Transfer of Technology and knowledge sharing for developmenT Science, technology and innovation issues for developing countries - UNCTAD
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
U n i t e d n at i o n s C o n f e r e n C e o n t r a d e a n d d e v e l o p m e n t
Transfer of Technology and
Transfer of Technology and knowledge sharing for developmenT
Transfer of Technology and knowledge sharing for developmenT
knowledge sharing for developmenT
Science, technology and innovation issues
for developing countries
U N C TA D C U r r e N T S T U D i e S oN SCieNCe, TeChNology AND i N N o vAT i o N . N º 8
Photo credit: ©Fotolia: motorlka, James Thew, Adimas, Kentoh, 2jenn
Printed at United Nations, Geneva – 1423163 (E) – December 2014 – 878 – UNCTAD/DTL/STICT/2013/8
U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T
TRANSFER OF TECHNOLOGY AND
KNOWLEDGE SHARING FOR DEVELOPMENT
Science, technology and innovation issues
for developing countries
U N C TA D C U R R E N T S T U D I E S ON SCIENCE, TECHNOLOGY AND I N N O VAT I O N . N º 8
New York and Geneva, 2014
ii Transfer of technology and knowledge-sharing for development
Note
Symbols of United Nations documents are composed of capital letters with figures. Mention of such
a symbol indicates a reference to a United Nations document.
The designations employed and the presentation of the material in this publication do not imply the
expression of any opinion whatsoever on the part of the Secretariat of the United Nations
concerning the legal status of any country, territory, city or area, or of its authorities, or concerning
the delimitation of its frontiers or boundaries.
The "dollar" ($) symbol refers to United States dollars.
Material in this publication may be freely quoted or reprinted, but full acknowledgement is requested,
together with a reference to the document number. A copy of the publication containing the
quotation or reprint should be sent to the UNCTAD secretariat at: Palais des Nations, CH-1211,
Geneva 10, Switzerland.
The full text of this report is available on the Internet at www.unctad.org.
This document has not been formally edited.
UNCTAD/DTL/STICT/2013/8
United Nations Publication
Copyright © United Nations, 2014
All rights reserved
FRONT MATTER iii
P reface
In the outcome document of UNCTAD XIII, the Doha Mandate, member States noted that the
development of a strong science, technology, and innovation (STI) capacity was the key to
addressing many of the persistent and emerging trade and development challenges that developing
countries face. Decisive and actionable STI policies needed to become a central feature of national
development strategies.
Promoting and facilitating transfer of technology has long been an irreplaceable component of those
policies. In this context, this report responds to the mandate given by member States in UNCTAD’s
Programme Narrative for the Biennium 2012–2013 for the secretariat to produce “Studies on
science, technology and innovation including a comprehensive study to identify issues of developing
countries on transfer of technology and knowledge-sharing for development”. To complement its
stronger analytical orientation the present report is being published simultaneously with another one
that presents four case studies of practical experiences of transfer of technology in various
developing regions of the world.
Developing country policies on technology transfer are necessarily complex and cross linked with a
range of issues in the broader development agenda. Policy outcomes need to target increasing
access to technology, including improving the abilities of firms and other users of technology to
identify, acquire, adapt and use knowledge and technology. Underlying these outcomes are national
policies that support improving domestic absorptive capacities and stimulate local innovation as well
as international efforts to develop a supportive environment for technology transfer. However, it is
important to bear in mind that the end purpose of these policies is not to achieve successful transfer
of technology per se, but to support a process of innovation that creates value – most often
economic value, but also social value – through the successful application of technology to
productive activities or social endeavours. That is the reason why this report focuses not only on the
effectiveness of various channels of transfer of technology but also on the policies that developing
countries may implement to ensure that technology transfer contributes to more effective innovation
in their economies.
Policymakers need to recognize that there is a virtuous circle whereby successful technology
transfer and the resulting innovation leads to improved technological absorptive capacities, and
hence more effective further transfer of technology. National or regional innovation systems are an
important component in energizing this circle. Building national systems of innovation that enable
both domestic innovative capabilities and absorptive capacity to effectively acquire technology from
abroad is a long-term, complex effort that calls for policy persistence, coordination and integration. It
also requires an appropriate international trade and investment environment, financial support and
strong knowledge and technology links.
iv Transfer of technology and knowledge-sharing for development
Acknowledgements
This report was prepared by a team of the Science, Technology and Information and
Communications Technology (STICT) branch of the UNCTAD Division on Technology and Logistics
(DTL), comprising Angel González Sanz, Dimo Calovski and Carlos Razo. Chapter 7 of the report
benefited from a major input from Dominique Foray (Ecole polytechnique fédérale de Lausanne).
Overall guidance for the publication was provided by Mongi Hamdi, Head of the STICT branch and
Anne Miroux, Director of the Division on Technology and Logistics.
Feedback on earlier drafts of the report was provided by Pedro Mendi (Navarra Center for
International Development), Pedro Roffe (ICTSD), Bineswaree Bolaky (UNCTAD/ALDC), Ermias
Biadgleng (UNCTAD/DITC), Torbjörn Fredriksson (UNCTAD/DTL), Michael Lim (UNCTAD/DTL),
Jorge Niosi (University of Quebec at Montreal) and Marta Pérez Cusó (UNCTAD/DTL). Written
comments were also provided by the World Intellectual Property Organization (WIPO).
