for economic development and prosperity. Only by imitating the industrialized paths of the Northwould Africa be assured of a prosperous future. The ICs became the paragons of emulation, and the basic
assumption in such development was and still is, a view of industrialization in schematic stages.
Gerschenkron puts it in the following terms:“... all economies were supposed regularly to pass through the same
individual stages as they moved along the road of economic progress.
Thus, Rostow was said to assert that the process of industrialization
repeated itself from country to country lumbering through his pentametricrhythm.”3
Gerschenkron goes further to observe that the level of a country’s backwardness influenced the structureand evolution of its industrialization, here referring to discontinuity in the growth process.4 Through‘demonstration effects’, DCs emulative thrust increased in response to pent-up pressure reflected in therising levels of consumption.5
Wonderstruck and enthralled by the marvels of industrialization, developing countries in their eagerness tomodel themselves according to ICs cultivated a belief that technology transfer from the north was animportant condition of development. Access to modern technology was a crucial prerequisite fordevelopment. Gee (1981) makes the following point:“Foreign countries remember the miracles of technologically-basedindustrial innovation in the United States dating back to the Industrial
Revolution and have witnessed the major role that American technology
played in the economic resources of West Germany and Japan sinceWorld War Two. These industrial lessons have not been listed on thembut have since found expression in their determined efforts to adapt

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33

imported technology to local needs. The developing countries inparticular realize that, in order to reap the full benefits of an increasingly
technological world, they must align their governmental infrastructure
for effective utilization of technology imported mainly from theindustrialized countries.”6
Faith in technological change expressed in the policy objectives of developing countries was thus
strengthened as a result of its influence on the growth patterns of industrialized countries.
The continuous creation of new science and technology, and the accumulation of knowledge in general,
have been seen as positive development s largely because this accumulation is deemed to favour
newcomers. 7
The point was not lost when more than 50 % of economic growth of ICs was realized to have stemmed
from technological changes, the latter being identified as a major determinant of economic development.
After this basic recognition, many developing countries expressed optimism and went about setting up
institutions to obtain technology from industrialized countries. The declaration made by the United Nations
proclaiming the 1960s as the first Development Decade gave greater urgency to Africa’s ambition offacilitating technological, industrial and economic development. This realization also placed some
responsibility on the ICs to help initiate a faster development process in the south. By the end of that decade,little progress had been made on this vital score, despite futile efforts by developing countries to secureagreement from ICs on the crucial question of the International Code of Conduct for the Transfer ofTechnology to the South. The technology issue was brought up in the discussions on the New International
Economic Order in 1974, after developing countries felt that the global economic system was an independent
development of their economies. The thrust of the challenge stemmed from the recognition that an
exploitative relationship characterized economic relations between the North and the South that worked tothe considerable disadvantage of the South.
International inequities, particularly those related to trade and technology transfer, were reflected in themagnitude of resource outflows from the South, mainly generated from royalty payments, transfer pricing,market control, restrictive business, monopolistic abuses, duty exemptions, capital repatriation allowancesand favourable terms of trade for the North. In general terms, a large part of research and development
expenditure (about 98 %) was, and continues to be invested, by industrialized countries. For the majority of
African countries, interest payments for matured debts were well in excess of 50 % of export earnings,
sparing only a modicum. Driven by sombre predictions of impending economic malaise, many developing
countries launched a drive to redress the global economic system towards greater social and economic
justice. In the wake of the OPEC oil embargo of 1973, and the new-found power of oil exporters, thedeveloping countries put forward a series of demands that would, among other things, involve an equitable
framework for questions of technology transfer, industrialization, market access of industrialized countries,
debt, and aid. Despite the inauguration of two crucial environmental conferences in the early seventies, theATPS SPECIAL PAPER SERIES N O. 21

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broad issues of discussion on technology and industrialization during the decade hardly addressed thefundamental questions of ecology in the technological capabilities of the Third World.
3.2

How the Giants Did it – Distilling the Gems of Technological Success

Given the spectacular economic success of many NICs, the question that arises is whether the crucial
threads of their technological experience can be used to distil basic universals for Africa’s technologicalevolution.
4.2.1.

Japan

The technological achievements and development experiences of Japan and the NICs illustrate theimpact of public policy on economic transformations.
The rise of Japan to technological and industrial pre-eminence stems mainly from an ethos
deeply rooted in nationalism and patriotism, a desire to develop a strong powerful economy
capable of withstanding and keeping at bay colonization by imperial powers who were on
the rampage, carving out the world for themselves in the 19th century. Colonialism – theactual annexation of a foreign territory by an imperial power - was severely an extension ofimperialism, a phenomenon well under way in the 17th century. Sensitized by imperial
adventurers of penetration and escapades of Commodore Perry in 1854, and seeing theimplications for isolationist policies of the Tokugawa dynasty (whose genesis lay in European
attempts at penetration in the 17th century), a revolution called the Meiji Restoration explodedin 1868, led by leaders who believed that the only way to put off imperial colonialism was tobuild Japan into a strong industrial power. The point was not lost when China, industriallyweak and economically backward, attempted a policy of autarky but failed in the face ofBritish might. The opium war (1839-1842) was a military clash to open up China to the west.
In a sense, the Meiji rulers were saying that a militarily strong but economically weak country
cannot win when confronted by an established military and industrial power. The argument
was that a policy of isolationism by a weak power was bound to give way (by cutting itself off
from the rest of the world) to relentless penetrative pressure emanating from an industrial
giant.
With these historical facts in mind, the Meiji establishment embarked on a strategy tomodernise Japan along modes of production, industrial organization, and techniques ofmanufacturing that succeed in making a country a dormant imperial power. 8 Of course, it is
not clear whether Japan was also interested right from the beginning in being an imperial
power9; what is evident, however, is that the desire to grow into an industrial and economic
power was to keep imperial colonialism far from its shores. It was not even based on
improving incomes or the profit motive.10

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD
However, there were factors that helped Japan industrialize without external interference.
Japan’s geographical remoteness and insular position on the world map kept it almost outof reach from potential imperial invaders.
The agrarian and agricultural economies of developing countries were conditioned by theindustrial imperatives of metropolitan powers. Distortions in these economies stemmed
from the model of dependent or derived development, influenced overtly and covertly byexternal imperial forces. Colonialism and the imperial order implanted alien systems throughcoercion; on the other hand, Japan purchased foreign technologies and assimilated themwithout coercion. Japan, however, was not satellized, and therefore escaped many of theconstraints associated with imperial interests.
At the same time, many early firms were established by the state but later sold off to private
businesses at concessionary prices. A thriving system of domestic banking, supported andset up by the state, advanced loans, credit and capital finance to industry.
By comparison, Africa’s state-sponsored, state-owned, or state-established firms are runningheavy deficits and hence fail to attract potential investors and buyers.
Many government policies in Africa are guided by political patronage, nepotism, andeconomic favouritism. The establishment of firms is not dictated by the imperatives of themarket, but by leaders’ whim. Many firms doing the same business may emerge, thusbuilding unnecessary capacities. Underutilization of facilities then follows. In contrast, Japanmeasured the entry of firms in particular sectors – the staggered-entry formula. Congestion
was thus not allowed. It encouraged the establishment of conglomerates, and large sized
firms called Zaibatsu.
Japan focussed her attention mainly on old style industries – they were capital-intensive byJapanese standards. But they could still be copied and absorbed without insurmountabledifficulties.
But the biggest lesson for Africa, despite the unique advantages enjoyed by Japan and thehard realities of today’s economic environment, is that Japan’s terms of reference forindustrialisation were devised and pursued by Japan herself. The search process fortechnology was actively pursued by several teams sent abroad for training, espionage,acquisition, absorption, assimilation and reproduction of foreign technologies.
Technological development was internalized with no ceding of control to overseas suppliers.
The Japanese was a visible and active participant throughout the entire technologicaltransformation process, from the preinvestment phase to project execution and project
implementation. Some notable industries in Brazil, Argentina, India, Singapore, Malaysia,
Taiwan and Hong Kong have adopted Japanese type approaches to achieving industrial
and technological change. The governments were operating in a difficult environment,

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though less harsh than what we have now, but the multitude of technology suppliers thenavailable made it possible to secure concessions from at least some companies. But thosecountries invested resources to understand alternatives and possibilities, and were fully
prepared after doing their homework well.
But how did Japan organize herself? Where do we start in our efforts to understand the sources ofJapan’s technological achievements? Did the country have a conscious set of technologicalobjectives? Did it have a pro-active strategy? What instrumental measures did the state enlist in
pursuit of its technological goals? Above all, what were the critical factors that steered the economy
along a determined technological trajectory? In short, what were the decisive circumstances, bothproximate and deep-seated, that thrusted Japan onto the fateful path of technological excellence?
Efforts to fathom and explain Japan’s phenomenal techno-industrial success have been staggering.
The output can only be described as torrential.11 It is interesting to distil and isolate the gems
responsible for Japan’s monumental technological accomplishments, but an excursion of thisprofundity will only enlighten if the context to its techno-industrial evolution is cast in sharp relief.
On the basis of the circumstances cited above, how did the leaders in Japan, arrive at the fatefulconclusion that the critical driving force needed in realizing their overriding ambition was, first andforemost, technology? What was it that prompted the leaders to recognize the centrality of this factor
in economic change? Why was science not accorded comparable recognition in Japan’s
development aspirations?
Perhaps the roots of Japan’s early and subsequent technocentrism can be traced to the inferences
drawn and conclusions reached following Commodore Perry’s successful military penetration ofthis profoundly autarkic society. The superior technological performance of the invader’s militaryequipment was seen as the imperative behind Japan’s excruciating humiliation. Of course, there
was no military defeat. Perry achieved President Fillmore’s desire to have Japan establish traderelations with the US after a spectacular show of force. Before departing in 1853, Perry flexed his
muscle by sailing a steamship up Tokyo Bay against the orders of the Japanese authorities. The
rulers greeted this act of insubordination by a foreigner with both resentment and awe, the aweprompted by the captivating and bewildering impressions stirred by the technical innovation, i.e., thesteamship, which the Japanese had never seen. It is this interplay of immiscible emotions of being
both terrified and dazzled by the technological display that precipitated the act of reluctant Japaneseacquiescence on Perry’s return in 1854. George Mikes captures the technological temperament
among the Japanese in the following vein:“If the gaijin (the foreigner) can force us to do things we do not want to do, then the gaijin isstronger and more successful than we are. The gaijin, indeed, must be better. So we must learn
his ways, we must learn all he can teach us. If the gaijin has steamships we have never seen
before, then we must learn how to build steamships. And then we can face the gaijin on his own
chosen ground, with his own weapons.”12

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37

Elsewhere, Mikes describes how success is treated as a supreme end in itself. In the Japanesetradition, success is associated with what works and that which produces tangible results. Mikes
again:“If they are told that a sense of humour is a desirable proclivity, they will form serious study-groups
to discover how to acquire a really robust sense of humour.”13
In an important sense, therefore, technocentrism among the Japanese is a cultural underpinning;
it is universally embodied in the very conceptualization of success. It is a worldview that largely
explains their marked propensity to imitate what works.
This technocentric propensity also explains why science (that domain of knowledge associated withfathoming why things work, i.e., the underlying principles and theories that necessitate phenomena)
was not a prominent feature in the Japanese psyche.

“…organized R&D played a relatively insignificant role as a policy
instrument of the pre-war Government. What there was of R&D in
the government enterprises, experimental stations and research
institutes was mostly for studying foreign technology, be it a chemical
process or a mechanical principle.”14
Having explored the roots of the Japanese technological temperament, it would then be essential toexamine how the leaders of this once autarkic society managed the overall programme of domestic
technologization. First, the leaders were pro-active and purposefully conscious in their applicationof technology policy. Notably, the process of change was spearheaded and guided by a powerfulmodernizing and reforming elite. There was no room for lip-service since the whole ethos of success,an attribute which the Japanese worship, was defined in terms of what works. It is an ethos that haspermeated the entire fabric of society. The initiative and impetus, however, came from above. The
vigorous application of technology policy was thus a leaders-driven endeavour. The significance of
this particular state of affairs in influencing domestic technological success cannot be
overemphasized.
But Japan’s quest for technological change was also favoured by conducive features then obtaining
in the international environment.15 First during the period under review, Japan was not encumbered
by a restrictive and constraining intellectual property system. It could therefore build domestic technoindustrial capabilities without risking punitive trade sanctions from potentially “aggrieved” countries.
Related to this situation was the way in which the international market for technology was structured
and controlled. Then, governments played a prominent role in technology transfer dealings, unlike
now where multinational corporations are the main and predominant suppliers of technology.
Second, Japan faced an international development context where the technological gap between
early and late industrializers was narrow and therefore not so difficult to bridge. Manufacturing

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production, in its broadest sense, hinged on artisanal and engineering-based skills which could, inmany cases, be absorbed with relative ease through apprenticeship attachments, learning-by-doing,
and on-the-job training. In contrast, the present world order is characterized by vastly sophisticatedand complex technologies which require considerable investments in R&D.
Finally, Japan built domestic technological capacities in an international environment that was
relatively free from the militating constraints occasioned by consumption-intensive technologies.
The domestic market was not overwhelmed by consumer imports. The deeply rural orientation ofJapan helped catalyze the growth of the textile sector, which relied heavily on local materials. Initially,
this sector of the economy, predominated by small-scale industries employed craft skills, but evenwhen capital-intensive industries were set up using imported modern technologies, the use ofresource-based inputs and local materials continued to dominate. The fungal Japanese households
were thus not exposed to imported products that had the potential to drain the Meiji state of valuable
foreign exchange. Accordingly, its economy was spared the adverse ramifications unleashed bysuch technologies. Japan’s prospects for promoting and maintaining high rates of domestic savings
and investments were bright under the resilience of traditional consumption lifestyles.
The contemporary absence of requisite circumstances enjoyed by pre-war Japan and which aregermane to the acquisition and establishment of domestic technological capabilities suggests that
Africa will have to be all the more aggressive in its technology policy initiatives. The era of soft options
has long gone. This realization should not dampen the spirit of those states seeking to industrialize
within the next two to three decades. By hindsight, Africa should count her blessings because theconstraints posed by the contemporary international development context have spared her the graverisks that would have been unleashed by ecologically destructive technological capabilities.
Happily, in the wake of growing environmental consciousness worldwide and the heightening ofsustainable concerns globally, new opportunities which African states can seize to acquire andevolve domestic technological capacities have presented themselves. At the same time, such states
would stand to gain if they wisely invoke relevant environmental provisions that prohibit flows of
ecologically-harmful technologies.
The conduciveness of the international environment notwithstanding, the success behind Japan’s
technological experience was also determined by several other imperatives. These were: how theleaders planned their strategies; the nature and composition of the technology policy framework; thetiming, phasing, and sequencing of technological investments; and so on. In succinct terms, Japan’s
technology policy framework rested on five main pillars, namely: 16••••

Introducing advanced western technologies
Facilitating technological adaptation and generation of domestic technologies
Promoting and giving incentives to technological innovations and diffusion in the wider
economyDeveloping skilled human resources and relevant manpower needs

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD•

39

Creating appropriate institutional and legal structures

The introduction of western technologies was a carefully planned process. Throughout the pre-war
period, the Japanese leaders remained focussed and determined as they sought technologies fromabroad. For instance, they consciously avoided those modes of technology transfer which had thepotential to undermine Japan’s long-term prospects for strengthening locally available capacities.
In this regard, direct foreign investment (DFI) was not a particularly favoured option. This explains
the marginal contribution of the DFI component in the overall composition of total annual investments
in Japan. Instead, the government borrowed from external sources to finance infrastructural projects,
state utility investments, and industrial manufacturing facilities. This direct involvement took the formof hiring foreign engineers from whom local Japanese workers would acquire skills and experiencethrough learning by doing. The government would import machinery directly, the actual purchasebeing effected by technology-search missions which it expressly sent abroad. This way, thegovernment was able to establish several public enterprises in ship-building, textiles, cement,machinery, iron works, glass, railways, telecommunications, mining, and sugar refining.
These modern facilities also played another very useful technological function, namely, the role ofmodel factories where foreign products, processes, and production techniques would bedemonstrated to stimulate their diffusion in the wider economy. In addition, they would serve as
experimental work stations to run improved and locally adapted innovations. In these technicalexperimental stations, the domestically manufactured industrial machinery (which the government
actively promoted) would be subjected to test-runs to establish whether they were good imitations of
the imported equivalents. In the process, the following technological changes are achieved:••••

the working of the imitated models are better understood
the growth of locally trained domestic manpower results in an expanded base of experienced
and skilled manpower
the evolution of domestic technological capabilities in the manufacture of industrial
machinery
the evolution of domestic technological capabilities in design and engineering with respect
to the manufacture of machinery

Soon after the initial phase (1868 – 1880s) of parastatal investments, the government sold off theenterprises to local private investors. But it still continued to play a very active role in influencing therate and direction of domestic technological change. In this new functional form, it financed private
sector investments, supplied vital information, and subsequently relinquished the responsibility oftechnology importation to the private entrepreneurs themselves.
Yet, this functional transition by government culminating in subsequent private sector domination incotton spinning, iron and steel, automobiles, electrical machinery, shipbuilding, aircraft, paper andpulp, and chemicals can easily mask the fact that it was the dominant role of government, through its
public enterprises programme, that sustained the whole process of technological development .

