Methodological and Technological Issues in Technology Transfer

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4.2 Policy Tools for Technology Transfer

Policy tools for technology transfer can be used to overcome a variety of barriers to technology transfer. The United Nations (UNCTAD, 1990) saw the lack of indigenous technological capabilities, infrastructure and institutions as key barriers to developing countries conducting technology transfer:

[Developing countries] lack the strong knowledge base, integrated physical infrastructure and diversified economy required to weather shocks and recombine existing resources in new ways to adjust to what has become a continuous process of change. They also lack the institutional mechanisms and capabilities to perceive opportunities and constraints, and to translate these into effective policies for change. The financing and skills needed to innovate, to adapt and to diversify are also exceedingly rare in these countries. (p.3)

Many have recognised that barriers to technology transfer depend very much on the specific context in question:

The limiting factors for technological transformation are not primarily technological but are instead part of the social, economic, political, and cultural milieus in which technologies are developed, diffused, and used. Market incentives, the structure of regulations, the content and quality of research and education, and social values and preferences all determine technological trajectories. (Heaton et al., 1991, p. 21)

Governments and international agencies have a variety of policy tools for overcoming key barriers to technology transfer (see Table 4.1). Many of the barriers and tools are discussed broadly in this chapter and in Chapter 5, while barriers and policy tools more specific to individual sectors are discussed in Section II of this report. In addition, direct government financial support for technology transfer (such as grants, subsidies, loans, provision of equipment or services, and loan guarantees), as well as indirect financial support for private-sector innovation, are discussed further in Chapter 5.

Agenda 21, adopted in 1992, provided some of the earliest recommendations for public policies to promote technology transfer for environmental benefits (UN, 1993). These recommendations reflect not only the need for hardware, but also for building associated local capacities and for providing market intermediation. Strategies outlined in Agenda 21 include: (a) information networks and clearinghouses that disseminate information and provide advice and training; (b) government policies creating favourable conditions for both public-sector and private-sector transfers; (c) institutional support and training for assessing, developing, and managing new technologies; (d) collaborative networks of technology research and demonstration centres; (e) international programmes for cooperation and assistance in R&D and capacity building; (f) technology-assessment capabilities among international organisations; and (g) long-term collaborative arrangements between private businesses for foreign direct investment and joint ventures.

In view of the considerable opportunities for action, some have argued for nothing less than a technological "transformation" towards more environmentally sustainable technologies (Heaton et al., 1991). To promote such a transformation, successful technology transfer policies must make available financial resources, must reduce or eliminate barriers to technology transfer, must promote capacity building within developing countries, and must promote new forms of technology intermediation or "technology brokering." Capacity building should target technology acquisition, skills development, and local policies and institutions to support the technology transfer process. Market intermediation should include matching technologies with applications, brokering partnerships, and facilitating negotiations and financing packages.

A new role for Governments has been identified where they play an integrating role in managing knowledge on an economy-wide basis by making technology and innovation policy an integral part of overall economic policy (OECD, 1999). It should be recognised that fundamental social structures and personal values (i.e., social factors) evolve along with a society's physical infrastructure, private and public institutions, and the technologies embodied within them. New (climate friendlier) technological trajectories for an economy can provide great opportunities. Governments can support the establishment of dynamic flexible learning mechanisms within the private sector and with the rest of civil society. Private companies can create greater environmental awareness. Greater participation across society in the charting of technological trajectories, and in the use of the products of goods and services they generate go hand in hand with raising awareness through education and the media.

Table 4.1 Policy Tools for Creating an Enabling Environment for Technology Transfer
  • Build firms' capabilities for innovation
  • Develop scientific and technical educational institutions
  • Facilitate technological innovation by modifying the form or operation of technology networks, including finance, marketing, organisation, training, and relationships between customers and suppliers
  • Lack of technology development and adaptation centres
  • Lack of educational and skills development institutions
  • Lack of science, engineering and technical knowledge available to private industry
  • Lack of research and test facilities
  • Lack of information relevant for strategic planning and market development
  • Lack of forums for joint industry-government planning and collaboration