The report was typeset by Dimo Calovski. Sophie Combette designed the cover.FRONT MATTER v
Contents
Front matter ...........................................................................................................ii-vi
Note ....................................................................................................................................... ii
Preface .................................................................................................................................iii
Acknowledgements .............................................................................................................. iv
Contents ............................................................................................................................ v-vi
Abbreviations ........................................................................................................................ vi
Chapter 1. Introduction ...................................................................................... 1-4
1.1 What do we mean by transfer of technology? .................................................................1
1.2 Context of the discussion ...............................................................................................3
1.3 Outline of the report ........................................................................................................4
Chapter 2. Technology and knowledge gaps ................................................. 5-14
2.1 Development and technological convergence.................................................................5
2.2 Technology and knowledge gaps ...................................................................................5
2.3 Technology gaps and poverty .......................................................................................11
Chapter 3. Channels of technology and knowledge transfer ...................... 15-20
3.1 Trade ............................................................................................................................15
3.2 Licensing.......................................................................................................................16
3.3 Foreign direct investment ..............................................................................................16
3.4 Movement of people .....................................................................................................18
Chapter 4. Innovation systems and absorptive capacities.......................... 21-25
4.1 Innovation systems .......................................................................................................21
4.2 Absorptive capacities ....................................................................................................23
Chapter 5. Intellectual property rights and technology and ........................ 26-30
knowledge transfer
Chapter 6. Technology and knowledge transfer and ................................... 31-38
development: Challenges and opportunities
6.1 Climate change .............................................................................................................31
6.2 Technology transfer and health, medicine and pharmaceuticals ...................................33
6.3 Agriculture, technology transfer and global competitiveness.........................................34
6.4 Free and open-source software ....................................................................................35vi Transfer of technology and knowledge-sharing for development
Chapter 7. From transfer of technology to innovation: ................................ 39-50
The centrality of the discovery process and
economic knowledge
7.1 Technological knowledge and economic knowledge ....................................................39
7.2 A case study: Learning from a failure ............................................................................42
7.3 Technological and knowledge transfer as a fair process ...............................................42
7.4 Information and finance issues ......................................................................................43
7.5 Second-order discovery processes ..............................................................................44
7.6 New tools addressing information and financing problems ...........................................45
7.7 Technology platforms and optimizing discovery and transfer iterations.........................47
7.8 Innovation and technology transfer channels ................................................................48
7.9 Innovation as a technology transfer outcome ................................................................49
Chapter 8. Conclusions .................................................................................. 51-52
References ......................................................................................................... 53-60
Notes .................................................................................................................. 61-63
Abbreviations
CDN Clean Development Mechanism
FDI foreign direct investment
FOSS free and open-source software
GATT General Agreement on Tariffs and Trade
GDP gross domestic product
GPL General Public Licence
GVC global value chain
ICTSD International Centre for Trade and Sustainable Development
IPR intellectual property right
LDC least developed country
NIS national innovation system
OECD Organisation for Economic Co-operation and Development
STI science, technology and innovation
TNC transnational corporations
TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
UNESCO United Nations Educational, Scientific and Cultural Organization
UNFCCC United Nations Framework Convention on Climate Change
UNIDO United Nations Industrial Development Organization
VC venture capital
WHO World Health Organization
WIPO World Intellectual Property Organization
WTO World Trade OrganizationChapter 1. Introduction 1
Chapter 1.
Introduction
Technological learning and innovation are The term “transfer of technology” may also be
essential for economic growth and development applied to the process by which a technology
and are major determinants of long-term developed for a specific use or sector becomes
improvements in income and living standards. applicable in a different productive setting.
While in the more advanced economies Transfer of technology may refer to a process
technological progress involves the generation of that takes place within or across national
new knowledge that can be applied to boundaries, and on a commercial or non-
productive activity, for developing countries commercial (concessionary) basis. It may refer to
technological progress is strongly influenced by the physical movement of assets or to
their ability to access, adapt and diffuse immaterial elements such as know-how and
technological knowledge that has been technical information, or most often to both
generated abroad. material and immaterial elements. Transfer of
technology may be linked to the movement of
For this reason, the implications for trade and physical persons or more specifically to the
development of the technology gap between movement of a specific set of capabilities.
developed and developing countries and the
question of how to promote transfer and The Draft International Code of Conduct on the
diffusion of technology have been part of Transfer of Technology that was negotiated
international discussions for decades. under UNCTAD auspices between 1978 and
1985 defined technology as the systematic
The varied approaches to this issue that have knowledge for the application of a process that
developed over time and the rich literature that it results in the manufacture of a product or the
has generated are indicators of the complexity of delivery of a service. Technology is not a finished
the issue and of the challenges that conceiving product or service as such, although it can be
and managing the process of transfer of critical for its delivery or performance.
technology presents for both firms and Technology does include the entrepreneurial
policymakers. expertise and professional know-how to deliver
products and services (UNCTAD, 1985).
