Methodological and Technological Issues in Technology Transfer

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1.3 Background The beginning of the industrial revolution is usually used as the time frame from which increases in the emissions and the accumulation in the atmosphere of greenhouse gases (GHGs) are measured. The introduction of large numbers of new technologies was the principal characteristic of the industrial revolution. It is thus not surprising that a frequently expressed view in the worldwide deliberations on global climate change has been "If the introduction of new technologies created the problem, other new technologies will help us in solving it". In most cases, the adequate technologies already exist, but not necessarily in the locations where they could best be used to mitigate increases in the emissions of GHGs or adapt to their impacts on the environment.

Sustaining development globally will require radical technological and related changes in both developed1 and developing countries. Economic development is most rapid in developing countries, but it will not be sustainable if these countries simply follow the historic polluting trends of industrialised countries. Rapid development with modern knowledge offers many opportunities to avoid bad past practices and move more rapidly towards better technologies, techniques and associated institutions. But to achieve this developing countries will require assistance with developing human capacity (knowledge, techniques and management skills), developing appropriate institutions and networks, and with acquiring and adapting specific hardware. Technology transfer must therefore operate on a broad front covering these "software" and "hardware" challenges, and ideally within a framework of helping to find new sustainable paths for economies as a whole. A key element is choice. Hence the development of societal and organisational structures that enable well-informed choices of technologies which promote climate stability, adaptation to the effects of climate change and sustainable development is essential. To a large extent, the state of the environment today is the result of the technological choices of yesterday. Similarly, the state of the environment in the 21st century will be determined largely by the technologies we choose today (Trindade, 1991).

The bulk of technology transfers occur within the countries that generate them. The transfer of technologies from the countries and companies that developed them to other countries and entities that could put them to good use in reducing GHGs has been an important theme in international deliberations leading to the UNFCCC. The Convention, signed at the United Nations Conference on Environment and Development (UNCED) in 1992, came into force in 1994, and requires (Article 4.1.c) the parties to UNFCCC, "to promote and cooperate in the development, application, diffusion, including transfer, of technologies, practices, and processes that control, reduce, or prevent anthropogenic emissions of greenhouse gases" (UN, 1992).

Article 4.5 of the UNFCCC further states:

"The developed country Parties and other developed Parties included in Annex II shall take all practical steps to promote, facilitate and finance, as appropriate, the transfer of, or 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 enhancement of endogenous capacities and technologies of developing country Parties. Other Parties and organisations in a position to do so may also assist in facilitating the transfer of such technologies".

Another important outcome of UNCED was Agenda 21 (UN, 1993), a vision for the 21st Century based on the concept of sustainable development. Chapter 34 of the Agenda, on the "Transfer of environmentally sound technology, cooperation, and capacity building" calls for access to scientific and technical information, promotion of technology transfer projects, promotion of indigenous and public domain technologies, capacity building, intellectual property rights, and long-term technological partnerships between suppliers and recipients of technology. It points out that "Technology cooperation involves joint efforts by enterprises and governments, both suppliers of technology and its recipients. Therefore, such cooperation entails an interactive process involving government, the private sector, and research and development facilities to ensure the best possible results from transfer of technology". It also recommends the utilisation of existing technological information and promoting research partnerships and assessment networks and the development of new ones.

The importance of "technology transfer" was also recognised in the Kyoto Protocol to the UNFCCC, where Article 10c asks all Parties to "Cooperate in the promotion of effective modalities for the development, application and diffusion of, and take all possible steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies, know-how, practices and processes pertinent to climate change, in particular to developing countries, including the formulation of policies and programmes for the effective transfer of environmentally sound technologies that are publicly owned or in the public domain and the creation of an enabling environment for the private sector, to promote and enhance the transfer of, and access to, environmentally sound technologies". The fourth Conference of the Parties (CoP-4) meeting in Buenos Aires, in November 1998, further discussed the development and transfer of technologies, where the SBSTA made a set of specific recommendations, with a special emphasis on capacity building and consultative processes. Decision 4/CoP4 of CoP4 included a set of questions that are to be considered in these consultative processes (see text Box 1.1). The CoP4 decision on technology transfer is fully consistent with Agenda 21 and the Kyoto protocol, and added a fresh dimension to the UBFCCC. The criteria for effective technology transfer are presented in Annex 1-2, and constitute a useful checklist for policymakers and other relevant stakeholders.