Primarily private-sector-driven pathways

Primarily buildings, energy, and industrial sectors

All stages

  • Increase the capacity of social organisations and NGOs to facilitate appropriate technology selection
  • Create new private-sector-focused social organisations and NGOs with the technical skills to support replication of technology transfers
  • Devise mechanisms and adopt processes to harness the networks, skills and knowledge of NGO movements
  • Technology selection inappropriate to development priorities
  • Historical legacy of technology transfer in development
  • Problems of scaling cultural and language gaps and fostering long-term relationships

All pathways

Particularly adaptation technologies, but applies to all sectors

Particularly assessment, evaluation and replication stages, although NGOs are more and more participating in implementation stages

  • Build capacities of firms, non-governmental organisations, regulatory agencies, financial institutions, and consumers
  • Inability to assess, select, import, develop and adapt appropriate technologies
  • Lack of information
  • Lack of management experience
  • Problems of scaling cultural and language gaps and fostering long-term relationships
  • Limited impact of technology because no long term capacity built to maintain innovation
  • Lack of joint venture capabilities for learning and integrating

All pathways

All sectors

Particularly assessment and implementation stages

  • Provide direct financial support like grants, subsidies, provision of equipment or services, loans and loan guarantees.
  • Provide indirect financial support, like investment tax credits
  • Raise energy tariffs to cover full long-run economic costs
  • Alter trade and foreign investment policies like trade agreements, tariffs, currency regulations, and joint venture regulations
  • Alter financial sector regulation (See also Chapter 5 for further discussion of policy tools for financing technology transfer)
  • Lack of access to capital· Lack of available long-term capital
  • Subsidised or average-cost (rather than marginal-cost) prices for energy
  • High import duties
  • High or uncertain inflation or interest rates
  • Uncertain stability of tax and tariff policies
  • Investment risk
  • Excessive banking regulation or inadequate banking supervision
  • Incentives for banks that are distorted against risk taking
  • Banks that are poorly capitalised
  • Risk of expropriation

Particularly private-sector-driven pathway, but relevant to all pathways

Trade and foreign investment policies particularly relevant to private-sector-driven pathways

Particularly assessment and repetition stages

All sectors; energy tariffs relevant to buildings, industry, and energy sectors

  • Conduct market transformation programmes that focus on both technology supply and demand simultaneous.
  • Develop capacity for technology adaptation by small- and medium-scale enterprises (SMEs)
  • Conduct consumer education and outreach campaigns
  • Targeted purchasing and demonstrations by public sector
  • High transaction costs
  • Inadequate strength of smaller firms
  • Uncertainty of markets for technologies prevents manufacturers from producing them
  • Lack of consumer awareness and acceptance of technologies
  • Lack of confidence in the economic, commercial, or technical viability of a technology

Private-sector-driven pathways

Buildings, industry, and energy sectors

All stages

  • Strengthen national frameworks for intellectual property protection
  • Strengthen administrative and law processes to assure transparency, participation in regulatory policy-making, and independent review
  • Strengthen legal institutions to reduce risks
  • Lack of intellectual property protection
  • Contract risk, property risk, and regulatory risk
  • Corruption

All pathways

All sectors

Particularly agreement stage

  • Develop codes and standards and the institutional framework to enforce them.
  • Develop certification procedures, and institutions, including test and measurement facilities.
  • High user discount rates do not necessarily result in most efficient technologies
  • Lack of information about technology or producer quality and characteristics
  • Lack of government agency capability to regulate or promote technologies
  • Lack of technical standards and institutions for supporting the standards

All pathways

Buildings, transport, industry, and energy sectors

Assessment stage

  • Devise analytical tools and provide training for social impact assessment.
  • Require social impact assessments before technology is selected
  • Create compensatory mechanisms for 'losers'
  • Social impacts not adequately considered
  • Some stakeholders may be made worse off by technology transfer

All pathways

All sectors

Assessment stage

  • Investigate impacts of technology on property rights, test through participatory approaches, devise compensatory mechanisms for losers.
  • Inadequately protected resource rights

All pathways

Most sectors where land use is involved

  • Develop science and educational infrastructure by building public research laboratories, providing targeted research grants, and strengthening technical education system
  • Directly invest in research and development
  • Insufficient investment in R&D
  • Inadequate science and educational infrastructure

Government-driven and community-driven pathways

Assessment and replication stages

Buildings, industry, energy, waste management and treatment sectors

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