Similarly, Burgelman et al. (2008) propose that
1.1 What do we mean by transfer of
“[t]echnology refers to the theoretical and
technology? practical knowledge, skills, and artefacts that
can be used to develop products and services
The literature on transfer of technology uses a as well as their production and delivery systems.
rich variety of concepts and definitions but no Technology can be embodied in people,
clear consensus exists about the nature of this materials, cognitive and physical processes,
process. The context in which the process takes plant, equipment and tools.”
place, as well as the concept of technology itself
that is used strongly influence the definition of On the basis of the above definition of
transfer of technology. For example, in technology, the Code defined transfer of
developed countries the concept often refers to technology as “the transfer of systematic
the process whereby universities or research knowledge for the manufacture of a product, for
centres provide access to technologies created the application of a process or for the rendering
there through a variety of mechanisms for of a service and does not extend to the mere
interaction with market operators. sale or lease of goods”. From this, five2 Transfer of technology and knowledge-sharing for development
categories of transactions could represent technological knowledge among users in
transfer of technology as follows: developing countries and pay much attention to
general issues related to the development of
x The assignment, sale and licensing of all technological capabilities. Thus, for example the
forms of industrial property, except for trade Intergovernmental Panel on Climate Change
marks, service marks and trade names defines transfer of technology as “the broad set
when they are not part of technology of processes covering the exchange of
transfer transactions; knowledge, money and goods amongst different
x The provision of know-how and technical stakeholders that lead lo the spreading of
expertise in the form of feasibility studies, technology for adapting to or mitigating climate
plans, diagrams, models, instructions, change. In an attempt to use the broadest and
guides, formulae, basic or detailed most inclusive concept possible, the Report
engineering designs, specifications and uses the word ‘transfer’ to encompass both
equipment for training, services involving diffusion of technologies and cooperation across
technical advisory and managerial and within countries.” 1 From this perspective,
personnel, and personnel training; the availability in the economy of the abilities to
adapt and master foreign technology become as
x The provision of technological knowledge important, if not more, for successful transfer of
necessary for the installation, operation and technology than the formal design of the specific
functioning of plant and equipment, and transaction on which the Code focused. This
turnkey projects;
broader concept of technology transfer will be
x The provision of technological knowledge the one that underpins the analysis in this report.
necessary to acquire, install and use
machinery, equipment, intermediate goods A distinction between the notions of “transfer”
and/or raw materials which have been and “diffusion” of technology may be necessary
acquired by purchase, lease or other means; in this context. In general, the literature on
x The provision of technological contents of technology diffusion tends to apply that term to
industrial and technical cooperation the progressive adoption of a particular kind of
arrangements (UNCTAD, 1985). technology among a given population and give
to this concept a more passive connotation.
Although narrow (for example, this list does not Transfer of technology tends to refer to a more
include transactions in the context of non- proactive process in which users seek to acquire
commercial operations such as the knowledge to effectively use a technology
intergovernmental technical cooperation), this and to master its material and immaterial
definition of transfer of technology has the elements. There is an element of purposefulness
advantages of being comprehensive and precise. in transfer of technology that may not be present
However, the negotiations on the Code never in diffusion processes. Transfer of technology
came to fruition and an internationally agreed also involves the agreement of at least
definition of what constitutes transfer of two parties whereas diffusion is not a
technology does not exist. This has implications bilateral transaction.
for the interpretation of a number of international
instruments that call on developed countries In spite of all these conceptual difficulties, the
to engage in, promote or facilitate transfer understanding of technology and the relationship
of technology. between technology, innovation and
development, and policymaking, has improved
In this context, broader notions about the kind of in the past two decades (ICTSD, 2012).
activity that constitutes transfer of technology Discussions on technology transfer have
have emerged since the abandonment of the become a recurring issue in a variety of
work on the Code. These tend to take a broader international forums, such as the Earth Summit
view of transfer of technology, as a process that of 1992 in Rio de Janeiro, and in the United
includes the facilitation of the diffusion of Nations Framework Convention on ClimateChapter 1. Introduction 3
Change (UNFCCC). The deliberations at the technological capacities, infrastructure,
World Trade Organization (WTO), WIPO and the institutions and finance, prevent developing
Commission on Intellectual Property, Innovation countries from absorbing technology and
and Public Health (CIPIH) of the World Health achieving sustainable development paths
Organization (WHO) have addressed the (United Nations, 1990; UNCTAD, 2003a, 2003b,
acquisition, use and learning from technologies 2003c and 2004). Furthermore, the fundamental
that span from the public domain to the current issue of financing technology transfer has grown
scientific frontiers. more acute during the last twenty years, given
the strengthening of intellectual property rights
Following through the early 1990s, the growing regimes, the full-blown commercialization of
importance of intellectual property and efforts by research and development activities and the
developed countries to protect the strategic ever-deepening linkages between industry and
interests of their rights holders and knowledge academic institutions.
industries had made intellectual property rights
(IPRs) a key component in the General As this report will show, while the term “transfer”
Agreement on Tariffs and Trade (GATT) suggests a unique direction of movement,
negotiations and the WTO agreements. This successful technology transfer in practice is
resulted in the adoption of the Agreement on often a collaborative and complex process
Trade-related Aspects of Intellectual Property whereby knowledge and information move in
Rights (TRIPS Agreement) in 1994 and was a many directions and human capacities evolve
strong indication that IPRs were now the key and develop to ensure the completion of the
element of trade and technology relations in a transfer. Technology transfer often requires an
globalized world. Its proponents argued that the adaptation of the technology to the conditions
TRIPS Agreement would lead to increased levels and circumstance in the transfer destination to
of investment, technology transfer, and improve its effectiveness and impact potential,
innovation, globally and in developing countries commercial or otherwise. Technology transfer
as well. rarely happens without financial support. It may
take the shape of finance available to risk-takers
1.2 Context of the discussion and entrepreneurs or as incentives provided by
Governments to improve access to technology
From early days, the international discourse has in sectors such as health, education and public
failed to develop a constructive and positive infrastructure.