Box 1.1 Questions included in Annex to Decision 4/CP.4 of the Conference of the Parties to the UNFCCC that are to be considered in the consultative process set up by this decision.
  1. How should Parties promote the removal of barriers to technology transfer? Which barriers are a priority and what practical steps should be taken?
  2. How should Annex II Parties promote the transfer of publicly owned technologies?
  3. What additional bilateral and multilateral efforts to promote technology co-operation to facilitate technology transfer should be initiated? What should be the priority?
  4. Are existing multilateral mechanisms sufficient? Are new mechanisms needed for technology transfer? If so, what are appropriate mechanisms for the transfer of technologies among Parties in pursuance of article 4.5 of the Convention?
  5. What should be the objective of collaboration with relevant multilateral institutions to promote technology transfer and what practical steps should be taken?
  6. What additional guidance should be given to the financial mechanism?
  7. What sort of information is needed and how can this best be done?
  8. How could access to emerging technologies be facilitated?
  9. What role is the private sector playing in technology transfer? What additional role can the private sector play? What barriers prevent their greater participation?
  10. What technical advice on technology transfer is needed?
  11. What areas should be the focus of capacity building and how should it be undertaken, e.g. what kind of activities, programmes and institutional arrangements?
  12. How, to whom and in what format should developing country Parties make their requests for assistance to assess required technologies?
  13. What technical, legal and economic information is needed? What practical steps should be taken to promote and enhance access to such information by national and regional centres?
  14. What type of process is needed to develop a consensus on practical next steps to improve existing technology centres and networks in order to accelerate the diffusion of clean technologies in non-Annex I Party markets. What type of arrangement is needed to monitor progress?
  15. What measures, programmes and activities can best help to create an appropriate enabling environment for private sector investment?
  16. How should the Convention oversee the exchange of information among Parties and other interested organisations or innovative technology co-operation approaches, and the assessment and synthesis of such information?
  17. How should information be compiled and synthesised on innovative technology co-operation approaches? When should recommendations on such approaches be forwarded to the Conference of Parties?
  18. How and when should information on projects and programmes of technology co-operation which Parties believe can serve as models for improving the diffusion and implementation of clean technologies internationally under the Convention be provided to the secretariat?
  19. Can specific technology transfer goals be set?
  20. Can we develop indicators and accounting systems to track progress on technology transfer?
  21. Are particular institutional arrangements needed to monitor progress?

It is widely believed that the provision of a favourable environment must be based on equity concerns (Pachauri and Bhandari, 1994), and on participatory decision-making to improve the chances that such enabling environment will be sustainable. Others emphasise that a great deal of technology transfer will be the consequence of commercial transactions, not through aid or grants, and that the emphasis should be on developing a financial and legal framework to promote investment and trade on climate mitigation and adaptation. In specific situations, ways have to be found which establish the adequate balance between these two positions. Actually, the two different positions may not be mutually exclusive and could occur simultaneously.

Countries and organisations are affected differently by developments such as climate change. While all countries need to co-operate in addressing global climate change, their capacity to respond varies greatly. Furthermore, small developing countries and least developed countries need special attention. Industrial countries, by and large, have the knowledge and the financial resources necessary to better respond to these challenges, but most of the countries in the world are small developing countries, which have limited capacity to take initiatives and require assistance in moving towards a sustainable development path. Some organisations fear the additional costs of economic restructuring, whereas others, who are ready for it, see the challenge providing many opportunities for them (Trindade, 1994).

The idea that a country should actively seek to transfer technology to another country is a relatively new one, seen in practice only during the second half of the 20th century (Siddiqi, 1990). For most of history, countries have sought to protect knowledge of technologies, since knowledge is power -- military power as well as economic power. Most technologies are improved incrementally over time, but occasionally there are opportunities for leapfrogging, especially for developing countries. It should be noted that the incremental improvement of technologies is accompanied by a continuous process of social and organisational change. The growth of multilateral organisations, such as the United Nations system, as well as of transnational corporations, and developments in communications and in intellectual property legislation were major factors in influencing technology cooperation and change in recent history.

