Methodological and Technological Issues in Technology Transfer

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5.6.1 The Value of Technology Intermediaries

The need for intermediation to overcome transaction barriers is often discussed in the context of technology development, both internationally and in purely domestic contexts. The World Resources Institute (Heaton et al., 1994) has proposed sector-specific intermediation as an important policy goal for greater international technology transfer, development and cooperation:

In intermediation, third parties create linkages, transmit knowledge, and expedite other transactions for the principals. The greater the barriers that separate parties who could create relationships of mutual benefit, the greater the need for intermediation. In technology development, the value of intermediation is well recognised. (p.20)

Evidence to-date with institutions that perform some intermediary functions shows that sector-specific intermediaries have advantages over broad, general-purpose intermediaries, because the technologies and applications involved are simply too diverse. A consequence is that intermediaries for energy efficiency and renewable energy should to some extent be specialised. In this view, many or most or the actors are already in existence and working, but communication and new, and more specific, problem-solving capacities are required.

Others have called technology intermediaries bridging institutions. Dodgson and Bessant (1996) highlight the importance of the intermediaries that operate between users and suppliers of technology and which help to create the links within networks and systems. They say that "bridging institutions...encourage interaction within the system, assisting with undertaking search, evaluation and dissemination tasks. They ensure that technological know-how is broadly dispersed within the system and can provide a compensating mechanism for weaknesses or 'holes' in the system" (p. 26). Innovation agents are another name for intermediaries(Dodgson and Bessant, 1996, p.186).

The high value of technology intermediation is illustrated by many of the case studies presented throughout this report. In the Baltic States, the Swedish government aid agency NUTEK promoted conversion of heating boilers to biomass by bringing boiler operators and manufacturers of conversion equipment together, by providing financing for the conversions, and by providing assistance to boiler operators in financial and technical analysis, competitive procurement, and contracting (see Case Study 18). In Mexico, the national electric utility played an intermediary role by marketing and selling efficient lighting through its offices, and by reducing the retail price through bulk procurement (see Section 5.2.1). In East Africa, the promotion and dissemination of improved efficiency cookstoves was facilitated by small-scale informal-sector entrepreneurs providing sales and service (see Case Study 1).

In countries with economies in transition (CEITs), technology intermediaries are important ways to overcome the lack of business, financing and marketing skills among firms whose managers never learned these skills in the centrally planned economy (because these skills were not needed). In particular, energy service companies, financial intermediaries and information centres have been playing important technology intermediation roles for climate-friendly technologies in many CEITs (discussed in more detail in the sections below). In CEITs, because of generally well developed technical skills among enterprises, intermediaries can focus on business, information, and financing services (Evans and Legro, 1997; Martinot et al., 1997; Martinot, 1998; Marousek et al., 1998).

In many rural photovoltaic programmes, a local or foreign intermediary provides critical marketing activities, education, financing or leasing mechanisms, sales and service infrastructure that helps to create a market. In the Dominican Republic, an innovative leasing programme by SOLUZ has successfully transferred PV technology. In Kenya, a network of dealers, along with education and training programmes have resulted in 80,000 solar home systems in use (see Case Study 5). In Bangladesh, the Grameen bank has successfully provided micro-credit for solar photovoltaic home systems (see Box 5.3). The World Bank and GEF have recently incorporated innovative intermediary mechanisms into solar PV home system projects in China, Indonesia, and Argentina, reflecting the World Bank's increased focus on rural energy for development (World Bank, 1997).

Technology intermediaries also can play an important role in strengthening the enabling environments for technology transfer discussed in Chapter 4. In particular, they can help to establish codes and standards locally or nationally, they can help facilitate programmes that create sustainable markets for environmentally sound technologies, and they can influence regulatory conditions and macroeconomic policies.

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