response addressing country-level and
development-relevant technology transfer needs. At the most basic level, technology transfer
This reality still holds true today. As a result, and occurs when there are sufficient incentives to
despite the broad international consensus on commercialize a given technology in a new
the importance of technological change for location through trading products, licensing or
development, the technological divide has been investing. However, incentives can vary widely:
widening internationally, regionally and within technology is transferred when it makes
national boundaries, with the technological commercial and financial sense or when it
marginalization of the poor. satisfies institutional interests and requirements,
including strategic national interests and social
The technology gap among developing and economic development policy, as well as
countries is increasing, with several developing regulatory and legal requirements.
countries spearheading change (UNCTAD,
2012a; Ocampo and Vos, 2009) while many Technology transfer depends on many factors
others experience technological poverty. including the geographical position of origin and
destination markets, market size and
The lack, UNCTAD has maintained, of a competitiveness, commercial prospects, the
systematic approach in fostering STI for level of development of human capacities and
development and the resulting lack of local skills, governance, and infrastructure. Several4 Transfer of technology and knowledge-sharing for development
of these factors are mandates of policymakers clear contour of the target areas for transfer of
and are elements of a national development technology policies. Chapter 3 studies the
strategy. various channels of technology and knowledge
transfer and discusses their relative
There are no sure-fire singular policy performance and the opportunities and
prescriptions that can work to ensure challenges they present for policymakers.
increasing technology transfer to developing
countries in order to fill their technology gap.
There is, however, some evidence that some Chapter 4 looks into the importance of
environments and practices are more building effective innovation systems and
conducive to technology transfer, resulting in absorptive capacities in order to enable
the creation of economic value through transfer of technology and innovation through
innovation. Identifying some of these is the the various available channels. Chapter 5
main purpose of this report. covers the issue of the relationship between
national and international property rights
1 .3 Outline of the report frameworks and the effectiveness of transfer
of technology efforts.
This report reviews some basic concepts
underlying technology and knowledge transfer Chapter 6 describes the scope of technology
theory and practice and presents some and knowledge transfer needs from the
concerns that may inform the policy choices of development perspective in a number of key
developing and developed countries in this sectors and applications of technology.
field. Chapter 7 presents a discussion of the
process of economic discovery that leads from
Chapter 2 describes the knowledge and technology transfer to innovation and how
technology gaps that exist between developed properly understanding and supporting this
and developing countries, and analyses the process is vital for positive development
dimensions that determine technological outcomes. Finally, Chapter 8 develops a
capabilities with the intention of providing a number of conclusions.Chapter 2. Technology and knowledge gaps 5
Chapter 2.
Technology and knowledge gaps
Technological progress and innovation have spending, arising from fiscal deficits and
long been recognized as fundamental drivers of conditionalities of structural adjustment
economic growth and development and have programmes (Teferra and Altbach, 2003). The
often been identified as key determinants of ensuing generalized deterioration of STI activities
international differences in per capita income have become a major constraint for growth and
(see, for example, Parente and Prescott, 1994). economic development, leading many countries
In this sense, explicit or implicit policies to to lower positions on the technology ladder and
promote technological upgrading have always towards an increasingly marginalized position in
been a major concern of economic policy. the global economy.
However, over the last few decades, accelerated
technological change combined with the For most developing countries, whose
competitive pressures of globalization have economies operate far from the technological
added to the relevance of technology and frontier, this greater focus on STI policy
innovation for competitive strategies at the level translates into a renewed interest in the question
of the firm and for development policy at the of transfer of technology. In order to develop a
level of the economy. favourable environment where incentives
encourage transactions that transfer technology,
2.1 Development and technological many developing countries have enacted
national policies and supported international and
convergence
multilateral agreements and deliberations aimed
at stimulating technology transfer. Yet
The convergence with advanced industrial
technological convergence remains elusive and
economies in terms of income per capita,
only a few developing countries have succeeded
economic diversification and human
in building strong STI capabilities. A brief
development experienced by a number of
presentation of the main dimensions of the
developing countries in South and East Asia has
technology gaps that separate developed and
been linked to their investment in human capital
developing countries can facilitate the discussion
development and technology (Nelson and Pack,
of the possible means to promote transfer
1999; Yusuf and Nabeshima, 2007; Fofack,
of technology.