1.4 The Many Meanings of Technology Transfer and Innovation
Differing views of technology see it as a commodity, as knowledge, or as an socio-economic process (Rosenberg, 1982). The classical economic view of technology as a commodity holds that technology can be reproduced without cost and transmitted from one agent to another. In this view, technology transfer is as simple as making a photocopy of design documents or obtaining a working artifact. But this view of technology has been supplanted by the view of technology as knowledge (Kranzberg, 1986). This knowledge is brought about both through research and innovation (moving ideas from invention to new products, processes and services in practical use), and through a complex and often costly process involving learning from others. A useful discussion of technology in relation to climate change is provided in Rip and Kemp (1998).

Many have concluded that technology transfer is most fundamentally this complex process of learning (Levin 1993, Kranzberg 1986). "It is not unreasonable to say that a transfer is not achieved until the transferee understands and can utilise the technology" (Chen, 1996). A test of this criterion would be the ability of the transferee to choose and adapt the technology to the local socio-economic environment and raw materials, and to sell to someone else the original technology with improvements. In the absence of such capacity to choose, transfer of inadequate, unsustainable, unsafe, or "bad", but perhaps cheaper technology and equipment can take place. The transfer during the 1980s of technology for the production of inefficient refrigerators and the international trade of used cars are cases in point.

The understanding of technology transfer is not helped by the tendency of public discourse to lump "science" together with "technology". Each may benefit from the other, but do not necessarily follow one from the other. Some countries have good scientific traditions, but are relatively weak in developing new technologies. Other countries may be world leaders in technology without having many winners of Nobel Prizes. Often technology development leads to scientific advance, which in turn may lead to new technology. Furthermore, while it may be appropriate to think of science as "Public knowledge" (Ziman, 1968), modern technology is very often "Private (or proprietary) knowledge". Whereas scientific knowledge is available freely to all that are scientifically literate, proprietary knowledge is not. As a form of knowledge, technology moves from one organisation to another in a variety of ways. "The complex ways in which knowledge moves from individual to individual and organisation to organisation raises the first problem in effective technology transfer" assert Dodgson and Bessant (1996). Effectiveness criteria for technology transfer are spelled out in Annex 1-2 and summarised in Chapter 6. It may be worth repeating that technology is not simply a patent or a piece of equipment, but knowledge, processes and practices.

Also important is an understanding of the complex networks through which those involved in technology transfer can interact: "Networks are critical for market creation [because of] their contribution to learning, specifically to the generation of a broad social pool of knowledge related to the capital good in question" (Teubal et al, 1991). Archibugi and Michie (1997) also emphasise the learning process: "policy to support technology should address the diversity of learning mechanisms and the conditions which enhance the learning capabilities of firms". The understanding of technology transfer is different for different stakeholders: governments and end-users need to understand the costs and benefits of a technology; innovators need to understand how to adapt it; and firms need to understand how to market it and how it meets user needs. These differences are further elaborated in the typology of stakeholders presented in Annex 1-3.

An increasing number of people feel uncomfortable with the term "technology transfer". For some, the criticism is that there is an implicit view of technology as an object, and its transfer is a one-time transaction that maintains the dependency of the recipient (Heaton et al., 1994). They advocate a new mindset and terminology --- technology cooperation --- to replace the notion that technology can be transferred full-blown from one economic and cultural context to another. Martinot et al. (1997) also prefer the concept of technology cooperation to technology transfer. Grubler and Nakicenovic (1991) are amongst those who prefer the concept of technology diffusion to that of technology transfer. For most of the people in this group, diffusion represents a process of technological change brought about by dispersed and uncoordinated decisions over time. Still others (Robinson, 1991) see technology transfer as a two-way learning process that might more appropriately be called "Technology Communication".

While recognising these different views and meanings, the term "Technology transfer" is generally used throughout this Report, in conformity with the Title of the Report. In the Report the term "technology transfer" is defined as the broad set of processes covering the flows of knowledge, experience and equipment amongst different stakeholders such as governments, private sector entities, financial institutions, NGOs and research/educational institutions. The broad and inclusive term "transfer" encompasses diffusion of technologies and technology cooperation across and within countries. It comprises the process of learning to understand, utilise and replicate the technology, including the capacity to choose it and adapt it to local conditions.

Technology transfer is not just from the North to the South. Most of the technology transfer today at the international level actually takes place between one industrialised country and another. Increasingly, however, technology transfer is also expected to take place from the South to the North or between South and South. The Report touches on these aspects in several Chapters.

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