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Although the establishment of public enterprises was the chief mechanism used by government tofinance (through international borrowing) the evolution of domestic technological capabilities, othermodes were also employed to stimulate technology transfer. The use of technical licensing
agreements was widespread, most of which have been applied to cover specific lines ofmanufacturing production in the highly sophisticated sectors such as chemicals and electricalmachinery. However, the terms and conditions specified by foreign firms were often prohibitively
exploitative, suggesting that the overseas owners were not willing to license their technologies. Yet,the leaders recognized the huge extent of technological content these agreements embodied suchas designs, know-how, patents, and so on. While so much knowledge could be gained through thismode, the downside may include excessive demands such as exorbitant fees, exclusivity of use,
territorial restrictions, etc. In Japan, foreign firms with huge captive markets or monopoly control
appeared to be most reluctant to agree to such deals. Yet, this mode of technology transfer became
more widely practiced after 1905.
The final form of technology transfer, which pre-war Japan employed, was the joint-venture agreement.
Arrangements of this sort were few and most were characterized by foreign equity ratios below 50 %.
Joint ventures tend to operate in lines of manufacture where the technological gulf between aforeign firm and a domestic enterprise is massive. In Japan, the sectors under this arrangement
include automobiles and electricity-generating equipment.
A critical component of Japan’s technology framework is the commitment to enlarge the humanresource base. Educational programmes were designed to meet technological manpower needs,
namely, to produce skilled human resources capable of promoting and enhancing the evolution ofdomestic technological capabilities. The educational strategy was two-pronged. The first consistedof making primary education universal and compulsory, while the second involved the training ofleaders at university institutions. Later, vocational training and apprenticeship programmes wereintroduced. These tended to foster skills and experience, a blend that subsequently helped tostrengthen domestic technological capacities. It is worth noting that Japan enjoyed high levels ofliteracy even before the Restoration. This feature, together with the momentous expansion in formal
primary education, and teaching and training institutions, facilitated the process of learning of modern
technologies, their assimilation, and, eventually, their successful diffusion domestically.
While the institutionalization of the educational process generally helped produce minds susceptible
to ideas, it also enhanced the active application of curiosity-oriented minds . Not only did thissocialization promote a temperament to fathom and analyze foreign models in all their diversity, but
it also nurtured an outlook ready and willing to learn from foreign experts and technicians. Crucial topoint out, however, is that the socialization experience tended to inculcate values not only of learning
but also of innovating, i.e., modifying and improving borrowed technologies where necessary. In thisregard, the Japanese were participant observers rather than mechanical imitators.
Despite significant strides made by the government in the spheres of education and training, themodernizing elite had to initially grapple with the problem of incompetence and low quality labour

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41

among bureaucrats. This weakness tended to have an adverse impact on policy implementation on
the one hand, and attempts to import, assimilate, and build domestic technological capacities, on
the other. However, as the years wore on following the Restoration, this situation changed for the
better. Due to attractive and relatively superior salary scales for government officials as opposed tothose enjoyed by private sector employees, the state was able to attract highly educated and better
calibre manpower resources in comparison. This development led to decisive improvements in theway in which policy was formulated and implemented. The guiding, directing, and influencing roleof government bureaucrats became effective. The principle “The first machine of import, thesecond by domestic production” became a realistic proposition following dramatic improvementsin the calibre of educated manpower and their absorption by the state’s administrative machinery.
Training for manpower needs also involved overseas studies. The government-financed scheme
was tailor-made to meet the technological requirements of given industries. Comprehensive anddetailed planning about who would study what, where, when, and for how long proceeded under its
direction to fulfil three main demands, namely, creating and developing relevant human resources;
searching and compiling appropriate technological information; and purchasing requisite machinery.
Students and missions abroad were required to participate in international exhibitions, with the aimof gathering valuable technological information, and updating profiles of foreign technologies bykeeping an eye on various aspects of technological changes taking place abroad.
The Japanese government also organized competitive domestic technology exhibitions, the aim ofwhich was to promote diffusion of innovations, give incentives to technological innovations, andinstitutionalize the process of building profiles of domestic technological capacities.
The Legal-Institutional Environment for Technological Change
During the pre-war period, the Japanese government made conscious efforts to forge a legal andinstitutional framework conducive to formulating and implementing technology policy. This framework
had first to grapple with several unequal treaties signed during the Tokugawa reign which, in effect,amounted to capitulation because the treaties conferred significant privileges to foreigners. Fromthe legal standpoint, Japan was freed from the encumbrances of an alien intellectual propertysystem imposed on it and succeeded in establishing a national patent regime in 1885. By 1905, thegovernment had enacted legislation called the Utility Model Law to stimulate petty innovations. Yet,prior to this legal event, Japan became a member of the Paris Union for the Protection of Industrial
Property in 1899. However, its own national legislation introduced provisions that excluded
pharmaceutical products from patentability, imposed limitations on the non-working of patents,
included the recognition of utility models under its property regime, and conferred the state the rightto use or disregard those aspects of the Paris Agreement which infringe on Japan’s military andpublic interest. Another decisive break came about in 1911 when the economy could independently
manage, and operate an autonomous tariff regime. This particular development was equallymomentous in that the government could employ protectionist measures to shield local industries
from foreign competitive onslaughts.

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Of the two, the utility model system appears to have had the greatest impact on influencing the paceof domestic technological change. It affected techno-industrial change in the consumer and lightindustry more decisively. Patents, however, do not seem to have had any significant impact on
Japan’s technological evolution, largely because the imported technologies’ respective patents had
long expired. Moreover, the country’s geographical remoteness, market limitations, and a poortransport and communication network to Japan tended to militate against potential patent registration
by western patent holders. Furthermore, Japan managed to circumvent the western patent systemby importing machinery directly (outright purchases), then using reverse engineering techniques tobuild its own production, investment, and innovation capabilities. Finally, Japan could acquire
technologies with impunity because the procedures, processes, and niceties of legal redress had
not developed appreciably. This contributed to the low level of consciousness, and hence the low
litigation potential.
The Government-Industry Alliance
At the national level, the policy-making function, including the implementation of a technology policy
framework, had to be effected within administrative structures that integrated technology policy andindustrial development policy. In this exercise, special policy-making organs were established todirect the trajectory of techno-industrial change.
As noted earlier, the impetus to direct, guide, and influence technological change in the Japanese
economy came from the powerful governing elite. During the early years of techno-industrial change,
state planning was not of the dirigiste variety but one designed to augment market processes. Apartfrom government investments in the defence and social services sectors (railways and postal services)public enterprises set up and financed by the state were eventually (after 1880s) sold to local
entrepreneurs at concessionary, attractive terms. Often, the new owners were the Zaibatsu, thefamily-based conglomerates which assumed prominence during the government’s privatization
programme. These business outfits had their tentacles spread in fields as disparate as finance,
trade, and industrial production. The privatization drive transformed the configuration ofentrepreneurship in Japan.
The government actively supported the Zaibatsus in diverse ways. In the process, it used thisrelationship with industry to influence the implementation of technology policy, convey information
embodying express technological import, and, above all, direct, guide, encourage, and advise the
Zaibatsus to pursue courses of action compatible with the government’s technology policy objectives
as well as trading and financing imperatives. This approach, known as administrative guidance,
was not entirely non-coercive since companies unresponsive to government direction or influence
suffered somewhat. In this context, the conglomerates not only became effective importers andinnovators of foreign technology, but also succeeded in initiating and establishing new, modern
industries in areas hitherto not tackled by the government.
Morichima (1982) claims that:T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

43“…the business world has always been guided by the governmentand has reaped the benefits by swarming around the government. In
Japan, to be deserted by the government is to be neglected to beinga second rate enterprise…” (p. 189).
The government supported industry by implementing a range of policies to create an enabling environment
and also through direct influence. It often exerted pressure on enterprises and expected a certain standardof results. It is largely because of the efforts of the government that technological innovation has come toplay a decisive role in the economic growth of Japan (Minami, 1986).
Ozawa (1980) investigated the State’s control over Japan’s technological acquisition and also the entry offirms into new sectors. He claims that the Ministry of International Trade and Industry (MITI) was very activein orchestrating the process of development. The staggered entry formula which he cites was designed
not only to establish efficient scale plants but also to initiate the process of technological innovation.
It is often forgotten that the state agencies in Japan were heavily involved in manufacturing as well. Therefollowed a period of divestiture, but this has been more than compensated by the dynamism of firms understate direction, control and influence. The experience of the NICs is also valuable in assessing the impactof public policy in industrial development and technological innovation.
A key institutional mechanism designed by the modernizing elite to promote and deepen technologicalchange in Japan was the Shingikai - government consultative councils. These arrangements,
comprising government officials, academics, industrialists, bankers, financiers, and representativesof business associations, were platforms for regularly exchanging, sharing, and communicatingideas and concerns between government and the private sector in a bid to enhance the state’s
capacity to design and improve policies. In addition, the councils serve as fora for gathering private
sector information about the effects of policy, and what changes and adjustments would need to be
made, if at all necessary. Finally, these policy-making organs had the effect of drawing and assembling
together people of different talents, specialization, expertise, and valuable competence, all addressing
and grappling with the complex issues confronting the Japanese society.
4.2.2.

The Case of South Korea

Korea borrowed heavily from Japan’s technological and industrial experience. Many of the policies she
instituted were modified only slightly, her success nudging other high-performing economies of East Asia
to faithfully follow in their footsteps. These countries targeted a plethora of industries that received subsidized
and concessional credit, post-shipment financing, and free information and marketing services fromgovernment agencies. Many government agencies and trading companies that received grants operated
under stringent performance criteria. They also had automatic access to export financing at lower thannormal commercial bank rates. Targeted firms benefited from medium and long-term loans for investment
in export production, again at lower than normal commercial bank rates. Such firms also enjoyed highdepreciation allowances for capital equipment used in export production. As far as importation is concerned,

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it was not a free-for-all regime. Import rights for specific products have been extended to specific firms,
especially those that had a good export performance record.
On investments, again the regime was not open and free. Governments discouraged foreign direct
investments and motivated licensing arrangements instead. Furthermore, they subsidized targeted firms
by providing investment capital for development of new products at lower than normal commercial bankrates. Even venture capital had been extended at concessionary, non-market rates. All these policies madeexports very competitive.
Protection of domestic industry took a variety of forms, of which the subsidy factor has been the most salient.
Domestic firms producing for the export market were free to import inputs without duties. For targetedindustries and sectors, inputs have been exempted from tariffs. Tariff exemptions have also covered
capital goods used for export production. Other favorable policies have included exemptions of harbour
and other charges for export products; even firms supplying intermediate inputs used for export production
have benefited from a wide range of concessionary policies. The cumulative impact of all these measures
has been to enhance trade competitiveness in world commerce.
In the sphere of technology, as in the industrial domain, bureaucracies continue to play an active influencingrole in development. In the acquisition of technology and development of domestic capacity, again most
governments have employed the subsidized credit policy. All designated industries received direct R&D
support including funds for start-ups and capital injection for new ventures. Normally, targeted firms would
enjoy tax credits, including tax deductions for manpower training and technology development. In otherwords, whatever a firm spent on R&D or manpower development, it would be deducted from taxable
income.
A critical component of technology policy has been for the government to bargain directly with technology
suppliers on behalf of individual buyers. The negotiating team was the country’s advisory committee ontechnology matters, and it was made up of government officials, representatives from industries, andresearchers from universities and state institutions. This way, the government secured better terms for thedomestic firms and was able to screen licenses at the same time.
Most HPEA economies established centralized procurement systems administered by science andtechnology ministries. They drew representatives from industries, research institutions and government
ministries. Participants of the centralized bodies focussed on about two dozen activities which they identified
as priority areas. The identification exercise was a carefully worked out process; the criteria was to target
those sectors which stimulate the development of leading industries. The bodies have also been responsible
for planning and implementing technology policies, which include the formulation of annual, short-term,
medium-term, and long-term plans. The plans identified vital technologies as well as activities that would
be undertaken by domestic firms.
About a decade ago, Korea proposed a key technology plan that had been discussed for 2 years by some
500 experts divided into 8 sub-groups.17 But Korea also organized national technology promotion
conferences that were convened quarterly and chaired by the President himself. 18 There was no better

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45

way of demonstrating the importance of technology in development than this gesture by the Koreanpresident.
To the credit of many East Asian economies, the bureaucracies that guided industrial and economicchange were of high quality and relatively insulated from political interference. Problems of corruption
have featured from time to time, some very serious. But the civil service structures have been of high calibre,
conducted business transparently, and were governed by norms of public accountability.
The efforts made by the Korean power sector in building domestic technological capabilities are
extremely significant for Africa. That experience shows how the various institutions of thegovernment were harmonized under a central agency that specified the nature and texture of
public procurement. At the very outset, technological imperatives were identified and integrated
into the indigenization policy. A conscious policy of developing the power sector was adopted; it
recognized the need to stimulate the wider industry through interlinkages and backward
integration. The evolution of the power sector was therefore a process that gradually indigenized
import substitution and industrialization, and succeeded in doing so by linking the expansion andgrowth of the power sector with the broader national industrial base.
For three years after 1945, South Korea relied on electricity supply from the North, but soonembarked on a programme of building an indigenous base after the embargo imposed by theNorth. The overriding objective during this early phase was to install facilities to meet the urgent
electricity requirements. Given the exigency, public procurement did not radiate from anindigenization strategy, but relied substantially on foreign financed, turnkey installations to fulfill the
supply ambitions.
Between 1964 and 1975, the rapid growth of demand was accompanied by a brisk electrification
programme that placed heavy reliance on overseas companies to undertake pre investment,
project execution, project implementation services and equipment supply. The high foreigncontent ratios reflected the link forged between equipment sourcing and financial considerations.
However, despite the fact that public procurement revolved around financial considerations, somedegree of technology unpackaging was realized in construction technology. Domestic
construction firms became increasingly involved in subsequent power projects in the country.
Public procurement in this regard had been indigenized.
A deliberate, conscious strategy to shift public procurement from its strong external orientation to
heavy domestic sourcing of services and power equipment began in 1976. But this strategy wascomplemented by an industrial development policy that put emphasis on the stimulation of themachinery, steel, electrical, and ship building industries. Capacities were created to ensure policy
implementation.
At the heart of the indigenization policy was a tripod institutional arrangement organized to acquire
technologies and build domestic technological capacities. This paper suggests that the success of
public procurement policy must be seen against the content of the indigenization policy whichconstituted a carefully balanced counteraction of measures and instruments that focussed sharply
on both demand and supply. While the Ministry of Commerce and Industry (MCI) was responsible for

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planning and implementing the indigenization policy, the Korea electric power company (KEPCO)
was responsible for planning, construction, and management of the power sector.
The third factor in the institutional equation is the Korea Society for the Advancement of Machine
Industry (KOSAMI), which represents the machinery sector with policy powers to regulate and screen
the flows of capital equipment. KEPCO represents the demand side of that institutional equation,
while KOSAMI represents the supply side.
KOSAMI’s other functions included the building of technology profiles, the stipulation of local content
ratios for domestic equipment production, and the extent of local participation in sub contracting
activities. In addition, it organized domestic finance for those activities where local capabilities
existed, and also informed all equipment importers of local substitutes.
As part of the government market restrictions policy, KEPCO identifies eligible supply firms that canbe supported to manufacture a specific range of sub components of a product. It also participates inquality control and the implementation phase of a power project. This rationalization process led tothe systematization of the power plant equipment market where a subsidiary of KEPCO was solely
responsible for the production of the main and some auxiliary equipment. Engineering services
were also high on the indigenization agenda and KOPEC, a subsidiary of KEPCO, was formed as areconstituted Korea Nuclear Engineering Company (KNE). According to the report:“. . .the principal rationale for this arrangement is that the
specialization is necessary not only because of the limited size ofthe domestic market but in order to facilitate concentration of learning
opportunities. Besides, such an arrangement enables constantcommunication between the client public utility and the supplies,
which is generally believed to be conducive to quality assurance
and technological improvements”.
The development of the domestic technological capacity in engineering services and production of
power plant equipment was based on the explicit effort to accumulate experience on machinery
production, attach counterpart staff in all the activities, and intensify training of engineers andtechnicians. According to the report, the activities were initially undertaken by the expatriate personnel,
but the counterpart staffing strategy coupled with the setting up of organized teams to learn at close
range contributed substantially to capability development.
With regard to sub contracting work given to domestic firms, the contents of collaboration agreements
included: the purchase of design documents for the production of certain equipment and theircomponents, technical assistance, and the training of engineers and workers. The sub contracting
work was a specific feature of the technology agreements, with deliberate conditions to import know
how to the attached domestic firms.