2008). The narrowing technology and innovation
gap between, first, Japan, then the Republic of
Korea, and more recently China, India and 2.2 Technology and knowledge gaps
South-East Asia, and developed market
economy countries, manifests itself as a Major aspects of the technology and knowledge
reduction in the overall development divide deficits in many developing countries are easily
(Mathews and Hu, 2007; Lucas, 2007). discerned by observing such indicators as the
share of gross domestic product (GDP) devoted
Conversely, a common characteristic of least to scientific and technological research (figure 1)
developed countries (LDCs) and their economies or the low share of manufacturing and
is the weakness of their technological and technology products in exports (figure 2).
innovation capabilities. 2 Many LDCs have seen
an absolute deterioration of their scientific and However, a more comprehensive and actionable
research and development structures, often perspective can be gained by making an
directly linked to political disruptions, civil strife assessment of the development of absorptive
and the consequential weakening public capacities for technology and the functioning of6 Transfer of technology and knowledge-sharing for development
Figure 1. Expenditure on research and development as a percentage of GDP (2002, 2007 and 2009)
Source: UNESCO.
the national innovation system. For this, represents the differences in technological and
technology and knowledge stocks and flows, as innovation capabilities between developed and
well as the supporting institutional and policy developing nations. The identification and
frameworks, must be brought into the picture. measurement of the gap can be a good starting
point for informed policy action. In this regard,
Technology gaps, or distance to the frontier, can the objective of this section is not to provide
be defined as the differences in technological or country rankings, but to present an overall
knowledge advancements between firms or picture of the unevenness of the international
countries. In the context of this report, the gap distribution of technological and innovation
Figure 2. High technology exports (percentage of manufactured exports)
Source: World Bank, based on United Nations Comtrade (accessed 13 January 2013).Chapter 2. Technology and knowledge gaps 7
capabilities. This graphical depiction of the gap Innovation Capability Index (UNCTAD) uses only
will help to assess the magnitude of the 6 indicators. Second, there are differences in the
challenge ahead for LDCs in terms of choice of variables of a specific indicator. For
technological capabilities. It may also give some example, human capital is commonly assessed
pointers to the areas where action can bring through variables such as literacy rate, average
about more results in terms of enhanced transfer years of schooling and secondary school
of technology. enrolment ratio, tertiary enrolment ratio, or
percentage of research and development
M easuring technological capabilities personnel in the population. However, different
institutions will chose different variables, on their
Measuring the technological or innovative own or combined, to assess the human capital
capabilities of a country is not an easy task. The base in their country. Third, there are different
ability to innovate depends on a wide variety of aggregation methods to construct the synthetic
interrelated economic, social and institutional index. Some indices, such as the Technology
factors, and some of these factors or their Achievement Index (UNDP) or the Knowledge
interrelations may be difficult to measure (Smith, Economy Index (World Bank) use simple
2005). A variable may be a good indicator for a arithmetic averages of the normalized variables.
specific part or parts of the system, but not In contrast others, such as the Global Innovation
necessarily a reflection of its overall performance. Index (Cornell University/INSEAD/WIPO), the
Despite the potential difficulties associated with Global Summary Innovation Index (European
the measurement of innovation, important efforts Commission), the Innovation Capability Index
have been undertaken by scholars and (UNCTAD) or the Global Competitiveness Index
international organizations to identify and (World Economic Forum) use weighted averages
quantify key dimensions of processes and to construct their indices. 3
outputs in the system. Institutions such as the
European Commission, the Organization for Besides methodological issues, it is important to
Economic Cooperation and Development note that the indices also differ in terms of the
(OECD), UNCTAD, the United Nations Industrial countries and the years covered. An important
Development Organization (UNIDO), the United reason is the availability of reliable data. This
Nations Development Programme (UNDP), the factor can determine to a large extent the
World Economic Forum and the World Bank variables used, and the countries and the time
have constructed composite indicators to periods covered by the analysis. As the Global
summarize the overall technological capabilities Innovation Index also points out, a lot of
of a country, allowing also for cross-country innovation is happening at the local and regional
comparisons. level, and this is not always appropriately
measured in aggregate statistics on the country
Although the above mentioned indicators level. 4 Finally, in many developing countries
generally attempt to measure the same innovation is probably happening in the informal
phenomenon, there are differences between sector without being captured by any official
them. The differences stem mainly from the fact statistics. 5
that technological capability reflects a
heterogeneous phenomenon that is composed Despite the differences between these indicators
by several elements and which may be and the variables used to construct them, there
interpreted differently by different institutions. In are also similarities. All of them tend to measure
this context, indicators may differ in three main in different ways the same factors, for example,
ways. First, the number of variables used to human capital, infrastructure, public or private
construct an index is varies considerably. For research and development expenditure, and
instance, the Global Innovation Index (Cornell innovation outputs (patents or publications).
University/INSEAD/WIPO) uses 84 indicators,
the Summary Innovation Index (European In fact, the country rankings generated by these
Commission) includes 25 indicators, and the indicators present very high correlation8 Transfer of technology and knowledge-sharing for development
Table 1. Innovative capability and absorptive capacity: indicators, definition and variables
Indicator Definition Variables
Innovative capability
Total research and development
expenditures as a percentage of GDP
Total efforts and investments carried by each country for
Innovative input
research and development and innovative activities
Public research and development
expenditures as a percentage of GDP
It denotes the result of research and innovation activities
Number of scientific and technical journal
Scientific output carried out by the public S&T system (e.g. scientific and
articles per million people
technical publications)
Number of patents registered at the
Total output of technological and innovative activities
Technological output United States Patent and Trademark
carried out by private firms (e.g. patents, new products)
Office per million people
Absorptive capacity
This represents the openness of the national system – Openness: (export+import)/GDP
International trade the more open the system, the more capable to imitate Export of high-tech products as a
foreign advanced knowledge percentage of GDP
Tertiary education: Tertiary enrolment
This is the key absorptive capacity variable typically
Human capital ratio; Secondary education: Secondary
emphasized by technology-gap models
enrolment ratio
A greater level and quality of infrastructures (e.g. Electricity: Number of kilowatts of
network, transportation, distribution) increases the electricity consumed per hour per capita
Infrastructures
country’s capability to absorb, adopt and implement Telephony: Number of fixed and mobile
foreign advanced technologies phone subscribers per 1,000 inhabitants
A better and more efficient governance system tends to
Quality of institutions and Corruption Perception Index
increase the country’s commitment to technological
governance systems (Transparency International)
upgrading as well as its imitation capability
A national system with a greater level of social cohesion
and within-country income equality is in general
Social cohesion and Gini Index
characterized by a higher degree of trust and knowledge-
economic inequality
sharing, hence supporting the pace of diffusion and
adoption of advanced knowledge within the country
Source: UNCTAD based on Castellacci and Natera (2013).
