Local scientists and engineers usually serve as consultants to foreign firms and contribute indirectly to the perpetuation of the vested interest in foreign technology and the demand for foreign products. The sense of being an identifiable and recognized actor whose views are sought and expected to influence social choices is absent. The nature and character of the country's development philosophy implicitly abets the vicious circle. Since independence, the Philippines has deliberately courted foreign investment and technology transfer. It is obvious that the direct social costs of foreign investment are, as shown in figure 15, the stimulation of demand for foreign products and the creation of local vested interests for its perpetuation.
Technology transfer is largely unregulated in terms of the actual learning process.
The fact that the country is underdeveloped is in itself a contributory factor to the vicious circle. There are two aspects to this. One is the highly distorted distribution of wealth, in which 85 per cent of the national assets are owned by 15 per cent of the population. The result is that the wealthy have a natural preference for imported goods and the poor do not have sufficient purchasing power to encourage local production. The other aspect is the timidity of the wealthy class in risking investments in technology-intensive ventures.