47

T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLDThe evolution of the power sector in Korea shows that public procurement can be an effective wayof building technological capabilities. Clearly, the coordinated actions of the various ministries playeda significant role in that process.
The rapid growth of technological capability in engineering services and power equipment production
has not been uniform in other aspects, however. While the contents of collaboration agreements withmain equipment producers specified the imperative of technological build up, the motives of domestic
auxiliary equipment makers were not similarly geared. According to the report, they were moreinterested in adding “more and new products”, or acquiring production capacity.
In conclusion, the Korean case shows that the acquisition and absorption of technology was a
conscious ambition of the power sector. The terms of reference were designed to capture thisambition. It was bolstered by specific contractual agreements on training and attachment ofcounterpart staff overseas. The involvement of local personnel was maximized not only in building
expertise in new areas, but also in strengthening technological capabilities through local
subcontracting. It was the vision, complemented by an action oriented programme that helped forge
strong capabilities in Korea’s power sector.
4.2.3.

China

Bilateral modes of procurement have significant potential to maximize technology acquisition if technologicalimperatives are integrated within the procurement framework.

Table 2: Content ratios for planned equipment production in China, 1986–1990*
Project Phase

Local content ratio (in percentage)

1st
2nd
3rd
4th
3rd Unit (Low pressure heater)
Condenser (1&2)
Condenser (3&4) 35

22
40
50
80
100
25

Source: MPS Staff Reporter, “Jiangyou Project Maximizes Technology Transfer,” Modern
Power Systems, (1991) vol. 11, Issue 1, January, p. 47.
* This period covers China’s 7th national five-year plan. Note that local content ratio increases
as the project moves to the 4th phase. Also note that local content ratio for condensers 3& 4
is higher than for 1& 2. The conditions for the entire contract were drawn by the Chinese
Ministry of Energy. Clearly, an integrative approach was taken by the Chinese authorities that
included intensive training, identification of specific technological targets, and reduction ofoverseas content ratios over time.

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48

In 1986, China entered into a long term agreement19 with GEC Alsthom of France for the manufacture offour 300 MW turbine generator units, transfer of design technology, documentation and drawings, and a
gradual increase in domestic content in the co production of heavy power generating equipment. The
Chinese public institutions involved in the venture were: China National Technical Import Corporation(CNTIC), China International Water and Electric Corporation (CWE) which owns the Jiangyou project, andBeijing Heavy Electrical Machinery Works (BZD). The latter has had years of experience in the manufactureof 200 MW turbo generators but given the annual power requirements in China (approximately 10 GW),
larger unit capacities are to be produced locally. But significant in the bilateral agreement is the specifictargeting of local content ratios, as summarized in Table2.
4.2.4.

Other Examples

UNCTAD (1983) observes that in countries like India, the implementation of public procurement policy has
sometimes been unsuccessful particularly for foreign funded projects. 20
Public procurement here refers to the capacity of state agencies to obtain supplies from domestic firms
rather than rely on overseas companies to market power equipment to India. The UNCTAD (1983) study
highlights the gap between the declared policy of the government and the implicit preferences of somegovernment officials to appoint overseas consultants and procure machinery and equipment for state
institutions. 21 These “policy gyrations” as they are called, have weakened the capacity of Indian consultancy
and engineering companies to maximize domestic technological content (p. 69).
However, although the sixties and seventies were characterized by some policy gyrations, India did eventually
manage to increase its domestic content in state directed power investments. But the early years ofbuilding indigenous capability were gripped by problems of faulty designs (introduced by licensors who
had limited familiarity with conditions in India, UNCTAD, 1990: 13). The country placed heavy emphasison the creation and development of a power equipment manufacturing industry, but the first generationequipment produced in India through licensing precipitated problems of performance of the power sector. 22
While the government was committed to developing indigenous capabilities by involving more domestic
firms in the process, it also realized that procurement of knowledge and expertise would initially call for a
relatively higher level of external support from established power firms overseas. In the short term, then,technology acquisition by Indian firms demanded a large level of collaboration with overseas firms.
By early 1980s, India’s public sector had developed a capability to manufacture turbines, generators,
boilers, transformers, condensers, switchgears, motors, pumps, heat exchangers and feed water heaters.
Bharat Heavy Electricals Ltd. (BHEL) now satisfies 80 % of the major plant and equipment needed byIndia’s power sector (UNCTAD, 1990: 12). India also exports power plant equipment; this is evidence of
graduate maturity of a sector that initially depended heavily on overseas technology. Nayer (1983) observes,for instance, that India is now capable of breaking down (for a large number of projects) the technology
package except for projects sponsored by the World Bank (p. 523) or those which contain co financing. In
such cases, India’s public procurement policies are heavily constrained from effectively utilizing domestic
technological capabilities. 23

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India provides a minefield of valuable case studies on contrasting management possibilities in the
broad vista of technology transfer development. Nath and Lokesh (1988) evaluated modest, thoughsignificant efforts directed by an indigenous laboratory to develop a technology for the production ofchlorosilanes. This intermediate chemical feedstock has widespread use in the manufacture ofresins, greases, emulsions, silicon rubbers, textiles, paper, leather and food.
The National Chemical Laboratories in India were inspired to develop a local capacity for two main
reasons: one, chlorosilanes were wholly imported, and two, the technology for its production was aclosely guarded secret. The NCL succeeded in developing one, established a successful pilot
plant, and commenced manufacturing.
However, this momentous endeavour to achieve technological self-reliance through indigenous
R&D was frustrated by lack of complementary institutional support. Within a few months aftercommissioning, the basic raw material price rose sharply. The firm was engulfed in a grave financial
crisis, exacerbated by easy-flowing unrestricted imports of the finished product. The government
continued to restructure the tax regime, and restrict government’s staggering capacity for inaction,
dealing a death blow to an R & D infrastructure capable of creating modest beginnings of indigenous
technological capability. The authors lamented that:“—— Indigenous technology cannot play a useful role in thedevelopment of technological self-reliance unless backed by rightpolicies and programmes of the government———”While the dismal case of chlorosilanes raised genuine concerns for government intervention, thesame authors explored the evolution of a successfully managed technological development thatwas supported institutionally. The project involved the production of monocrotophos, an organophosphorus pesticide that began in 1978 after a broad-based feasibility study. For a very long time,
agricultural firms relied heavily on imports, spending large amounts of foreign exchange. At the
government’s request, three research laboratories embarked on intensive research to develop an
indigenous capability for the manufacture of monocrotophos. The success of this project can be
attributed to efficient management of transfer development of indigenous technology for self-reliance.
Aspects of successful management include:•••

A comprehensive market research that revealed existing pesticide demand and hence theneed to develop an indigenous technology;
Clear identification of the pesticide and the velocity with which the technology was developed;
Government institutional support in restructuring tax regime and pricing policies of basic
inputs.

The successful case of monocrotophos production is an exemplary illustration of independent
technology development capacity (ITDC). Considerable research energy has been expended tolearn and create an independent capacity for technology generation. Ronald Dore (1984),

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commenting on aspects of India’s technological experience, emphasizes the need to focus more
attention on independent technology learning capacity (ITLC). While stress was laid heavily ontechnological self-reliance, India has since realised an impressive measure of success but only atthe expense of obscuring important complementary capacities in technology evolution. Dore cites
an automobile manufacturing firm complacently clinging onto old designs without evolving improved
processes and products, despite the enormous range of financial and institutional incentives at theirdisposal. The technostructure, to borrow the Galbrathian metaphor, was obsessed with the newimport-substitution drive almost as a corporate ethos of self-actualization. The firm in the course oftime absorbed the mechanics of automobile production (Adhesive-Imitative Capacity) without
genuinely valuing adaptive innovation in product evolution (Cohesive-Creative Capacity).
A major drawback in Dore’s analysis is gross oversimplification of the interaction between technology
transfer, import-substitution, and government involvement. It is true that the firm producing the
Ambassador failed to make R&D sacrifices to improve upon the model. Dore compares this failure
with spectacular success achieved by TELCO, a bus and truck manufacturing firm, in independent
technology creating and learning capacities. What he failed to note was the fact that successes or
failures in India were random and not necessarily a function of state involvement. Selective
government intervention depends to a large extent on the existence of symbiotic relationships
between itself and specific technostructures. Passive or lukewarm intermediations have in someinstances induced inertia and feeble responses to creating and generating learning capacities; theAmbassador production is a clear case in point. Corporate complacency unwittingly supported bystate nonchalance and institutional distance can easily precipitate random results. The failure bygovernment to intervene, despite ITCC, ITLC and ITDC in the case of chlorosilane’s project, is aclear testimonial reminder that the quest for import substitution industrialisation and technologicalself-reliance may be a ‘Will-o-Wisp’ if the various capacities are not complemented by tactical andstrategic state intervention.

(Footnotes)
Singh, A. (1982) “Industrialization in Africa: A Structuralist View” in Fransman, M (ed)Industry and Accumulation, Heinemann Educational Books Ltd, London, p.27.
2
Seers observes that “...close personal contact with the problems of backward countries instils for many reasons, a sense of urgency
and some impatience”, p.53. See Seers, D. (1963) “The limitations of the special case” reprinted in Meier, G. (1976).
3
See Gerschenkron, A. (1962) “Economic Backwardness in Historical Perspective” reprinted in G. M. Meier (1976)
Leading Issues in Economic Development, Oxford University Press, New York, p. 91.
4Ibid, p.90.
5Ibid, p.90.
6
See Gee, S. (1981)
Technology Transfer Innovation and International Competitiveness,John Wiley and Sons, Inc., New York, pp.103-104.
7
Hans Singer is not convinced that the accumulation of science and technology in the North presents any great advantages and benefits
to latecomers. He condemns that “... it is because of the accumulation of science and technology, or rather the specific nature of this1T ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

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accumulation, that we witness much widespread failures of real development among the latecomers, belying the unthinking optimism ofearlier days”. Singer raises two principle objections. One, a large part of the simple accumulation of science and technology in the North is unlikely to benefit the South mainly because the knowledge is idiosyncratic and distinctively unique to the
problems, circumstances, factor endowments, and requirements of the North. Two, there is a continuous process of displacement ofprevious knowledge as new science and technology are created. The submergence of this knowledge when new innovative changes are
introduced implies that it is displacement rather than accumulation that takes place. What also needs to be added
is that a large part of this knowledge is protected by patents and forms intellectual property rights, and is therefore not freely obtainable. The
high cost of technology has slowed down the South’s industrialization process. For an elaboration of Singer’s view on the transfer of technology, see Singer, H. (1975) “Science and Technology for Poor Countries” reprinted in G. Meier (1976) Ibid,
p.395-397.
8
Kemp, T. (1978)
Historical patterns of Industrialization, Longman, England, p. 147.
9
As the 19th

century came to a close, Japan fought and defeated Chine in an unexpected military assault. At the turn of the new century, Japan’s military adventurism was directed at Russia and defeated the latter most resoundingly. With this success, the imperial
temperament was being sharpened, and Japan, like the imperial forces of Europe, was bent on carving out spheres of influencein the Pacific region of the world.
10

ibid, p. 147.
11
Consult, for instance, to appreciate the prodigious scale of bibliographical references on Japan.
12
Mikes, G. (1983)
The Land of the Rising Yen,
1983 Reprint, Penguin Books, p.14
13
Ibid, p.15.
14
See UNCTAD (1978)
Case Studies in the Transfer of Technology: Policies for the Transfer and Development of Technology in pre-war
Japan (1868-1937),
UNCTAD, Geneva, TD/B/C.6/26, p.VI.
15
Ibid, UNCTAD, 1978, pp.vi-vii.
16
Ibid, UNCTAD, 1978, P.14.
17
See U.S. Congress, Office of Technology Assessment (1991), Competing Economies: America, Europe, and the Pacific Rim, OTA-ITE-498, Washington, D.C., U.S. Government Printing Office, p.312.
18
Ibid, p. 312.
19.This section is a review of an article titled “Jiangyou Project Maximizes Technology Transfer”, prepared by the staff ofModern Power System, (1991) vol. 11, Issue 1, January, pp. 39–49.
20.There is evidence that suggests that financial packages organized by contractors may not necessarily constrain the utilization of domestic
manpower resources and indigenous capabilities. The petrochemical industry in Korea had its finances arranged by the contractors, Dow
Chemicals, but technological imperatives guided the acquisition of technology and subsequent utilization of in

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house resources and domestic capabilities. See Enos, J.L. and W.H. Park (1988)
The Adoption and Diffusion of Imported Technology: the Case of Korea,
Croom Helm, London.
.UNCTAD (1990) notes: “. . . too hasty import substitution of a large number of low cost items and lax quality control at sites caused
additional serious problems. Inadequate testing facilities and lack of experience of technicians and engineers led to problems duringcommissioning and too long delays in reaching stable operating conditions and full load. . . . the upshot was that performance of the firstindigenous power plants, large numbers of which were manufactured with original design faults before any field data and feedback experience had become available, was poor.” (p. 13).
22
.India’s procurement strategy initially concentrated on licensing agreements with electric power firms in Czechoslovakia, United Kingdom,
USSR (now Community of Independent States (CIS), France and Germany. A large number of power projects were thus initially
undertaken by overseas firms. It is this early experience of heavy foreign presence, against the background of government declaration to
involve domestic firms, that raised questions of policy gyrations.
23.The World Bank began to shift its strategy from financing a whole package of foreign costs to one that allowed bilateral donors to chipin under a new arrangement calledcofinancing. Joint lending limits the capacity of a borrower to obtain favourable terms. There were attempts by the World Bank to subject India to thissort of manoeuvre. Hayter and Watson (1985) have noted that the Bank had extended to India a loan of $450 million for rural electrification.
But the Bank insisted that procurement of aluminium rods be made exclusively from the Canadian market. India refused by arguing thatthe rods were 45 % more expensive in the Canadian market than elsewhere; the Bank called off the
project as a result. This case illustrates that India’s public procurement was constrained by such policies. Many weak economies in dire need of rural electrification could fall victims to suchpolicy manoeuvres by the World Bank, but India’s technological history and quest for technological independence has given her the strength to secure better terms of procurement forcontinued national self
reliance. For an analysis of co
financing and its impact on procurement, see Hayter, T. and C. Watson (1985),
Aid: Rhetoric and Reality, Pluto Press, ch. 5.
21

5.

Global Conventions, Protocols and Agreements:
Solemn Promises and Lip-service Commitments

Since the publication of Our Common Future in 1987 and the inauguration of unprecedented
international environmental events thereafter, policymakers around the world have come to appreciate
the depth of interdependence between the various components of the global system. Though theidea of interconnectedness has much deeper historical roots, it acquired a more concrete expression
following Kenneth Boulding’s insightful article: The Economics of the Spaceship Earth (1968). But
what truly widened the discourse and heightened the consciousness about this notion was the highly
controversial study by the Club of Rome, Limits of Growth (1972). Paradoxically, the hostile reaction
it elicited from analysts and practitioners of mechanistic persuasion tended to cast the factor ofinterdependence into sharp relief. And yet, it was only after the milestone environmental events of the
1980s and 1990s that the agenda for international cooperation began incorporating solemn
commitments on technology transfer and flows of new and additional financial resources to developing
countries.
Undoubtedly, the era of sustainable development had been born. This concept, which underpinned
the essence of the Agenda 21 plan, made it crystal clear that the global challenges facing humankind
needed concerted international action if the race against time was to register phenomenal
achievements. For Africa, the mood fostered by the exigent environmental realities implied that thecommitments to promote and accelerate technology transfers would be honoured in accordancewith the principles of ecological sustainability. Hence the blessing in disguise occasioned by the
new temporal and global order.
5.1

Sustainable Technology Transfer as a Global Imperative

Would the western world be doing the Third World a favour by exporting to them environmentally-soundtechnologies at concessionary rates? Or would the flow of sustainable innovations to the South be a matterof global necessity? What would be the implications of the North holding back vital technologies needed
to develop the South?
This paper argues that the North is obliged to arrive at cooperative accommodation with the South in thelatter’s economic aspirations if the North itself is to be spared the horrors of ecological disasters waiting to
explode in the South. The disasters are likely to take two forms. One, the growth of inhabitable ecologicalconditions in the South, resulting from deepening environmental decay would trigger a wave of environmental
refugees to Europe and elsewhere reminiscent of the Vietnamese boat crisis the world witnessed a few
decades ago. However, the scale of the refugee crisis will surpass anything humanity has experienced in
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modern times. Two, the adoption of environmentally destructive technologies by the South will aggravatestresses to what are already strained ecological thresholds on renewable resources. The use of suchtechnologies would exacerbate pollution, aggravate climate change, accelerate ozone depletion, andworsen biodiversity destruction. All these adverse trends would ultimately reverberate to other parts of theworld now seemingly insulated from the latent crisis. These concerns are covered in the following sections:
5.1.1

Industrial ambitions, technological change and environmental decay

Despite audible declarations of intent to pursue sustainable development made by world leaders at the
Earth Summit at Rio in 1992, the global environment has continued to deteriorate in the five years since themeeting. The phenomenon continues to raise concerns about the ability of ecosystems to support human
livelihood and provide life-support functions in future. Anxiety is growing as to whether the carrying capacityof the environment is not already overstretched. It is also feared that human activities are inexorably driving
the planet to potential disaster. The question often posed about various ecosystems is whether theirpotential viability to deliver environmental services is not under severe threat already. Equally worrying
about the adverse trends are the effects of environmental degradation on human health, productivity andgeneral economic welfare.
The acceleration of environmental destruction has assumed ominous proportions in view of rapid population
growth, growing poverty, deforestation, effluent discharges, particulate emissions and general contaminationfrom industrial pollution and agricultural run-off. Energy consumption has risen sharply this century. Energy
inputs are an essential part of the development process. From cooking and travelling to the production andconsumption of goods and services, energy is a vital ingredient. In quantitative terms, the largest users ofenergy are the industrialized countries both in absolute and per capita measures. By 2001, the OECD
countries consumed a per capita ratio of 4500 kg per annum. In contrast, developing countries registered
500 kg per annum. While industrialized countries (ICs) rely heavily on non-renewable, fossil-based energy
sources, DCs depend overwhelmingly on non-renewable biomass sources.
Over the years developing countries have tapped only a small proportion of their vast hydro potential. At any
rate, the outcry stemming from the environmental implications of hydroelectric power development may
present future problems for exploiting water resources in some developing countries. India, for instance,
has recently experienced mounting pressure, occasionally culminating in violence, from a community
residing in the neighbourhood of a hydroelectric development project. The World Bank backed away fromthe investment as environmental sensibilities intensified. As funding agencies become more sensitive toenvironmental concerns, the exploitation of hydro reserves may not be easy in future. Inevitably,
environmentally-sound alternatives will have to be considered highly in energy planning for developing
countries. But if the patterns of economic change in developing countries in the last decades are anything
to go by, then their levels of energy consumption are set to increase. The increase has been accompanied
by greater use of fossil-based fuels as manufacturing production expanded.
At least three distinct processes are expected to generate higher levels of pollution. First, the growth inindustrial production will rise relative to agriculture, implying a pronounced growth in fossil-fuel consumption.