coefficients (Archibugi et al., 2009). This points Castellacci and Natera (2013), who analyse the
out a certain convergence in terms of (i) the key technological gap and the evolution of national
measurable factors that influence technological innovation systems in terms of two main
capabilities, and (ii) the methodologies used to dimensions: innovative capabilities and
measure and aggregate those variables. absorptive capacities. These dimensions also
cover the main factors incorporated in the
Depicting the technology gap in terms of an construction of the synthetic indices mentioned
aggregate indicator that attempts to capture the above. Thus, this approach allows us to obtain a
overall technological capabilities of countries picture of the technological gap that is
could provide a convenient simplification. consistent with other measurements and at the
However, this could hide important same time keeping a systemic approach in the
developments in some of the key parts of the analysis. The following section presents the
innovation system. For this reason this chapter methodology and the graphical depiction of the
follows the approach of Castellacci (2011) and technology gap.Chapter 2. Technology and knowledge gaps 9
Table 2. Countries in the sample and economic grouping
Developed countries
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy,
Japan, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom of Great
Britain and Northern Ireland, United States of America
Developing countries
Cambodia, China, India, Indonesia, Iran (Islamic Republic of), Jordan, Malaysia, Mongolia, Pakistan, Philippines,
Asia
Singapore, Sri Lanka, Thailand, Viet Nam
Latin Argentina, Bolivia (Plurinational State of), Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala,
America Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad and Tobago, Uruguay.
Algeria, Botswana, Burkina Faso, Ethiopia, Lesotho, Madagascar, Mauritius, Morocco, Mozambique, Senegal,
Africa
South Africa, Tunisia, Uganda, Zambia
Transition economies
Armenia, Azerbaijan, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Latvia, Lithuania,
Poland, Romania, Slovakia, Slovenia, Tajikistan, Ukraine
Source: UNCTAD.
M ethodology and the graphical which complete information was available for all
description of the gap the variables mentioned. Table 2 presents the
list of countries included in the sample as well as
Technology-gap models argue that two their corresponding economic grouping.
dimensions determine the ability of a country to
catch-up: (i) absorptive capacities, that is, the Figure 3 presents the technology gap between
ability of a country to imitate foreign advanced developed and developing countries at two
technologies, and (ii) innovative capabilities, that different points in time, 1980 and 2008. The
is, the extent to which the country is able to technology gaps presented in the figure are
produce new advanced knowledge (Castellacci calculated as the differences in the average
and Natera, 2013). Each dimension is value of the variables mentioned between
composed of a set of indicators, which are also developed countries and other country
recurrent in many of the synthetic indicators groupings. In other words each bar in the figure
produced by other authors. These factors, as is computed as follows:
well as the variables that measure them, are
described in table 1. ܽܩ = ܥܸܣ െ ܥܦܸܣ
Our analysis of the gap makes use of the CANA Where, Gap i is the gap for variable i, AVC i is the
database 6 to construct a measure of the average value of variable i in developed
technology gap at two different points in time, countries, and AVDC i is the average value of
1980 and 2008. We map the gap in terms of variable i for developing countries. For the sake
two dimensions (absorptive capacities and of simplicity and graphical representation
innovative capabilities) and six indicators: variables have been normalized to a scale from 0
innovative input, scientific output, technology to 100, for each year analysed.7
output, international trade and human capital. It
is important to mention that in the analysis As observed in the figure, in terms of innovative
conducted here we do not include social capability, the gap has increased notoriously
cohesion or quality of institutions, since the during the years analysed, particularly in
policies needed to improve these factors are scientific and technological output. On the other
outside the scope of this report. The analysis hand the gap in terms of innovative input seems
considers a sample of 86 countries – those for to have partly decreased. The average difference10 Transfer of technology and knowledge-sharing for development
Figure 3. The technology gap: Developed versus developing countries (1980 and 2008)
Source: UNCTAD. * United States Patent and Trademark Office
in total research and development expenditure Whereas the gap in terms of secondary
(as a percentage of GDP) between developed enrolment has decreased, the gap related to
and developing economies has decreased as a tertiary education has increased. Although
result of two factors: an average decrease in tertiary education enrolment has augmented in
research and development expenditure in the developing countries, it has done so faster in
developed world and an average increase in developed ones, which explains the increase in
developing countries’ expenditure. the gap. In terms of international trade, which
aims to measure the degree of openness, the
In the case of public research and development gap is rather small, in comparison to other
expenditure, the gap is expressed by negative indicators.
