Annex 1-2. Criteria for Effective Technology Transfer
For technology transfer to be considered effective, several pre-conditions
must first be met. The following criteria and categorisation emanate from box
2 of the IPCC Technical Paper I (IPCC, 1996), and from the preparatory process
of this special report. The sectoral chapters and the case studies have by and
large adopted these criteria as indicated in section 6.2, in their respective
analyses of the material presented. The criteria can be grouped into four categories,
namely, (1) GHG and environmentally-related; (ii) economic and socially-related;
(iii) administrative, institutional and politically-related; and (iv) process-related:
1. GHG and Other Environmental Criteria
GHG reduction potential
Tons of carbon equivalent; percent of IS92a baseline and range (IS92c-e).
Other environmental considerations
Percentage change in emissions of other gases/particulates; biodiversity, soil
conservation, watershed management, indoor air quality, etc.
2. Economic and Social Criteria
- average and marginal costs must be estimated and compared to alternative
- benefits of technology transfer must exceed its costs
From the buyer's perspective, especially for enterprises in the private sector
with incentives to maximise profits or increase shareholder value, the benefits
of a technology must exceed its acquisition costs. The perceived risk of the
technology may play an important part in the benefit-cost calculation. For example,
companies usually employ risk weighting to adjust the discount rate that they
use for calculating costs and benefits associated with specific projects.
- price and conditions must provide incentives to seller
Suppliers of technology will only be willing to sell their technology if they
perceive that the price received for it exceeds the costs of supply. For sellers
of proprietary technology, the lack of patent protection may make this condition
difficult to meet. In these situations, the suppliers of technology may believe
that there is a risk of their technology being copied without payment, resulting
in an inability of the supplier to recoup the costs incurred in research, development,
commercialisation and profit. Suppliers must perceive the conditions associated
with the terms of transfer to provide them with sufficient incentive to sell
There must be adequate financing available to ensure the transfer of technology.
The financing can be in the form of commercial bank loans, capital provided
through the equity markets, or any one of a number of new and innovative financing
schemes. In addition, financing could be provided by public sector organisations
such as countries' ODA, the GEF, or the IFC.
Once the terms of transfer have been agreed upon and financing has been identified,
the success of the transfer can be measured using a series of performance indicators.
Factors that could be evaluated include:
Capital and operating costs, opportunity costs, incremental costs must be estimated
and compared to alternative options.
GDP change, jobs created or lost, effects on inflation or interest rates, implications
for long-term development, foreign exchange and trade, other economic benefits
Differential impacts on countries, income groups or future generations.
3. Administrative, Institutional and Political Criteria
Information about technology
Buyers require accurate, balanced, and comprehensive information about the technologies
they are considering acquiring. Information costs money. The costs to generate
useful and useable information about technologies can be costly but, once developed
and in the public domain, helps to reduce the buyer's costs. While difficult
to measure its effectiveness, the wider dissemination of information about technologies
can assist in the more rapid transfer of technology. Dissemination about the
various pathways for transfer could also help reduce the costs of negotiating
terms of transfer.
Access to technology
Buyers must have access to technology. There are various impediments that sometimes
limit the buyers' access. In some instances, the obstacles may involve patent
restrictions, whereas in others it could be the high level of technical know-how
and costs that limit the diffusion of the technology. While in others market
restrictions can be important barriers.
Institutional capabilities to undertake necessary information collection, monitoring,
enforcement, permitting, etc.
Capacity to pass through political and bureaucratic processes and sustain political
support; consistency with other public policies.
Adaptability to different geographical and socio-economic-cultural settings.
4. Process-related Criteria
Rate of indigenisation; geographic extent of penetration and impacts on other
technologies and ancillary benefits
Long term institutional capacity building
- flexibility and capacity to adapt technology to changing circumstances
and to sell back to original provider with improvements
- capacity of local staff and long-term financing
- improvements in training and management practices
Monitoring and evaluation of continuous delivery of services provided by
technology and adequate financial performance
- continuous delivery of services provided by technology
- comparison of actual and intended benefits
- performance of technology
- quality of benefits
- satisfaction of beneficiaries
- distribution of benefits (equity)
- maintenance and service of equipment
- adequate financial performance
- payback period
- financial rate of return
- net present value
Leakages that reduce the impact of programme or measure