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The pollution consequences of this structural change will be intensified adversely as industrial modernization
broadens. Second, manufacturing processes are intensely pollution-prone, such that the wastes generated
and the emissions discharged will have a detrimental effect on the environment. Third, the expansion of
the manufacturing sector relative to agriculture will produce a labour force with higher incomes and amore diversified demand structure. Consequently, the emerging high-income groups will reveal a partiality
for goods with a high income elasticity of demand. These are largely manufactured products whoseenergy requirements are invariably far greater than those needed to generate agricultural output. For thisreason, the growth of the manufacturing industry is likely to induce a sustaining momentum for moreenergy-intensive goods and services. In general, therefore, the process of industrialization is expected to
produce wastes with far-reaching pollution consequences for many a developing country.
It is evident from many development plans that developing countries (DCs) are aspiring to industrialize
rapidly in the next 20 years. Efforts to achieve industrial objectives have continued to receive considerable
government support. DCs hope to replicate and even leap-frog where necessary, the stages of growth anddevelopment experience of ICs during their evolutionary history. The desire to modernize takes on thecharacteristic content of existing industrial societies. Unfortunately, even though there is widespreadappreciation that the environmental cost of western industrialization has been very heavy and that it continues
to exert its ecological toll in adverse ways, many developing countries are still wedded to the ambition of
replicating the industrial structures of the west. 1 How much of a model is the western pattern of industrial
development to developing countries?
In retrospect, a number of ICs have conceded that the approach they used to achieve high standards ofmaterial prosperity have been environmentally destructive. Since this acknowledgement, efforts havebeen underway to develop environmentally-friendly technologies and engage the new innovations inindustry and agriculture. A growing number of firms, responding either to government regulations, economic
incentives or sharper consumer sensibilities towards greener products, have spearheaded a series ofinnovations to protect the environment. These developments are of enormous ecological value to developing
countries. However, the innovations are expensive and may not be within the reach of nearly all DCs. The
absence of a truly serious global partnership in techno-environmental matters will thus mean further
deterioration in the planet’s environmental health.
5.1.2
Diffusing environmentally-sound technologies
Conservative estimates from leading international organizations predict that the vast economic
expansion planned by many developing countries is set to be a major source of greenhouse emissions
in the next 25-100 years. It is widely recognized that industrial growth in industrialized countries has
been responsible for much environmental degradation now threatening climate change and theworld’s biodiversity. Environmental fora worldwide have generally agreed that industrialized countries
should take decisive steps to remove these threats. But equally appreciated has been the needexpressed mainly in the South that the North should bear a significant part of the cost of the South’s
ambition to industrialize sustainably. The need, therefore, to formulate an international environmental
technology transfer programme to minimize net releases of greenhouse gases to the atmosphere is not
only essential but also vital in pursuing international sustainable development. There is every indicationthat assisting developing countries in addressing local environmental problems would contribute

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appreciably to global environmental protection. The ambition to mitigate greenhouse emissions thus
requires global environmental stewardship that would facilitate the transfer of environmental
technologies to developing countries. Given that energy needs in developing countries will double in thenext 20 years, and in view of the challenge to curtail global ecological threats, the necessity to send
cleaner production technologies to the South is overwhelming. In terms of energy efficiency, Kasman(1992) notes:“Efficiency can be increased—often with considerable cost saving—by improvements in the method of power generation, including better
managerial, operational and maintenance practices; by increasing theuse of renewable energy technologies and less-polluting fuels; byintroducing new equipment or appliances; and by improving the designof buildings and manufacturing processes so as to reduce energy
consumption. The elimination of price-subsidies by some countries
would also lead to greater energy conservation and efficiency.”2Technological advances will have to cover a wide-range of sectors including energy, industry, transport,
agriculture, and the management of natural resources. The urgency to facilitate technology transfer stems
from the realization that the emission of greenhouse gases poses one of the most grievous risks to
mankind.3 As the body of scientific evidence grows, it becomes more critical that the issue has to beaddressed in all its diversity. The catalogue of harmful effects outlined in study after study emphasizes theneed for a rapid and sustainable response to the problem. In the anthropogenic sense, green house gases
are a product of technology. It is a technology that has gone wrong right from its infancy. And given its
dysfunctional base, new technological solutions have been sought to initially minimize and finally exterminate
the problem. The search for sustainable technological options was thus a reaction to mankind’s erstwhile
technological achievements.
What are these gases and how is humanity affected by them? What sustainable technologies have beendeveloped, and what experiments are currently underway? How should developing countries in general,
and Africa in particular, respond in the face of the global environmental crisis? Are public domain
environmentally-sound technologies available to be exploited by Africa? And how can global partnershipand cooperation help the world escape the impending disaster?
Both carbon dioxide and chlorofluorocarbons (CFC) emissions are responsible for changes in climate,even though the latter has direct impact on ozone depletion, a factor that allows penetration of harmful
ultraviolet radiation (UV-B) onto the earth’s surface. This raises the incidence of skin cancers, impairs the
body’s immune system, and raises the spectre of more blindness cases. In the case of cancers, both nonmelanoma and melanoma varieties increase and even cause deaths. The enervation of the body’s
immune system increases the incidence of infectious diseases such as tuberculosis, sexually transmitted
diseases, fever, malaria, chest infections, colds, and meningitis. Blindness and varieties of eye infections
also afflict humans and animals as UV-B finds its way down. Estimates indicate that cataract problems willrise by 0.6 % if the ozone-layer is depleted by one %.

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Penetration of UV-B onto the earth’s surface will also disrupt the vital ecosystem functions and life-support
systems. Many microorganism and aquatic creatures are affected adversely in ways that destroy the foodchain cycle. The web of interdependence is disrupted and affects fisheries (UNEP, 1992:12).
Additionally, the destruction of stratosphere ozone by CFCs alters the climate patterns adversely. Irregularities
in weather patterns impact negatively on agricultural production, yield levels, and plant resistance todiseases and pests. Food security is thus threatened.
The disruption of ozone-layer by CFCs and the accumulation of carbon dioxide in the atmospherecombine to increase global warming. A good number of reports predict that the doubling of carbon
dioxide concentration in the atmosphere by 2030 would increase the global temperature between 1.5
degrees centigrade and 4.5 degrees centigrade. Based on these estimates, a disturbing scenario has
been advanced. The world is expected to experience a dramatic rise in sea level at a rate of 6 cm per
decade. By 2030, the effects will be visibly grievious, the rise gobbling up low-lying coastal areas andislands. These adversities will set in motion a wave of environmental refugees as more productive landis salinized, as freshwater resources are contaminated, and as fishing grounds are disrupted. Moreover,estuaries and deltas will be permanently flooded, thus reducing agricultural production.
Another predicted impact of climate change is the increased precipitation globally. Early indications
point to mixed results even though dangers still persist about possible adverse trends. It is surmised thatprecipitation will vary regionally with some areas expected to suffer water resource problems. In othercases, increased rainfall would intensify leaching, increase floods, and accelerate soil erosion. Higher
sediment loads in rivers is thus expected to affect coral reef ecosystems. On the other hand, regions
rich in forest cover may experience richer growth and soil conservation. Some agricultural areas arelikely to witness weed proliferation, which will intensify competition and affect agricultural yields
negatively.
It is now well established that global warming and high temperatures condition plant growth andeffectively boost agricultural production. However, higher temperatures also create a congenial
environment for rapid weed growth and pest proliferation. So while crop yields are likely to rise, weeds
and pests may compromise agricultural productivity. In addition to such expectations, higher
temperatures will require extra sustainable refrigeration facilities. Such temperatures are likely toaccelerate decay of livestock and agricultural products unless they are cooked and stored well.
Two further effects are the high evaporative demand, and the degeneration of soils and the onset of theirinfertility. Both these are consequences of high temperatures accompanied by increased levels ofcarbon dioxide concentration. Weed growth, forest productivity and crop yields are expected to be more
pronounced. This effect is likely to be temporary as soils will be overused. Danger looms of soils losing
nutrient value rapidly, of pests proliferating excessively, and of diseases spreading widely.
In view of such frightening expectations and real dangers of green house gases, it is difficult forhumanity to just sit back and do nothing.
5.1.3
Industrial acidification and global environmental degradation
The nature of atmospheric pollution and the adverse climatic changes that such emissions entailemphasize the risks posed by transboundary spillovers. Already evident in a number of pollution cases isthe extensive effect of environmental problems beyond their immediate localities. Emissions are, in
general terms, regional in their effects and global in their repercussions. Problems of sulphur

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precipitation and acidification are not confined to the sources of emissions, but cross boundaries andtraverse through regions.
In addition to widespread damage on water quality, fisheries and aquatic life in general, acidification
has also gravely affected the wholesomeness of soils through leaching. Most of the leached metals findtheir way into the lakes, reservoirs, rivers, canals and other water bodies, exacerbating the alreadyprecarious balance of aquatic life. In other words, acidification of wetlands has been worsened byeutrophication, a process that adds massive nutrients from agricultural run-off, industrial sources, andhuman settlements. Eutrophication causes microphyte overabundance, toxic algal blooms andsuboptimal growth of other aquatic plants. (Eutrophication is the overloading of wetlands and water
bodies with nutrients that distort ecosystem balances). Some of the most visible, and undoubtedly,
poisoning aspects of eutrophication include: offensive water odours and tastes, impairments of fisheries
and spawning grounds, limited sunlight penetration into the lower reaches of water bodies, oxygen
depletion from microphyte and algal overgrowth, large water losses through evapo-transpiration,disease infestation in algal breeding grounds, water quality deterioration and discoloration, and artificial
navigational hindrances from microphyte overabundance.4
Acid rain containing nitrous oxide is bound to poison wetlands and aggravate eutrophication.
Acidification also affects forests adversely though the effects of sulphur dioxide and nitrous oxide
emissions from automobile and vehicular sources are also harmful. At least over 55% of Europe’s
forests have been damaged by acid rain. The problem takes long to notice, but overwhelming evidence
already suggests less vigorous growth of forests in the United States and Germany. 5
Two further acid rain effects are: disfigurement of buildings and destruction of vegetation by aciddeposition, threatening ecosystem functions and losses of biodiversity. The interlinkages between one
ecosystem and another raises the spectre of spreading damage beyond the vegetation system affectedby acidification. In areas where losses are already being felt, the danger of completely wiping out genes
and species of known and unknown plants and animals clearly creates the possibility of denying
humanity possible advancements in agriculture, medicine, and industry. As the genetic base isthreatened by acidification, humanity’s potential to exploit biotechnological genetic variation to increase
production of energy, biological pesticides, medicines, food products, industrial chemicals, and otherenvironmentally-sound resources will be substantially compromised. Policy initiatives should be set inmotion to enable humanity benefit appropriately from the rich heritage of biodiversity. Control ofemissions that lead to acid rain is thus vital.
Many buildings in Europe, United States and other countries have been disfigured by acid rain. The
acidic condition of the environment has also raised costs of restoration, repair and maintenance. It is
worth noting that the costs of rehabilitation are equivalent to the sums needed to erect pollutionreducing technologies in gas emitting plants. 6 Despite these extra-territorial externalities, DCs continue
to meet considerable resistance when they urge ICs to support environmental programmes bysupplying the relevant sustainable technologies to firms in the South. Yet, the global “commons” willcontinue to be damaged if only the ICs concentrate on them. To ignore the participation of DCs is toinvite further ecological decay. Global efforts and collective partnership remains the only option forhumanity.
5.1.4
The ozone-depleting substances and international cooperation

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Nowhere is this concern more clearly defined than in the continued use of ozone-disruptive
technologies. Anxieties about the impact of greenhouse gases on global climate has intensified inrecent years as scientific consensus becomes more evident. Two broad categories of gases are
responsible for global warming. One is heat-absorbing; the other is ozone-destroying, which allows
more of the sun’s radiation to penetrate the earth’s atmosphere. Carbon dioxide and methane are theheat-absorbing gases; on the other hand, nitrous oxides and CFCs are the ozone-depleting emissions.
Since the first industrial production in 1930, the use of CFCs has grown phenomenally in industrializedcountries. For over four decades, CFCs consumption has been perceived as innocuous. Doubts about
their safety began to emerge in the 1970s as more evidence indicated the harmless stereotype thatcame to be associated with CFCs. The earliest concerns were registered in the late 1960s following
nitrogen oxide emissions from supersonic aircraft. The very hot gases were released at an altitude ofabout 20 km; they persisted and rose to the region of stratospheric ozone about 25 km from the earth’s
surface. Here, the oxides catalyzed the destruction of ozone. But much more virulent on stratosphericozone are the CFCs. Under the influence of ultra violet radiation, a chlorine atom is set free from the
CFC molecule, which then attacks the ozone layer. The disruptive effect of a released chlorine atom ismultiplicatively extensive, implying that an unsustainable build-up of CFCs in the stratosphere could
easily result in a gaping hole in the sky. This is already evident. In the event, harmful ultraviolet radiation(which is naturally blocked by the ozone layer) penetrates to the earth’s surface. Its penetration causes awide catalogue of damages.
This recognition set in motion a series of events geared to reaching an international control agreement
on CFC production and use. Since the early 1970s, various Protocols were signed on emission targets
but the process was characterized by deep controversies. The year 1980 is regarded as a baseline year
for emission standards, with many countries pledging to cut emissions to the 1980 level.
The Helsinki Protocol of 1985 underlined the commitment by a few signatories to cut sulphuremissions to the 1980 level. Many more protocols have since come into being, including the 1987
convention on the reduction of sulfur emissions or their Transboundary Fluxes. The 1988 Protocol
concerned the contents of emissions of nitrogen oxides or their conventions aimed at cutting backemissions by a target and/or freezing emissions altogether beginning 1993 and 1995 respectively.
On sulfur emissions, major disagreements have stemmed from the differential costs and benefits aseach country is expected to adhere to the set, standard target. Given the contrasting cost curves fordifferent countries in meeting a commonly uniform target, there are concerns that a single abatementlevel would not reflect equity of involvement. To be realistic, reduction targets must reflect general cost
structures of each country. This means that every country will come up with its own abatement target sothat the overall emission level is achieved. The system of tradeable permits is thus bound to integratedifferential cost variations between countries. The concept of cost-effectiveness may not after all lead toan all-inclusive result.
Following the important uses in critical aspects of life, consumption of CFCs began to increase rapidly.
CFCs found major uses in refrigeration and air conditioning systems, as cleaning solvents in theelectronics industry, as propellants and solvents in aerosols sprays, and in the production of foams forinsulation and food packaging. CFCs are also used in fire extinguishers. The technology of storage
refrigeration has become vital in homes, industries and transportation. Refrigeration extends thelongevity of biodegradable products, reduces losses of perishables, minimizes costs associated with