figures. This is the consequence of a marked
feature of the innovation systems of developing This gap analysis shows that while some
countries where, in contrast to developed ones, conditions for catching up have improved,
there is little private-sector expenditure in especially in terms of absorptive capacity, the
science and technology and the public sector gap has widened in some of the indicators
supports a much larger share of these activities related to innovative capability. This picture is
(technological centres, universities and research consistent with the findings of Castellacci
and development institutes) (UNCTAD, 2010). (2011) 8 who finds that the variables associated
with human capital and infrastructure have
In terms of absorptive capacities the gap has experienced a process of convergence, while
decreased slightly in terms of infrastructure while the opposite is true for variables associated with
the results are mixed in terms of human capital. innovation capabilities.Chapter 2. Technology and knowledge gaps 11
There is another factor which has become innovation, to the achievement of development
crucial in the acquisition and diffusion of goals is indisputable. The most notable effects
knowledge and thus has important implications are related to poverty eradication through
for overall development – Internet. Its presence improving primary education, achieving gender
or absence has given rise to the so-called digital equality and the empowerment of women, and
divide. As in many technologies, the divide is not making progress on key health issues, in
only produced by the access, but by the quality particular on improving infant and maternal
of such access and by the ability of users to health. Given that many of the world’s poor live
profit from it. Given the importance of this issue in or near to vulnerable natural environments,
the digital divide is analysed in the following dealing with climate change and sustainable
section. development issues and technologies is
unavoidable. 9
Narrowing down the technology gap is a
necessary condition to accelerate convergence While the knowledge needed to address these
in terms of income and productivity levels and needs is scientific and technological, the trigger
thus foster development. This section has rests squarely in the policy domain. Technology
shown that the gap remains considerable in policies need to be in context with the actual
many key variables of the national innovation conditions of poverty and the particular social,
system; policies are needed to reduce this gap. economic and educational problems and
That is the matter of the discussion in chapter 4. constructs that it creates. Technology needs to
be seen as an enabler, rather than an applied
2.3 Technology gaps and poverty solution that is brought in when needed. This is
difficult to realize given the fact that many people
A combination of inadequate incentive structures living in poverty are often more exposed to crisis
and institutional and policy weaknesses has led situations generated by natural or man-made
to technology being inaccessible to billions of disasters. For the countries that face the most
people. The important contribution of scientific pressing poverty problems, STI challenges seem
progress, embedded in technology and to be becoming increasingly difficult. While some
Figure
Figure 5. 4. Expenditure
Expenditure on research
on research and development
and development as a(purchasing
per capita percentagepower
of GDPparity $)12 Transfer of technology and knowledge-sharing for development
Table 3. Patents and GDP: Global share by income group
Patent applications
Country High income Upper-middle income Lower-middle income Low income World
Percentage in 2001 85.8 11.7 2.3 0.1 100
Percentage in 2011 67 29.8 3.2 0 100
GDP
Country High income Upper-middle income Lower-middle income Low income World
Percentage in 2001 64.8 24.8 9.5 0.9 100
Percentage in 2011 54.6 32.2 12.1 1.2 100
Source: WIPO Statistics Database and World Bank, October 2012.
data is available describing conditions for series. The data has been obtained from the
technology transfer and absorption in poor United Nations Educational, Scientific and
countries, it is typically scarce and compiled with Cultural Organization (UNESCO) Institute of
very erratic time, while what is available Statistics Data Centre Database.
addresses STI inputs rather than results or
outcomes of public and private activities. The chosen indicators show that there has been
no distinguishable improvement in the
In order to give a modest and admittedly technology transfer or absorptive capacity of the
imperfect insight into the state of affairs, the observed countries over the last decade. More
following table and figures present data from six specifically, figure 4 shows that expenditure on
LDCs for which there was what could be research and development as a share of GDP
considered a minimum continuity in the data has either decreased or grown very little, and
Figure 5. Expenditure on research and development per capita (purchasing power parity $)Chapter 2. Technology and knowledge gaps 13
Figure 6. Innovation and GDP per capita – Global Innovation Index 2013
Source: Cornell University, INSEAD and WIPO (2013).
from a low base, indicating that STI remains an absorption and STI-led development remain
unaddressed issue both from the point of view sparse.
of public-sector decisions as well as private-
sector choice. Focusing on more concrete science and
technology outputs, it is also fair to say that the
Figure 5 illustrates that the amount of resources share of low-income countries in global
assigned to research and development have patenting is small both in absolute terms and as
remained very limited and there are no clearly compared to their share in global GDP (table
distinguishable trends, except that expenditures 3). 10 Taking a more holistic view of how to
have been at levels insufficient to generate any measure innovation, one also sees that five out
critical mass required for innovation-led of the six mentioned LDCs rank towards the
development. Absolute and relative numbers of bottom of the Global Innovation Index (figure 6).
researchers in LDCs have not seen significant
improvements during the last decade and the The message is more mixed here however.
basic human capacities needed for technology Madagascar and the Sudan underperform14 Transfer of technology and knowledge-sharing for development
relative to their GDP, while Burkina Faso and the economic marginalization of people living in
Uganda overperform relative to their GDP. In fact, poverty, the technology gap between developed
Uganda is in the “learners group” of the Index. and developing and between advanced
Zambia, in turn, barely performs above the mean. developing countries and LDCs continues to
widen. The following chapter will explore the role
The picture that emerges from the above data is of the various channels of knowledge and
that in spite of a general consensus affirming the technology transfer in this process and their
role of technology as a fundamental component potential to contribute to reversing it.
for enhancing the growth prospects overcomingChapter 3. Channels of technology and knowledge transfer 15
Chapter 3.