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decomposition, ensures non-deterioration of biodegradables which have to be transported over long
distances, and preserves agricultural, livestock, pharmaceutical and marine goods susceptible todecay. The range of products that can be protected from putrefaction is so wide that industrial
civilization will cease to function without refrigeration technology. Cooling and deep-freezing facilities
have increased sharply in industrialized countries, as well as in Arab states.
Use of air conditioning systems has also become widespread, especially in the oil-rich Arab countries
where the climate is baking hot and humid. Consumption has also risen remarkably in the tropics andsub-tropics. Both refrigeration and air-conditioning systems have become indispensable in industry,
households and offices in many countries. And so have aerosols and plastic foam products.
Of about half a dozen CFCs known in the world today, only two are very widely used, CFC-11 and CFC12. But these types also have the highest ozone-depletion potential. Recognition of their actual andpotential menace has provoked governments, environmental lobby groups and internationalorganizations to exert pressure on industries to develop ozone-friendly technologies. By setting emission
targets, and a time-table to phase-out CFCs, the international institutions have redefined the agenda ofmany industries involved in the production of ozone-depleting substances.
A major watershed in international negotiations was reached in 1987 when the Montreal Protocol on
substances that deplete the ozone layer was signed. It was adopted in 1989, and underlined theobjective of reducing CFCs and halons production to 1986 levels. Subsequent amendments to theProtocol underscored phasing-out the production of ozone-depleting substances by the year 2000. A
Multilateral Fund was set up to facilitate compliance of the Protocol and assist developing countries
obtain the relevant technology from industrialized nations. Despite interest expressed by some countries
the Fund has so far only received about 27% of the pledged contributions.
Even before environmental diplomacy reached its high-water mark in 1987, unilateral efforts to limit
production of ozone-destroying substances had started in the late seventies when the US banned theuse of non-essential aerosols. Other countries, like Sweden, Canada, Norway and then Soviet Union,
followed suit. The paramount influence of UNEP in major discussions, and the cumulative impact
ultimately gave birth to the Vienna Convention for the Protection of Ozone Layer in 1985.
Following the environmental breakthrough of 1987 and the amendments made thereafter, many
countries spearheaded regulatory national legislation to implement provisions of the Montreal Protocol.
Some multinational companies have since invented resources to develop sustainable alternatives to
CFCs and halons. DuPont had said that it was phasing out CFC production by 1994. The electronics
industry has several options available, from a new biodegradable solvent made from oranges to waterbased cleaning systems. A significant number of firms within the developing countries use non-CFC
refrigeration technology, the focus now being on two major alternatives, hydrochlorofluorocarbons(HCFCs) and hydrofluorocarbons (HFCs). 7
A new association, the Industry Cooperative for Ozone Layer Protection (ICOLP) is made up of firms that
pledge to provide non-CFC technologies to DCs and ICs. Digital Equipment Corporation, a member of
ICOLP, has announced that it will provide water-based cleaning system technology freely and without
restrictions. Although HCFCs contain chlorine atoms, the product is only remotely damaging to theozone layer. Efforts are underway in the US (which accounts for over 85% of global CFC production) to
introduce substitutes that will ensure world dominance in this field. CFC technologies are no longer

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protected under patents, but many firms have “vowed” not to transfer these technologies to nonsignatories of the Montreal Protocol.
The search for alternatives has also led to increased knowledge about the existence of public-domain
technologies. Many developing countries could be advised to exploit these substitutes that are cheaperand more energy efficient. The propane/butane refrigeration technology is in the public domain, but in
addition to exploiting this technology anew, opportunities also exist to drain and collect CFCs in models
being used currently. Refrigerators can then be refilled by the propane/butane mixture without the risk oflegal penalties. Such refitting modifications are not patented and need to be used widely by developing
countries. 8
From the signed Protocol, and subsequent amendments and pledges made by various countries andcompanies, it is obvious that the world will still produce and consume CFCs for some time to come. It
will be some time before the actual phasing-out begins. But what happens during the interregnum? As
new technologies are generated, what should be done to the thousands of tons of CFCs currently being
used?
While substitute technologies are being developed, huge amounts of CFCs are still in wide use. In
recent months new devices have been produced to recover CFC refrigerators from existing systems.
Recovery and recycling of ozone-depleting substances (ODS) realizes huge savings in ODS-plants,
electronics industry, and refrigeration systems. 9 Wilkinson (1990) cites an IBM plant in Germany thatrecycles about 90 % of CFCs used. He further observes that nearly all CFCs used in the foam blowing
industry is recoverable, as are the CFCs in discarded refrigerators. 10
Predictions about the rapid growth and use of CFCs in developing countries, particularly in China andIndia, prompted a number of signatories of the Montreal Protocol to exert pressure on the relatively
advanced developing countries (RADCs) to ratify the Protocol. But the RADCs, weary about the ICs’
reluctance to share in ozone-friendly technologies, sought ways of accessing non-CFC innovations.
The Multilateral Fund was set up to assist developing countries participate effectively in phasing out
CFCs. But in addition to the broad financial requirements, many DCs have also identified technology
transfer as crucial in the debate.
Unfortunately, the technological question has largely been conceived in proprietary terms. The
protection of new non-CFC technologies under patent regimes in the ICs has meant that the flow to the
DCS (if the past is anything to go by) will be constrained, limited and paltry. The promotion of technology
transfer to DCs is to complement the process of fostering domestic technological capacities. Now thatthe public domain, ozone-friendly technologies are available, the participation by DCs in the global
agenda to eliminate CFCs might well bypass the technological veterans in ICs. Furthermore, ICOLP
has created a database, OZONET, which is geared to facilitate information flow on non-CFC
technologies. The DCs should participate in the information network and tap the critical knowledge.
Major chemical firms in ICs are likely to suffer market losses in the event of widespread diffusion of
public-domain technologies. China and India are the two countries most eager to obtain non-CFC
technologies. They have also depended on IC firms to obtain a range of products using CFCs. But the
propane/butane technology promises to make them self reliant and substantially undercut markets ofsome well known transnational corporations.
While the patent/proprietary factor has been a constraint to technology transfer to DCs, otherconsiderations have also tended to impede the flow of clean technologies. These include: dearth of

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relevant information, cost and economic factors, legislative and regulatory climate, and absorptive
capacities in DCs. 11
The industrialized countries are particularly worried about the potential consumption of CFCs by India
and China though they feel that the rest of the developing world would also use large volumes of theozone-depleting substances. Indeed, economic expansion of the two most populous countries in theworld would lead to a sharp rise in the demand for products and processes that use CFCs. Two maintechnological types will need to be transferred - the innovations that replace the CFCs, and thetechnologies behind the goods and services to be used widely in a growing economy. The latterinclude air-conditioners, refrigerators, commercial and industrial coolers, foams, and cleaning
processes in the production of medical and electronic devices. 12
In some important respects, the Montreal Protocol is a milestone in international cooperation. But it will
only fit this bill if the industrialized countries truly take momentous steps to transfer non-CFC
technologies to developing countries. As is evident, the new ozone-friendly alternatives are expensive
because of the shift that has to be made from the present destructive system. Given the costs involved,
industrialized countries would be required to subsidize non-CFC technological flows through financial
and technical assistance programmes under additional, concessional and incremental means. 13 On
the additional factor, developing countries insist that new and additional resources should be madeavailable to address the technologization process rather than divert funding from earmarked allocations
and existing levels to invest in non-CFC technologies. On the concessional factor, developing countries
are emphasizing the need for the North to supply resources at less than commercial rates. They alsostress that the funding should be grant-based. Unfortunately, even though grant-based arrangements
can go a long way in reducing debt obligations, the danger of such a system is that the long-term
technological evolution of a third world economy would be substantially compromised. This is because
grant-based arrangements tend to involve technological resources of the grant-giving country,
marginalizing domestic technological capacities where they exist. Finally, the shift to non-CFC
technologies entails significant costs not only in studies to determine country profiles and the various
needs but also in building the necessary infrastructure to enable developing countries assimilate the
new innovations.14 This would include training to build the requisite manpower; institutional innovations
suited to the introduction of the non-CFC technologies; and informational requirements vital for constantreference.
The World Bank had set aside a paltry sum of US$160 million in a new fund for addressing the ozone
problem. But compared to aid flows, this figure is too tiny to confront the magnitude of the problem. It isdifficult to see how additional, concessional, and incremental requirements can be met with suchmodicum funding. The pledges made by the World Bank to increase the amount in the event of China
and India joining the Montreal Protocol is far too minute to deal with the problem in all its diversity. Yet,technology transfer and financial assistance are at the core of phasing out CFCs in developing
countries. Both are limiting factors in phasing out CFCs. Unless these twin imperatives are embraced intheir complexity, the rejection of CFCs by developing countries may not be realized. This is because thetransition will be carried out in fits and starts; the adoption of alternative technologies will not be efficientand the North will also lose the opportunity to market the substitutes to developing countries. But worse,
the world will have more problems arising from ozone-depletion.

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According to World Bank projections, many developing countries have registered a growth of at least 6% a year in total energy use. The increase in demand or energy use is thus set to increase substantiallyin the near future especially in view of the anticipated rises in population. Moreover, increases in
economic growth in general would translate into large growth in emissions in developing countries. In
cumulative terms, the emission volumes are likely to exceed those of the industrialized countries in amatter of decades. 15
Indications show that these trends will continue something that portends a worsening of the global
warming problem in the years to come. Since global warming is an international problem, and theemerging crisis has been precipitated by the industrial growth of the west, there is a strong moral,technological, and financial obligation on the part of the industrialized countries to assist developing
countries pursue growth without exacerbating greenhouse gas emissions in the process. As in the caseof ozone diplomacy covered above, technological and financial matters are at the core of the global
warming problem in international cooperation. In this respect, industrialized countries should promote
the use of renewable energy sources and push for the adoption of policies and practices that stimulateenergy efficiency in production activities. By addressing these twin objectives, the level of emissions will
be reduced dramatically as countries in the South industrialize.
But efficient use of energy through measures cited above will also reduce emissions if deforestation is
reduced substantially. The rate of greenhouse emissions will be slowed down if a big switch is made to
non-fossil fuel energy sources. By moving away from heavy wood fuel use, pressure on biodiversity willbe alleviated. But such shifts will entail retrofitting expenditures. Where possible, a switch could bemade from coal to natural gas. If leaks are minimized and distribution of gas is enhanced, majorsavings will be realized. The main effect would be a reduction in carbon emissions by over 15 %.
In most cases, introducing energy efficiency schemes could save considerable amounts of fuel. It isestimated that steam power plants in developing countries use between 20 % and 45 % more fuel ingenerating one kWh of electricity. Losses in distribution and transmission are also very high, pitched atover 30 %. Moreover, capacity utilization is low due to lack of maintenance and limited operational time.
Outages are also inordinately high. Energy efficiency has been equally low because of persistent
voltage fluctuations. 16
The transfer of cost-effective technologies to developing countries would also go a long way in slowing
down greenhouse gas emissions. For instance, several options exist that can do this including theacquisition of cogeneration systems in electricity generation, the use of industrial motors with variable
speed drives, employing better lighting, water-pumping, heating and refrigeration systems, and reducing
transmission and distribution losses through more efficient capacitors. 17
Currently, both the North and South should tackle the technical and institutional obstacles frustrating the
adoption of environmentally-friendly technologies in the field of energy. Developing countries should be:
assisted with capital to purchase technology; equipped with capacities to secure access to relevant
information; supported in reforming institutional structures in the energy sector; and should not bedenied cleaner production technologies that have just appeared on stream.18
Maltezou (1992) identifies several constraints to clean technology transfer to developing countries. She
notes, first, that developing country environments are characterized by lack of information on the relevant
technologies and the skills to handle them. Second, come the cost and economic factors associatedwith possible acquisition of the technologies. Incentives to initiate procurement of such technologies

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are almost non-existent. The third drawback concerns the absence of a legislative and regulatory
climate that would penalize polluting technologies and reduce uncertainty in investment decisions
made by prospective firms. And finally, the sheer lack of adequate physical and institutional capacities,
including the absence of requisite absorptive capabilities, tend to exert a limiting influence on theSouth’s determination to secure clean technologies from the North. An additional factor is the lack ofadaptive managerial and organizational structures, 19 including a heavily bloated bureaucratic
mechanism underpinned by gross inefficiency, lack of accountability, and absence of transparent
operational procedures.
Maltezou advances several important recommendations. They include: establishing data banks onclean production technologies; creating an effective technology design capability; building humancapacities; creating an effective regulatory and institutional framework for standards and quality control;
evolving capabilities for technology needs assessment; promoting clean production technologies in theindustrialization process; and finally, establishing cleaner technology production centres. 20
5.2

Global Commitments and Africa’s Prospects for Building Eco-Capabilities

The conclusion of the Earth Summit in Brazil in June 1992 would be most remembered for two
processes: the consensus reached by world leaders on how the global community intended to move
forward in its development aspirations; and how it sought to achieve the goal of sustainable
development through binding international agreements. The consensus was reflected in the initiative
called Agenda 21, which, in simplicity, represented a Plan of Action describing the methods,
processes, practices, and mechanisms that sovereign states around the world would adopt and use
in their sustainable endeavours.
The international agreement process was epitomized by world leaders signing two paramountdocuments, namely, the Convention on Biological Diversity (CBD) and the United Nations Framework
Convention on Climate Change (UNFCCC). Although national governments needed to ratify theconventions, which many did, to transform them into binding instruments of international law, thevery expression of commitment by leaders to fulfil obligations through international cooperation wasa decisive moral victory. It was clear that, for the wide range of critical environmental and development
problems confronting humanity, the most sustainable solutions would demand concerted international
action in all its diversity.
But two fundamental parameters tended to underpin all planned efforts at cooperative engagements:
finance and technology. In relative terms, the rich industrialized countries of the North were not only
indicted as the worst polluters globally, but were also the most technologically and financially endowed
stakeholders in the global system. Naturally, the poor countries of the South looked to the North forassistance and support. Indeed, if the provisions in Agenda 21, CBD, and UNFCCC were anything to
go by, then the expectations of the financially stricken and technologically starved developing countries
were not entirely speculative.
5.2.1

Commitments under Agenda 21

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Consider, for example, the international proposals specified in the various chapters of Agenda 21.
This plan of action devotes chapter 34 exclusively to the issue of technology transfer throughinternational cooperation. The objectives are:
•
•

•

•

5.2.2

To help to ensure the access, in particular of developing countries, to scientific andtechnological information, including information on state-of-the-art technologies.
To promote, facilitate, and finance, as appropriate, the access to and the transfer ofenvironmentally sound technologies and corresponding know-how, in particular todeveloping countries, on favourable terms, including on concessional and preferential terms,
as mutually agreed, taking into account the need to protect intellectual property rights aswell as the special needs of developing countries for the implementation of Agenda 21
To facilitate the maintenance and promotion of environmentally sound indigenous
technologies that may have been neglected or displaced, in particular in developing
countries, paying particular attention to their priority needs and taking into account thecomplementary roles of men and women
To support endogenous capacity-building, in particular in developing countries, so they
can assess, adopt, manage and apply environmentally sound technologies. This could beachieved through inter alia:- Human resource development- Strengthening of institutional capacities for research and development andprogramme implementation- Integrated sector assessments of technology needs, in accordance with countries’plans, objectives and priorities as foreseen in the implementation of Agenda 21 at
the national level.
- To promote long-term technological partnerships between holders ofenvironmentally sound technologies and potential users.
Commitments under the Convention on Biological Diversity (CBD)The Convention on Biological Diversity, like Agenda 21, also specifies the obligations binding
contracting parties on the issue of access to, and transfer of, technology. Article 16 of the Convention
states:••Each Contracting Party, recognizing that technology includes biotechnology, and that bothaccess to and transfer of technology among Contracting Parties are essential elements forthe attainment of the objectives of this Convention, undertakes subject to the provisions of
this Article to provide and/or facilitate access for and transfer to other Contracting Parties oftechnologies that are relevant to the conservation and sustainable use of biological diversity
or make use of genetic resources and do not cause significant damage to the environment.
Access to and transfer of technology referred to in paragraph 1 above to developing countries
shall be provided and/or facilitated under fair and most favourable terms, including on

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•

•

•

concessional and preferential terms where mutually agreed, and, where necessary, in
accordance with the financial mechanism established by Articles 20 and 21. In the case oftechnology subject to patents and other intellectual property rights, such access and transfer
shall be provided on terms which recognize and are consistent with the adequate andeffective protection of intellectual property rights. The application of this paragraph shall beconsistent with paragraphs 3, 4 and 5 below.
Each Contracting Party shall take legislative, administrative or policy measures, as
appropriate, with the aim that Contracting Parties, in particular those that are developing
countries, which provide genetic resources are provided access to and transfer of technology
which makes use of those resources, on mutually agreed terms, including technology
protected by patents and other intellectual property rights, where necessary, through theprovisions of Articles 20 and 21 and in accordance with international law and consistent
with paragraphs 4 and 5 below.
Each Contracting Party shall take legislative, administrative or policy measures, as
appropriate, with the aim that the private sector facilitates access to joint development andtransfer of technology referred to in paragraph 1 above for the benefit of both governmental
institutions and the private sector of developing countries, and in this regard shall abide by
the obligations included in paragraphs 1, 2 and 3 above.
The Contracting Parties, recognizing that patents and other intellectual property rights may
have an influence on the implementation of this Convention, shall cooperate in this regard
subject to national legislation and international law in order to ensure that such rights aresupportive of and do not run counter to its objectives.

The technological imperative is also stipulated in Article 18, which addresses the theme of Technicaland Scientific Cooperation. Here, the Convention asserts:•••

Each Contracting Party shall promote technical and scientific cooperation with other
Contracting Parties, in particular developing countries, in implementing this convention,inter alia, through the development and implementation of national policies. In promoting
such cooperation, special attention should be given to the development and strengtheningof national capabilities, by means of human resources development and institution building.
The Contracting Parties shall, in accordance with national legislation and policies,
encourage and develop methods of cooperation for the development and use of technologies,
including indigenous and traditional technologies, in pursuance of the objectives of thisConvention. For this purpose, the Contracting Parties shall also promote cooperation in the
training of personnel and exchange of experts.
The Contracting Parties shall, subject to mutual agreement, promote the establishment ofjoint research programmes and joint ventures for the development of technologies relevantto the objectives of this Convention.

The above provisions of the Convention can only be made good if financial resources are availed todeveloping countries. The obligations are expressed in the following vein:

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•
•

•

67

The developed country Parties shall provide new and additional financial resources toenable developing country Parties to meet the agreed full incremental costs to them of
implementing measures which fulfil the obligations of this Convention.
The developed country Parties may also provide, and developing country Parties avail
themselves of, financial resources related to the implementation of this Convention throughbilateral, regional and other multilateral channels.
The extent to which developing country Parties will effectively implement their commitments
under this Convention will depend on the effective implementation by developed country
Parties of their commitments under this Convention related to financial resources andtransfer of technology and will take fully into account the fact that economic and social
development and eradication of poverty are the first and overriding priorities of the developing
country Parties.
The Parties shall take full account of the specific needs and special situation of least
developed countries in their actions with regard to funding and transfer of technology.

The above commitments binding the contracting parties clarify how the developed countries are
obliged to promote and facilitate technology transfer to developing countries. Yet, evidence showsthat such transfers have not occurred to any appreciable extent.
5.2.3

Commitments under the UNFCCC, joint implementation and techno-financial
imperatives

Perhaps the most significant development in eco-diplomacy in recent years concerns the attempt by many
countries to reduce greenhouse gas (GHG) emissions under the United Nations Framework Convention
on Climate Change (FCCC). The efforts have been underpinned by commitments to finance emissionsreducing or sink-enhancing projects in other countries. This drive to “...stabilize GHG concentrations in theatmosphere to levels which will prevent anthropogenic interference with the climate system” led to theformulation of a device hitherto referred to as “joint implementation”. The instrument is now more popularly
known as “Activities Implemented Jointly” (AIJ). It is an international mechanism that has opened up
economic opportunities and technological possibilities for reducing emissions between countries inclined
to meet global obligations through techno-financial cooperation.
The first meeting of the Conference of the Parties (COP) agreed that bilateral transactions between
countries should aim at stabilizing GHG emissions to the 1990 levels. This would be achieved througharrangements that would allow industrialized countries with high project costs (which have been responsible
for historical and current emissions) to finance low cost projects in developing countries. By doing so, thedeveloped countries would claim credit for reduction and sequestration of carbon emissions.
The transfer of finance and technology to achieve the abatement of GHG emissions in developing countries
entails the evolution of national capacities in legal, administrative, financial, and technical arrangements
all of which are few and far between. But these are not the only problems. One view is that joint implementation
programmes are just another ploy to justify continuation of pollution by industries in developed countries.

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The buck to stabilize GHG concentrations is simply passed to the developing countries. Some developing
countries have already expressed their disappointment over the view that joint implementation is justanother device urging the DCs to plant more trees, restrict the consumption of fuel-wood, and prevent
logging. Another vital factor is the application of the cost-effectiveness principle. If countries inclined tocooperate in this scheme will reflect marked differences in production costs, a large number of countries
falling in the intermediate range will not participate in carbon reduction and sequestration. Moreover, manyof the joint implementation projects to be addressed between countries may not reflect national priorities
for sustainable development. And there is the further prospect of costs changing over time in ways not
anticipated even by the worst-case scenario. If this happens, the restructuring process may be too expensive.
Abandoning the project may therefore turn out to be a very real possibility.
Clearly, the effectiveness of implementing joint implementation projects will depend on the ability ofdeveloping countries to generate national inventories of anthropogenic emissions, the extent to whichtargets and quotas can be assigned, and the degree of competence in developing guidelines for joint
implementation targets. Also needed are capacities to determine safe carbon levels and a time-plan for
carbon reduction and sequestration. And yet, without training, technology, and additional resources, many
developing countries will not be in a position to generate national programmes to mitigate climate change.
Despite the huge challenges posed by the ecodiplomatic device, it is still possible to see advantages in the
joint implementation mechanism. One of the greatest worries about the joint implementation is that manyindustrialized countries may not be so willing to transfer financial and technological resources that matchthe needs for effective mitigation of GHG emissions in developing countries.
The global imperative to reduce, through international cooperation, the concentration of greenhousegases (GHGs) in the earth’s atmosphere has stemmed from the grave concern that their continued
anthropogenic build-up under the prevailing business-as-usual scenario would trigger and intensify
catastrophic consequences on the planet. In view of the anticipated adverse prospects, most world
leaders recognized the need to act in concert in a bid to drastically reduce GHG emissions to the1990 levels. The scheme designed in 1992 to pursue this goal came to be known as the Framework
Convention for Climate Change. Just as was the case with CBD, the imperatives of finance andtechnology were critical underpinnings for this arrangement. The commitments on these dimensions
appear under Article 4 of the Convention. They state that “… All parties, taking into account theircommon but differentiated responsibilities and their specific national and regional development
priorities, objectives and circumstances, shall:••

Promote and cooperate in the development, application and diffusion, including transfer, oftechnologies, practices and processes that control, reduce or prevent anthropogenic
emissions of greenhouse gases not controlled by the Montreal Protocol in all relevant
sectors, including the energy, transport, industry, agriculture, forestry and waste management
sectors.
The developed country Parties and other developed Parties included in Annex II shall takeall practicable steps to promote, facilitate and finance, as appropriate, the transfer of, orT ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

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•

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access to, environmentally sound technologies and know-how to other Parties, particularly
developing country Parties, to enable them to implement the provisions of the Convention. In
this process, the developed country Parties shall support the development and enhancementof endogenous capacities and technologies of developing country Parties. Other Parties
and organizations in a position to do so may also assist in facilitating the transfer of suchtechnologies.
The extent to which developing country Parties will effectively implement their commitments
under the Convention will depend on the effective implementation by developed country
Parties of their commitments under the Convention related to financial resources and transfer
of technology and will take fully into account that economic and social development andpoverty eradication are the first and overriding priorities of the developing country Parties.
In the implementation of the commitments in this Article, the Parties shall give fullconsideration to what actions are necessary under the Convention, including actions related
to funding, insurance and the transfer of technology, to meet the specific needs and concernsof developing country Parties arising from the adverse effects of climate change and/or the
impact of the implementation of response measures…

The above provisions leave no doubt that the developed economies are under binding obligations topromote technological change in developing countries. The question that arises, however, is whether
the North has really made good its commitment to promote technology transfer and facilitate theevolution of domestic technological capacities in Africa. To establish the truth or falsity of thisobservation, it would be necessary to examine in detail what projects have taken off under the Clean
Development Mechanism (CDM), within bilateral, multilateral, or other cooperative frameworks.
Preliminary evidence suggests that in-depth technology policy studies of the type suggested have yet
to be carried out in Africa.
The Clean Development Mechanism was established by Article 12 of the Kyoto Protocol that parties
signed in 1997. The objective of this arrangement has been to assist developing country parties
achieve sustainable development while enabling the developed country parties to realize compliancewith GHG reduction commitments.
According to the Protocol, CDM projects were anticipated to begin in the year 2000. But Africa haslacked the human and institutional capacity to identify prototypes as well as design, market andimplement projects. The sectors that are amenable to a CDM analytical framework include energy,transport, forest and agriculture.
5.2.4

Systemic contradictions in the regime of global conventions and agreements: theWTO as the sword of Damocles

While the global conventions discussed above have articulated specific commitments, especiallythose relating to finance and technology to be implemented by the industrialized countries, otherinternational agreements such as the WTO seem to undermine the hopes and prospects raised by

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them. This trade body poses dangers to Africa’s desire to obtain technologies from the richindustrialized countries.
WTO has concerned itself with accelerating the pace of globalization in an environment where thetransnational companies have invariably taken the lead. In substance, the interests of international
capital tend to supercede the development goals of governments. The WTO assumes that thedevelopment goals of governments and transnational corporations are coincidental.
WTO provisions have both temporal and spatial dimensions. The temporal aspect implies thatsignatories would be expected to comply with provisions now as well as in the future. Future generations
and governments would not be able to withdraw unilaterally even if they wished to do so. On thespatial dimension, the WTO framework gives transnational corporations the freedom to go wherever
they want (geographical license) and to invest in any sector (sectoral license). The implications ontechnological change are considerable.
Governments will not be allowed to strategically employ the instrument of public procurement topromote specific industries and generate domestic technological capabilities. WTO contends thatgovernments seeking supplies shall not restrict their sourcing to favoured domestic firms. It invokes
the national treatment provision which states that governments should treat TNCs no less favorably
than local companies. The TNCs have pushed hard for this clause because they realize that the
public procurement market is sizeable and is characterized by massive profit opportunities. Theycite deficiencies in government procurement practices such as lack of openness and transparency
in public purchases. But all this rationalization is prompted by their desire to capture this large
market in developing countries.
The other area likely to affect Africa’s prospects to build domestic technological capabilities is tradeand investment. The WTO not only gives TNCs the right of entry into any African economy but also
grants them the liberty to invest in any sector of their choice. For instance, TNCs can secure 100%
equity in take-over bids involving local companies. They can also proceed with such investments
without government approval. Other rights under WTO include:•••

the right to purchase controlling interest of local firms without government approval
the right to repatriate resources, unrestricted
the right to put in place foreign management boards

In addition, WTO forbids signatories from imposing, enforcing, and maintaining performancerequirements and conditions on foreign trade and foreign-owned affiliates. This will impact directlyon questions of enhancing domestic content and institutionalizing domestic subcontracting provisions
for all foreign investments. African governments will have no authority to regulate the operations of
TNCs that require them to transfer environmentally-sound technologies as well as assist national
economies build domestic technological capabilities.

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WTO provisions prohibit governments from exerting conditionalities on TNCs such as requiringthem to foster forward and backward linkages with the host economy, or from making employment
specifications that favour recruitment of local people in managerial and key administrative anddecision-making positions. It also absolves foreign investors from domestic environmental
regulations. TNCs have the power to sue host governments for contravening WTO regulations. To
illustrate, Ethyl Corporation in the US filed a suit against the Canadian government for prohibiting theimports of the company’s toxic gasoline additive. The US investor crafted a compensation scheme
accusing Canada of hurting its sales and damaging its reputation.
This means that the invocation of the WTO provisions would effectively and comprehensively
marginalize African governments from proactively managing the technological affairs of their states.
But the adverse power of WTO has been extended to enlist the cooperation of very powerful multilateral
institutions such as the IMF and the World Bank.

(Footnotes)
If DCs fail to obtain environmentally-friendly technologies, they would still wish to industrialize and modernize. This ambition stems fromthe observation that such societies enjoy high standards of living, economic prosperity, and material well-being. Developing countries bent
on achieving equivalent levels of material affluence will be forced to replicate such economic structures in their own countries at any cost’,even if this means using ecologically-disruptive conventional technologies.
1

See Kasman, M.S. (1992) “Economic and Legal Barriers to the Transfer of Environmentally-sound Technologies to Developing
Countries” in
ATAS Bulletin, Issue No. 7, p.166.
3
See UNEP (1996)
Climate Change 1995
, IPCC, Cambridge University Press, New York, U.S.
2

4

For a lucid discussion of eutrophication and attendant problems, see UNEP (1992) (underline Chemical Pollution: A Global Overview,)
EarthWatch, The United Nations Environment Programme, Nairobi, Kenya, pp.63-75.
5op.cit. Wilkinson, p.93.
6Ibid, Wilkinson, p.95.
7

Chittick, D.R. (1992) “ The transfer of non-chlorofluorocarbons technologies: a case-study in industry cooperation” in ATAS No. 7, p.196.
8

For an elaborate discussion of the public domain technology, see Ecotec Resource b.v. (1993)
New Green Fridges- A Breakthrough for the Environment, ER Ecotec Resource b.v., Development Consultants, The Netherlands.
9

See UNEP (1993)
Ozone Action, UNEP IE/PAC Quarterly Publication, pp.1, 5.

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10

op. cit. Wilkinson (1990), p.88.
11S
ee Maltezou, S.P. (1992) “Constraints to clear technology transfer to developing countries “, inATAS Bulletin, No. 7, United Nations, p. 170.
12
See Vogelsberg, F.A. (1992) “Technology Transfer and Assistance to Developing Countries for Phasing Out Chlorofluorocarbons” in
ATAS Bulletin, Issue No.7, Spring 1992, p.199.
13
See Chittick, D.R. (1992) “The Transfer of Non-Chlorofluorocarbon Technologies: a Case Study in Industry Cooperation” in
ATAS Bulletin, Issue No.7, p.195.
14
For a comprehensive overview of the types of assistance needed, see Vogelsberg, op.cit.
ATAS Bulletin,
Issue No.7, pp.201-202.
See Bierbaum, R. and H. Levenson (1992) “Multiple Approaches to Limit Carbon dioxide Emissions in Less Developed Countries” in
ATAS Bulletin, Issue No.9, p.188.
16
ibid, Bierbaum and Levenson, 1992, p.189.
17
See Bierbaum and Levenson, ibid, 1992, p.189.
18
See Bierbaum and Levenson, 1992, p.190.
19
See Maltezou, S. (1992) “Constraints to Clean Technology Transfer to Developing Countries” in
ATAS Bulletin, Issue No.7, pp.170-171.
20
ibid, Maltezou, 1992, pp.172-173.
15

6.

Charting out New Technological Horizons:
Africa’s Strategic Challenges

In view of the forces that have affected and continue to affect Africa’s dismal technological evolution,
what then would be the way forward?
6.1

Learning from Past Mistakes

Any meaningful, progressive step must be made in the context of learning from past mistakes. Those
who fail to learn from their mistakes are condemned to repeat them. The question that arises iswhether African leaders would treat the mistakes revealed to them after a process of critical reappraisal,
as constituting mistakes. The whole idea of trying to understand why Africa has generally performed
dismally in acquiring and building domestic technological capabilities is not an exercise to apportion
blame, but to unearth the mistakes committed, the flaws and misconceptualizations that clouded
our vision, the shortcomings that constrained our efforts, and the failures that undermined our aims.
Only by appreciating our ways would we be able to define a path of promise. Therefore, Africa’s firstcritical step is to take stock of what has happened and why. Have we, for instance, adopted soundstrategies, or have we misjudged the demands for technological change?
6.2

Leaders and Technological Change

The experiences of Japan, China, and Korea discussed earlier, demonstrate that the process ofdomestic technologization was a leaders-driven endeavour. Their governments put their money
where their respective mouths were; they matched their words with their deeds. The conscious
application of technology policy was a critical pillar of their development blueprints. For Africa tomake significant strides in the techno-industrial domain, leaders of this genre should emerge.
6.3

Finance, Control and Dependence

From the experiences discussed, the trailblazers did not embrace strategies of convenience. They
bit the bullet and made hard choices. They employed modes of technology transfer that conferredon them control over the entire gamut of the technology transformation chain. They consciously
adopted financial and investment approaches that enhanced the prospects of deepening domestic
technologization, rather than those means that could have compromised their main goal.
Africa should repudiate grant systems of finance while pursuing her technological ambitions. Suchmechanisms are merely opportunistic devices which donors use to render employment to their own

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citizens while keeping the grant-funded firms in their home countries in production. Often, grant
funded investments in Africa have been bereft of meaningful technological content.
African leaders should realize that overseas technology suppliers never build domestic technologicalcapabilities. Foreign companies would not voluntarily give up and let go the rewarding sources of
earnings. As such, they would devise contracts that only release the peripheral and secondary
aspects of technology to clients in the hope that they continue to reap a stream of benefits well into
the future.
It was earlier illustrated how Japan and other developed countries framed specifications thatdisqualified others, including firms in host economies from potentially winning future contracts. The
moral of this analysis is that African countries should not be party to contractual schemes that arecompromising. They should always leave open the possibility of exploring alternative sources for
procuring technologies.
6.4

Legislation, Local Sub-Contracting and Domestic Content

African governments should make it mandatory for all domestic investments involving foreigntechnology suppliers to first exhaust the use of local technological capacities. Moreover, foreign
firms should be made to comply with national legislation that awards subcontracting work to local
firms before any overseas parties are considered.
6.5

Counterpart Staffing Model and Crucial Capacities

African policymakers should institutionalize the counterpart-staffing model to enable local manpower
resources understudy the foreign technology suppliers, in particular, in areas of generic influence.
Cross-cutting skills should be tapped so that a domestic economy would not be repeatedly obliged
to procure the same technological services from abroad.
6.6

Exemption and Emergency Clauses

African governments should always seek to protect their domestic technological capacities wheneverpossible using the exemption and emergency clauses embodied in international trade and relatedagreements. In the recent past, African leaders have recklessly liberalized their economies following
coercive pressure from industrialized countries. In Kenya, the rice and sugar sectors, including
many subsectors in the manufacturing sphere, have had their domestic technological capacities
damaged by brazen acts of doctrinaire policy implementation. Yet, exemption and emergency clauses
could legitimately have been invoked to safeguard valuable local capabilities.
6.7

Embassies and Technological Search

Japan, Korea, Singapore, and Taiwan used their embassies abroad to maximize the flow oftechnologies to their economies. Specific sections were established, and continue to operate, inT ECHNOLOGY T RANSFER IN A GLOBALIZING W ORLD

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overseas diplomatic stations to facilitate technological flows. No such tradition exists in African
embassies overseas. The idea of sending retired army officers to man diplomatic units abroad, as is
the habit of ruling dictators in Africa, is reflective of the technology-bereft mindset dominating thehighest echelons of power. African embassies have military attaches as substantive positions in the
diplomatic hierarchy rather than technology attaches. Not surprisingly, the job descriptions ofcommercial attaches totally lack technological content. Yet, Africa could shift away from this diplomaticstate of technological sterility to one of technocentric proactiveness.
6.8

Holding the West Accountable

African countries have not yet developed robust mechanisms to systematically hold industrializedcountries accountable to the commitments of global conventions which they ratified. As examined
earlier, the mandatory global agreements contain unambiguous provisions that oblige industrializedcountries to transfer technologies and finance requisite initiatives in Africa and elsewhere in thedeveloping world. Africa should exploit this opportunity to facilitate technologically-robust sustainable
development.
6.9

Industrial Planning and Technological Capability Indicators

The development of the manufacturing sector in Africa has been characterized by very little
techno-industrial planning. A fundamental ingredient of national planning systems andprogrammes involves the gathering of comprehensive information about the vast array ofprimary, secondary and tertiary problems which the nation, region or community faces. The
gathering of this information is a dynamic process and should involve consultation withstakeholders. The planning authorities concretize a range of these problems.
In general terms, techno-industrial planning would comprise conscious and deliberate efforts bypolicymakers to target and promote the establishment of an integrated set of priority industries byfocusing on a wide set of technological targets. The process defines clearly the respective rolesof public and private sectors. Indeed, the government is expected to play a facilitating role throughthe creation of an enabling environment for private sector initiatives to flourish. The rationale forplanning is to guide the industrial economy along a course that would stimulate multiple interlinkages between and across industries.
The plans are formulated with specific time frames in mind, usually 10-20 or 15-30 years, during
which realistic projections of goods and services are made. Production targets are differentiatedaccording to export or domestic market requirements, including a clear statement of therelationship with local inputs and institutional human informational and technical capacities.
Planning the evolution and growth of the manufacturing sector should be guided by an explicit
industrial vision and supported by a policy framework capable of generating the mix of goods andservices within that vision and the country’s national objectives. Undoubtedly, industrial planning

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is anticipatory in that, by providing scenarios and prioritizing goals, it steers the manufacturingsector along directions which hasten the realization of defined expectations and investments.
If industrial planning is defined as a conscious exercise to guide, promote and regulate
manufacturing investments within a market framework and in ways that maximize the use ofdomestic human, informational, institutional and technical capacities, then it can be argued that
Africa has not undertaken this activity in its development aspirations. And even if policymakers
insist that some industrial planning has been taking place, they would easily acknowledge thattechnology plans have neither been prepared nor incorporated in the exercise. By failing tointegrate technological considerations in the industrial planning process, the policymakers are
ignoring a strategic variable in the development process. Reasons for this marginalization or
ignorance are hard to find. First, many planners are not familiar with how the technologicalvariable can be incorporated into an industrial plan. This is particularly true if the planners are
neo-classical economists who regard technology as just a mere input captured by isoquants in a
two - dimensional graph. This conceptualization of technology and the view expressed byneoclassical practitioners is a monumentally naive one. Second, national development planning
has included industrial but not technological goals other than mere references and general
remarks about technological imperatives. Though planners have from time to time expressedcommitment to technological variables, their words have not matched their deeds. Third, planners
do not know how to prepare a technology plan, and how it can be integrated in sectoral, industrial
and national plans.
Because the technological factor is poorly understood by national development and industrial
planners, technology-based planning is non-existent in much of Africa. The creating of Research,
Science and Technology ministries does not imply that technology-based planning is taking
place or even influencing sectoral, industrial and national plans. The creation of these ministries
may have been prompted by a particular international trend that was in fashion some years ago.
What’s more, even though policymakers would accept the strategic importance of technology as
an article of faith, its conception in the totality of the development process is poorly defined. The
creation of separate ministries or departments to address science and technology matters tends
to relegate the technology variable to being just another element in the development process.
Such a unit should be located in the office of the President to oversee the overall development
function.
If technology-based planning is to realize phenomenal gains, it would be essential to re-organize
the decision-making machinery by relying on views expressed by members of a multi-disciplinary
team rather than leave technology matters to bureaucrats and neoclassional technocrats only. As
Sub-Saharan Africa aspires to become an industrialized region early in the new millennium, it
should train many citizens in technology studies, among other fields. Meanwhile, it should begin
to build a strong and comprehensive technology database for assessing national technologicalcapabilities, gaps, and needs, and be able to improve and upgrade the information on a continuous
basis.

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Africa has given itself an incredible 15-30 years to excel as a newly industrializing region. Chinabegan the process of industrialization more earnestly only since 1978, and in 15 years, hasmesmerized the whole world with its economic performance.1 Yet, some would argue that a
preliminary industrial base had been in existence for several decades. Thailand’s extraordinary
economic growth began more purposefully in the mid-1970s. Singapore, Malaysia, Hongkong,Taiwan and Korea knitted deliberate strategies in the late sixties to achieve industrialization.
Governments of the Dynamic Asian Economies (DAEs) promoted universal education, employedfiscal and monetary policies, and developed sound relations between unions and management. 2
The rational for acquiring environmentally-sound technologies for the industrialization process
stems from two fundamental considerations, namely, the need to improve and protect the qualityof human life and habitats, and secondly, the realization that trade issues are increasingly being
permeated by environmental standards and related matters. Except for very general cases, it may
be difficult for Africa to obtain environmentally-friendly technologies from the proprietors if they
promise to pose competition in some of the dominant markets they could seize. And sinceenvironmentally-sound technologies have only recently started appearing in the markets, patentees
are likely to extract extremely high rents for their innovations. However, if the innovators are unwillingto transfer their cleaner production technologies to the south to assist developing countries
pursue sustainable industrialization, these economies will either have to develop their own
environmentally-sound technologies or remain stuck with ecologically-disruptive ones. The former
will mean that many developing countries will only be importers of cleaner industrial products andnot exporters since they will have very little to offer in the short term in a trade environment
increasingly being driven by stiff environmental standards. The assumption here is that thedevelopment of cleaner innovations has long gestation periods. If so, African countries would not
be expected to participate equitably in an environmentally-sensitive trade environment.
Equally, developing countries are stuck with the present crop of ecologically-damaging industrial
technologies. Their involvement in international trade will begin to experience a sharp decline once thegrace period is over. In a few years, as the export markets start tightening their environmental
regulations, and as industrial producers in African countries fail to develop or procure cleaner
innovations, their trading potential will slide even further in world commerce. At the same time, theirindustrial structures would continue to wreak havoc not only on the quality of human life, but also on theenvironment in general.
Therefore, depending on whether developing countries succeed in generating cleaner innovations ortriumph in acquiring such technologies from the pioneers, the most likely outcome for them in the newinternational environmental order is de-industrialization. If this fails to occur, then one can only assume
that industrial production is continuing at the risk of environmental unsustainability. Moreover, thisindustrial continuity will tend to suggest that only domestic consumers are involved in the purchases ofenvironmentally - damaging goods. Under these conditions of external environmental regulation, only
the local market will serve as the logical outlet for such products.

(Footnotes)
See Fukasaku, K. (1994) “China’s Growing Presence”, in
The OECD Observer
1

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No. 189, August/September.
Consult Richards, A. (1993) “Korea, Taiwan and Thailand: Trade Liberalization and Economic Growth” in
The OECD Observer, No. 185, December 1993/January 1994.
2

7.

Technology Needs Assessment for Sustainable
Industrialization

For countries seeking to industrialize sustainably, a major component of environmental technology
policy should include the development of local capacity to assess a wide spectrum of humanneeds and the technologies that go with the fulfillment of those needs. This is what we refer to asneeds assessment and technology needs assessment respectively. But the third leg in this tripodof interacting segments is the capacity of an economy to assess the technologies themselves,and in our case, be able to distinguish those that are environmentally-sound from those that arenot. This is the phenomenon of eco-technology assessment. A meaningful classification of thesetechnologies, in a kind of pecking order, will depend on their scores on a scale of environmental
indicators, developed by technology planners and experts.
From a cursory analysis of societal development, the question of human needs arises in thecontest of existing or emerging problems identified by individuals and/or their representative
agencies through a consultative process or other means. Some of the problems a community
could be facing may be associated with a particular technology precipitating adverse environmental
consequences. On the other hand, a problem emerges not because of the presence of atechnology or activity, but because of their absence. Problems are formulated and needs crystallized
because certain technologies or activities are conspicuous by their absence.
On technology assessment itself, it is important to bear in mind that the criteria used to makechoices (by adopting a scale of environmental indicators) have to be underpinned by a preventive
approach rather than a curative course. The preventive approach refers to building knowledge
capabilities in those institutions and people that place a special premium on waste minimization
during the processing of inputs, use of inputs during the production stage, and in the disposal ofwastes. In a sense, the human and institutional capacities (humanware and orgaware) should
acquire skills and knowledge (infoware) that focus on equipment, products and processes(technoware) with the greatest potential to reduce wastes in the various stages of the life-chain
rather than on end-of-pipe systems. Hitherto, environmental performance of technologies was
judged on the basis of waste treatment after the effluent or other pollutants were produced. This
curative approach —— equivalent to locking the stable after the horse has bolted — has beeninefficient and risky both financially and ecologically.
Cleaner technologies have been defined as production techniques which include:

79

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ATPS SPECIAL PAPER SERIES N O. 21“... the efficient use of raw materials, water and energy, the eliminationof toxic or dangerous materials and the reduction of emissions andwastes at the source. For products, the strategy focuses on reducing
impacts along the entire life cycle of the products and services, fromdesign and use to the ultimate disposal.”1
In the context of this paper, technology assessment refers to a comprehensive evaluation of various
techniques and institutional, human and informational capacities in order to determine, on the basis of LC
criteria, their appropriateness for utilization, acquisition, and adaptation. The process involves an
examination of production and processing methods in their entirety and diversity. The specific needs areclassified and prioritised by rank. Within certain budgetary constraints, the needs are translated into objectives
to be achieved within a specific time period. This definition of problems, their translation into needs andobjectives, and their prioritisation and classification into primary, secondary, and tertiary scale is referred toas needs assessment. The information generated in this regard assists policymakers or other users to
select environmentally-friendly technologies.
The success or failure of the technology assessment process depends on the availability or otherwise of
requisite institutional and human capacities. Relevant organizational structures need to be in place toidentify, appraise and select the appropriate technologies. The institutions need to be manned by people
with skills and knowledge governing the requirements of the process, and their competence and activities
will be enhanced by relevant documentation, procedures as well as equipment. TA is an extremely crucialcomponent of technology planning and development.
Once a profile of needs is constructed and the priorities established, the next step in the planning process
is to carry out a survey of all possible technological options and to classify and prioritize the technologicalareas of relevance associated with each need. The identification process involves an assessment ofspecific, generic and cluster of technology, both nationally and internationally. Specific technologies referto a range of techniques that address particular needs. However, a specific need may be satisfied by atechnique that has a more general application across many areas. These are referred to as generictechnologies. It is also possible that a given need could be solved more efficiently by clusters of technology,
i.e. by a group of technologies that operate effectively only when adopted together or used in concert.
The technological capacities that need to be identified across the spectrum of needs will include skills forinvestment analysis, for searching, for testing and maintaining equipment, for assimilation and upgrading,and for unpackaging design and production engineering if the technologies are to be imported. For
imports or those locally available, the development of technology databases for specific areas will be an
important part of the whole programme. In a sense, the national planning framework as an institutional
mechanism for assessment and analysis must include an investment programme on facilities for storage,
retrieval, analysis and upgrading of information.
A dynamic institutional mechanism for assessment and analysis should build profiles on national economic
activities; demographic and health statistics; education and mass communication; science and technology

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personnel, their distribution and classification; expenditures on R & D activities, both current and capital,and on the basis of fields of specialization; sources of funding and indicators of R & D efforts; import andexport profiles; and natural and human resources. And based on the assessment of society’s needs andthe requisite technological needs, the capacities in the national planning institutions will be able to determine
technological gaps and levels.
To conclude, the process of national needs assessment, technology needs assessment and technology
assessment is not just an exercise of inventory. It also entails efforts to analyse and evaluate a vast array ofparameters and variables. In the case of technology needs assessment for sustainability, it entails carryingout a broad review, analysis and evaluation of technological options vis-a-vis their capacity to solve
environmental problems. It is suggested that the LC criteria would be the most appropriate method to
identify the most promising technological solutions that should be selected on the basis of their problemsolving potential and specific/general environmental merit. Clearly, a priority register of various technologicaloptions will emerge from a ranking list constructed on the basis of how effectively they solve environmental
and human problems.
For the three types of assessments, it is essential to point out that they would require requisite institutionaland human capacities supported by the relevant documentation and equipment. These capabilities
constitute the spectrum of technological capacities associated with the various types of assessment. But
for these assessments to make sense, they need to be placed in the context of a crucial complementary
capacity, namely the availability of institutional (orgaware), human (humanware), information (infoware),and facilities (technoware) for resource assessment and construction of resource profiles.
As stated earlier, exclusive reliance of market forces would lead to the underdevelopment of technologicalcapacity. To escape this problem, technology-based planning is vital. But the preparation of these plans
would be meaningless unless they are integrated into industrial and national development planning.
A cursory glance of many national plans reveals that numerous statements mention the need fortechnological development. Unfortunately, while the statements create an impression that technology isrecognized as vital for economic change, in reality there is no concrete evidence of this in the projects andprogrammess developed. Technological development is deemed to occur once industrial investments
are made. This is what the author refers to as techno-industrial fallacy. To most neoclassical economists,
technological development is seen either in terms of industrial investment or investment in R&D.
Without doubt the decision-making machinery will be vastly improved if the planning institutions involve
people with knowledge and information on technological matters.
7.1

Technology Policy Lessons for Africa

But how can Africa improve its weak capacity to acquire technologies? What should it do to systematize
this process? At the very outset, what issues should it engage withupfront to enhance its prospects for
institutionalizing the process of evolving and strengthening domestic technological capabilities where

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necessary? What would be the necessary conditions, as fundamental basic ingredients, that Africancountries should have in place to catalyze domestic technological change?
As a starting point, it would be vital to drive home to policymakers the potentiality, if not the decisive
centrality, of technology in dramatically improving a society’s welfare. Of course, this perspective hasfeatured very prominently in official speeches and policy documents of most African states, but it isobvious that this perspective is appreciated more for its rhetorical value than its profound concreteness.
African policymakers have hardly matched their words with deeds on this score. Often, one feels thatleaders do not embrace this view with conviction and that, African policymakers have not demonstrated
a “gut reaction” to this “belief”.
Because statements extolling the virtues and significance of technology have yet to carve out a nichein the deep recesses of our conscience, it is not difficult to see why our leaders have exhibited suchlackadaisical nonchalance towards it. Clearly, a perspective not rooted in moral conscience is not
likely to be expressed in practice let alone be held with passionate religiosity.
Consider, for example, the hypothetical ratings or scores people generally attach to ministries ofscience and technology. When an African minister is moved from the Ministry of Finance to the
Ministry of Science and Technology in a cabinet reshuffle, the perception is that the legislator has
been demoted. In the public’s scale of importance, science and technology (S&T) ministries scorevery low grades. Policymakers tend to share the same view. This appears to be the case even though
official documents and speeches apotheosize technology in unrestrained terms. The author dubs
this contradiction as the paradox of technological valuation. He narrates the following anecdote:

In May, 1993, I was waiting to see the director of the Science andTechnology Ministry in Accra, Ghana, when a journalist shot in to gather
a news story from the government official. As he waited to interview thedirector, the visibly perplexed journalist asked the secretary why the
Ministry of Science and Technology was left out of Jerry Rawling’s
inner cabinet. The secretary had no answer, and since I was to see thedirector first, I did not know what transpired between him and thejournalist. Had I not been strapped for time, I would have waited to hearfrom the journalist. The situation remains unchanged to this day. This
incident is a damning indictment of the approach some African leaderstake in addressing development matters.
From the foregoing discussion, it is apparent that Africa’s most immediate challenge to thetechnological phenomenon would involve efforts to anchor the sense of its significance in the moral
recesses of our conscience. The perspective ought to be held with conviction and, therefore, becapable of evoking a gut reaction in the policymakers.

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The next challenge from this dynamic should centre on the need to de-mystify the intimidating andawe-inspiring image posed by technology. Casting this dimension in complex and daunting terms
has only succeeded in shrouding it in thicker veils of mystery and elusiveness. Clearly, conceptionsof this kind have engendered a psychology that is not helpful; one that evokes fear and arouses
feelings of timidity on the subject of technology. These tendencies have also nurtured a mentality
driven by an inferiority psychosis, namely, that the field of technology requires extraordinary andgifted minds to comprehend and fathom the complex intricacies of the phenomenon. As such, thecuriosity and exploratory instincts of potentially inquisitive minds are blunted.
The impregnable images fostered by such baroque conceptions have the potential to erode thevalues of self-esteem and self-belief. This appears to be the case among policymakers in Africa if thetendencies to cede control to overseas consultants and technology suppliers on public investments(for example, energy projects) are anything to go by.
Against this backdrop, it follows that African countries would be instrumentally disposed if the issues
surrounding technology and technological change are made to appear practical and manageable.
Africa needs to inculcate values that promote the culture of technological self-confidence.
But how should the demystification exercise proceed? Technology policy research institutions in
Africa would need to do at least two things: to educate policymakers about the broadconceptualizationof technology (away from the narrow conventional perspective); and to enable them appreciate thereal meaning of technology in all its diversity.
Africa can learn from Asia’s and Latin America’s technological experiences to build its own capabilities.
Three specific areas need to be mentioned: the need for a new cognitive orientation; attaching
sufficient importance to techno-scientific and engineering services; and underlining the importanceof identifying technological targets.
7.1.1

The need for a new cognitive orientation

Following the economic success of industrialized countries, faith in science and technology as
instruments to lift developing countries out of their economic malaise has intensified. The correlation
between modernization and commitment to science (in terms of resources spent on scientificactivity) has been shown to be strong.2
A widespread view is that the role of science in economic change is critical, and societies thatneglect investment in science are doing so at their own peril and technological underdevelopment.3
This scientocentrism is shared by many developing countries, and is reflected in the emergenceand proliferation of scientific research institutes, in the hope that once established, science would
acquire a momentum of its own and technological development, as a logical step, would be inevitable.
Investment in research facilities was therefore synonymous with science.

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While the scientocentric phenomenon received emphasis and policy support in a number of developing
countries, about a dozen or so countries placed more faith in technology in achieving modernizationand economic change. Over the last 40 years, the Newly Industrializing Countries (NICs) procured
technology from the West and through reverse engineering and other methods, managed to build
technological capabilities in key sectors of their economies. The evolution of technologicalcapabilities from existing technologies sourced from elsewhere is an illustration of how technologicaldevelopment could be realized with limited or no investment in scientific inventiveness. This directtechnology approach to modernization, which the author calls technocentrism,4 has enabled somecountries to leap frog and achieve a status of development within a relatively shorter period of time.
The success achieved by them has forced some countries to focus more sharply on technology andtechnology institutions, and re orient their policies to cater for this new approach. 5
In some Latin American countries and in a few in South East Asia, a new wave of technologicaloptimism has been set in motion, as many more countries in the respective regions tend to be
influenced (through demonstration effects) in technology oriented development.
Except for a limited number of sectors, particularly those directly connected with agriculture (forexample, biotechnology), many developing countries will make a transition from scientocentrism totechnocentrism. Those that would have achieved a strong, competitive dynamic economy from atechnocentric orientation are likely to revert to some form of scientocentrism,6 at least sectorally. The
omniscient power of science may thus acquire a new status in countries that benefited from atechnocentric vision, but those that are just beginning to industrialize will for a while be influenced by
the omniscient power of technology.
7.1.2 Attaching sufficient importance to pre-investment capabilities
Africa should direct adequate attention to pre investment services. The strategic significance of
these services stems from the fact that they influence decision making along the chain of the
production process. They provide the strategic thrust in the process of building indigenous
capacities in subsequent activities along the line. As critical building blocks, they need to beacquired and involved in investment activities.
7.1.3 Underlining the importance of identifying technological targets
There is need to integrate technological imperatives in the process of procuring technology. Thisentails the preparation of country resource profiles, assessing available technologicalcapabilities, identifying technological needs, and identifying technological gaps. The
technologies that are to be procured should be subdivided into their elements, and counterpart
staff from the client firm should be attached to the supplying firm to obtain all the knowledge
necessary for acquisition of capabilities.

(Footnotes)
See UNIDO (1995)
Cleaner Industrial Production
Industrial Sectors and Environment Division, United Nations Industrial Development Organization, Vienna, Austria, p.20.
1.
See, for instance Frame, J.D. (1979) “National economic resources and the production of research in lesser developed countries”, in2

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Social Studies of Science, 9:233–246.
3.
On the contrary, it has been argued for instance, that the momentous changes of the Industrial Revolution had very little to do with specificimpact of scientific knowledge on the economic process, and that the men behind inventions received little formal scientific education. For
this view, see Yearly, S. (1988)
Science, Technology and Social Change, Unwin Hyman, London.
4.

Some writers have used the term technocentrism to mean excessive reliance ontechnical experts
to offer advice and suggest solutions to problems affecting society. See Pepper, D. (1984),
The Roots of Modern Environmentalism, Routledge, London, p. 59.
5.
A number of countries in South East Asia, notably Malaysia, have experienced institutional adaptation with regard to this new vision
towards technology.
6.
In recent years, Japan has increased its R&D expenditure in the field of microelectronics. It has realized that to maintain its
competitive edge in electronics, scientific commitment and R&D investments are necessary. In the past, microelectronics had exploitedtheparticlelikenature of electrons to generate innovations. Japan is now focussing attention on the
wave
like
motions of electrons to generate innovations in microelectronics. This shift to scientocentrism is sectoral and Japan aims to reap benefits
by being the first in the field.

8.

Conclusion

Africa’s record to build domestic technological capabilities has been unimpressive. Several factors,
both domestic and external, have militated against their acquisition and development. Africa hasscored some remarkable successes in a handful of areas, but these have been few and far between.
In addition, the accomplishments have, in general, come to pass not by design, but by default. On thewhole, the process of building capabilities has often lacked a coherent teleological thrust; it hasoften not been guided by a well coordinated, decidedly proactive, and holistically consistent strategic
worldview. The remarkable outcomes have largely been disparate, inchoate, ad hoc, and nonintegral in nature. They also give the appearance of having been realized incidentally rather thanhaving been sought after consciously, proactively, and premeditatedly.
The history of Africa on this score suggests that the evolution of technological capabilities in thecontinent has not been an institutionalized process. This paper has argued that, despite the uniquecontexts, contrasting cultural orientations, and different historical conditions of Asian and Latin
American countries, the models they have pursued in building technological capabilities possesscertain broad fundamentals which can be regarded as universals for African countries striving toachieve technological development.
Even if exogenous forces were overwhelming, Africa did not produce the quality of leaders with theindomitable will and patriotic spirit as those produced by Japan, Singapore, Korea, and Taiwan.
There, the leaders consciously applied technology policy because to them, applying knowledge
with a proven track record, and over time improving on it, defined success in all its diversity. It was thisleaders’-driven technological temperament, and the desire to match words with deeds, that madeall the difference.
It is true that Japan, Korea, and many other NICs pursued their techno-industrial dreams at a time
when the international development context was not particularly smothering. Yet, it must be said thatthese countries seized the opportunities that were then available. But the propitious conditions would
not have meant anything if they had not strategically prepared themselves for the task ahead.
Without doubt, the Cold War period presented many African countries with momentous opportunities
for setting in motion a process of domestic techno-economic evolution. In Asia, Taiwan capitalized
on its ideological differences with China to draw techno-industrial advantages from the US. But her
programme of industrialization and technologization was piloted by leaders who had strategies, whomatched words with deeds, and who were imbued with a dynamic technological temperament.
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What appeared to be common denominators for Japan, Korea, Singapore and Taiwan, as was thecase for many African countries, were the foreign threat and the humiliating excesses it would
unleash. Unfortunately, African leaders did not respond to the potential threat as their Asian
counterparts did. They seemed to have other ideas, tribalism and corruption in particular.
At the global level, the conditions and forces at play appear to be mathematically arrayed against
Africa’s economies in their ambition to industrialize. Yet, the dramatic changes in perspectives
occasioned by the imperative of sustainable development following heightened environmental
consciousness since the mid-1980s have created fresh opportunities for Africa. Indeed, the global
Conventions came to view the earth as a living organism where activities in one part of the globe tend
to have repercussions in another part. Therefore, the need to promote and reinforce sustainable
practices in production, consumption, and exchange among stakeholders around the world has
assumed policy significance at the level of international cooperation. Sadly, Africa has neither prepareditself sufficiently nor developed a robust technological temperament to build eco-technologicalcapabilities. This is a tragedy of colossal dimensions.
From a survey of some Asian and Latin American countries, it is evident that technological development
can be realized through a system of complementary strategies that stress technological targets intheir programmes. Technology led public procurement is one important aspect of policy that can beused to effect technological change. Absolute reliance on market led strategies marginalizes criticalresources that can pave the way for economic and technological development. To view technologicaland economic change solely from the neoclassical paradigm is to ignore essential prerequisites for
those changes to occur. The fostering of change must be deliberate, organized and planned because
market forces alone will not do the trick. In fact, the creation of technological capacity cannot be left
to the operation of market forces alone.
In this respect, procurement strategies must be seen in the context of ensuring broader national
participation and greater use of domestic capabilities. This selective approach must, of course, notbe seen in isolation. But it can provide the leading edge in the process of attempting to build and use
scientific and technological capabilities.
A significant number of domestic companies in Asia and Latin America have developed technologicalcapabilities, and are now poised to penetrate markets in the developing countries in a more significant
way. Korea, China, and India have devised procurement strategies that are aimed at increasing theirdomestic content ratios. The case of China illustrated that building technological capabilities requires
an understanding of the complex forces that shape them, and that a certain cognitive orientation wasnecessary to foster the change. At the same time, while the evolution of competences has been
approached in a manner that intensifies interaction between the technology supplier and the recipient,institutions in China have been brought to bear directly on their acquisition and development.

Appendix
Agenda 21 devotes chapter 34 exclusively to the issue of technology transfer through international
cooperation. The section “Basis for Action” reads:••

The availability of scientific and technological information and access to and transfer ofenvironmentally sound technology are essential requirements for sustainable development.
Providing adequate information on the environmental aspects of present technologies
consists of two interrelated components: upgrading information on present and state-ofthe-art technologies, including their environmental risks, and improving access toenvironmentally sound technologies.
The primary goal of improved access to technology information is to enable informed
choices, leading to access to and transfer of such technologies and the strengthening ofcountries’ own technological capabilities.
Support of and Promotion of Access to Transfer of Technology

Governments and international organizations should promote, and encourage the private sector topromote, effective modalities for the access and transfer, in particular to developing countries, ofenvironmentally sound technologies by means of activities, including the following:
•
•
•

•

Formulation of policies and programmes for the effective transfer of environmentally soundtechnologies that are publicly owned or in the public domain;
Creation of favourable conditions to encourage the private and public sectors to innovate,market and use environmentally sound technologies;
Examination by Governments and, where appropriate, by relevant organizations of existing
policies, including subsidies and tax policies, and regulations to determine whether theyencourage or impede the access to, transfer of an introduction of environmentally soundtechnologies;
Addressing, in a framework which fully integrates environment and development, barriers to
the transfer of privately owned environmentally sound technologies and adoption of
appropriate general measures to reduce such barriers while creating specific incentives,
fiscal or otherwise, for the transfer of such technologies;

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In the case of privately owned technologies, the adoption of the following measures, inparticular for developing countries:
-

-

-

-

Creation and enhancement of developed countries, as well as other countries
which might be in a position to do so, of appropriate incentives, fiscal orotherwise, to stimulate the transfer of environmentally sound technology bycompanies, in particular to developing countries, as integral to sustainable
development;
Enhancement of the access to and transfer of patent protected environmentallysound technologies, in particular to developing countries;
Purchase of patents and licences on commercial terms for their transfer todeveloping countries on non-commercial terms as part of development
cooperation for sustainable development, taking into account the need toprotect intellectual property rights;
In compliance with the under the specific circumstances recognized by therelevant international conventions adhered to by States, the undertaking of
measures to prevent the abuse of intellectual property rights, including ruleswith respect to their acquisition through compulsory licensing, with the provisionof equitable and adequate compensation.
Provision of financial resources to acquire environmentally sound technologies
in order to enable in particular developing countries to implement measures
to promote sustainable development that would entail a special or abnormal
burden to them;•

Development of mechanisms for the access to and transfer of environmentally soundtechnologies, in particular to developing countries, while taking into account developmentin the process of negotiating an international code of conduct on transfer of technology, as
decided by UNCTAD at its eighth session, held at Cartagena de Indias, Colombia, in February
1992.
Technology Assessment in support of the Management of Environmentally soundTechnology
The international community, in particular United Nations agencies, internationalorganizations, and other appropriate and private organizations should help exchange
experiences and develop capacity for technology needs assessment, in particular indeveloping countries, to enable them to make choices based on environmentally soundtechnologies. They should:• Build up technology assessment capacity for the management of environmentally soundtechnology, including environmental impact and risk assessment, with due regard to
appropriate safeguards on the transfer of technologies subject to prohibition on environmental
or health grounds;References
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Other Publications in the ATPS Special Paper SeriesSpecial Paper Series 1
Globalization and Technology: Africa’s Participation and Perspectives: Concept Paper and Research Agenda by Melvin Ayogu &Osita Ogbu (2002)
Special Paper Series 2
Globalization, Markets for Technology and the Relevance of Innovation Policies in Developing
Economies by Sunil Mani (2002)
Special Paper Series 3
Biotechnology in sub-Saharan Africa: Towards a Policy Research Agenda byJohn Mugabe (2000)
Special Paper Series 4
The Impact of Globalization in sub-Saharan Africa Countries by Mwindaace N. Siamwiza (2002)
Special Paper Series 5
A Blueprint for Developing National ICT Policy in Africa by Clement Dzidonu2002
Special Paper Series 6
Impact of Foreign Direct Investment (FDI) on Technology Transfer in Africa by Moses M. Ikiara(2002)
Special Paper Series 7
Pursuing Technology Policy Research in sub-Saharan Africa: Reflections on the Dimensions,Applications and Implications of a Methodological Framework by M.H. Khalil-Tammy (2002)
Special Paper Series 8
African Response to the Information Communication Technology Revolution by G. Olalere Ajayi(2002)
Special Paper Series 9
Information and Communication Technologies (ICTs): Poverty Alleviation and Universal AccessPolicies by Andrew Dymond & Sonja Oestmann (2002)
Special Paper Series 10
ICT Human Resource Development in Africa: Challenges, Strategies and Options by T.M. Waema(2002).
Special Paper Series 11
Applications of ICTs in Africa: Development of Knowledge Workers in Centres of Learning by John

Muraguri Waibochi (2002).
Special Paper Series 12
State of Science and Technology Capacity in sub-Saharan Africa by Khalil-Timamy (2002).
Special Paper Series 13
Strengthening National Information and Cmmunication Technology Policy in Africa: Governance,
Equity and Institutional Issues by Melvin Ayogu
Special Paper Series 14
A Science Agenda from An Afrian Perspective by Turner T. Isoun
Special Paper Series 15
International Trends in Modern Bio-technology: Entry by and Implications for African Countries byJohn Mugabe
Special Paper Series 16
Foreign Direct Investment (FDI), technology Transfer and Poverty Alleviation: Africa’s Hopes andDilemma by Moses Ikiara

M.H. Khalil Timamy is a ............................. at the University of Nairobi, Kenya.