Channels of technology and knowledge transfer
Economic interaction between countries occurs that reducing legal, regulatory and political
through trade, financial flows, including foreign barriers to trade, and in particular for goods that
direct investment (FDI), and the movement of have a high technology component, would
workers, managers, professionals and reduce the cost of technology transfer. From this
academics. Such interaction affects the global perspective, restrictive trade practices make it
allocation of resources and serves as a conduit inherently costlier for local firms to adopt
for the transfer of technology. The role and technologies, while open trade may affect
impact of trade and FDI on technology transfer economic growth by lowering the barriers to
may not be easy to separate. Indeed, these technology adoption.
channels of technology transfer, though
independent to some degree, can be related: However, trade in itself is not a neutral conduit of
the impact of FDI on technology transfer can be technology transfer. Technological innovation
linked to trade openness and to some extent to requires upfront investment and risk-taking and
the business links created through the innovative firms do so knowingly that intellectual
movement of people. It follows that technology property regulation will assist them in
transfer is often analysed by considering trade, appropriating – at least partly – the returns on
FDI and, to a lesser extent, migration, as their innovation. 11 Such firms seek to control the
channels of access. Therefore, national and spread of their innovations in terms of rate and
international policies reflecting on trade, licensing, geographical reach. Therefore, technology
movement of people and foreign investment transfer through goods imports will, even in a
are seen as having a primary effect on completely open trade environment, risk being
technology transfer. below levels optimal for local economic
development. This opens possibilities for
active policy.
3.1 Trade
Given the obvious implications of trade for
International trade influences the global technology transfer for development, the issue
allocation of resources and shapes the was addressed in the WTO’s TRIPs Agreement.
development of national sectors and industries. From a development perspective, TRIPS article
It therefore plays an important role in 66.2 states that developed countries need to
determining global knowledge and technology help in “promoting and encouraging technology
transfers. This notion is based on two transfer to least developed country members in
assumptions. The first is that as goods are order to enable them to create a sound and
traded, the technology embodied in them is viable technological base”. The fundamental
transferred too. In particular, the import of message of WTO is that increased trade
capital goods is often associated with openness can increase growth by lowering the
development. However, a very significant part of barriers of technology transfer. Nevertheless,
the knowledge embodied in capital goods or there have been questions over the effectiveness
necessary for their productive use is tacit of article 66.2 as a number of analysis have
knowledge, which is not easily transferable, or found either that its impact has been modest or
not at all. that its reporting system is insufficient to monitor
implementation and therefore to provide
The second notion is that an important evidence-based feedback to policymakers
determinant in technology transfer is the cost of (Correa, 2007; ITCSD, 2011; Moon, 2008; WTO,
access. The case for trade liberalization argues 2010a; WTO, 2010b).16 Transfer of technology and knowledge-sharing for development
Schiff et al. (2002) find that, in the context of product or production technologies and bring it
North–South trade, openness to trade has a to market. The main concerns of the licensor will
greater impact on total factor productivity in be achieving a royalty that will be sufficient
technology-importing developing countries than incentive to take the risk of potential problems,
investment in research and development. This such as repatriating the said royalties, product
perspective assumes that the majority of leakage into unlicensed markets and reverse
technology transfers in a country actually occur engineering of proprietary technologies.
through importing capital- or technology-
intensive goods. Furthermore, trade openness In general, reliance on licensing as a mode of
needs to be matched with policies that improve technology transfer is directly related to the
a country’s capacity to identify and absorb availability of technological skills and research
technology. The human capacity to adapt and and development support for adaptation and
put to use imported technology needs to be learning (UNCTAD, 2007). This means that its
developed locally. Therefore, the policy use is linked to the overall level of technological
recommendation on the question of whether to sophistication of the economy and tends to be
import versus develop technology is not clear more prevalent in developed and some
cut: countries can more effectively use imported emerging economies. For this mode of transfer
technologies if they have local STI activities in of technology to be fully operational, countries
the private sector and academia generating the need to develop a functional innovation system
necessary human capital. and individual firms need to acquire adequate
absorptive capacities for technology.
While most economic literature argues that
countries with closed trade policies do not fully 3.3 Foreign direct investment
benefit from technology transfer by importing
technology imbedded in goods and services, Foreign direct investment can play an important
this is a moot point, as relatively few countries role in the development process of host
actually pursue non-liberal trade as a matter of economies. In addition to providing capital,
policy. However, openness to trade works the employment and, in some cases involving local
other way as well. Developing countries that partners in established international value chains,
succeed in developing an exporting sector are FDI is a vehicle of technology and knowledge
incentivized to continuously improve their transfer, including for many soft technologies,
productive and soft technologies and stimulate such as managerial skills, marketing, or
innovation to meet international standards and knowledge of standards and regulations in
remain or improve their competitiveness in export markets. However, the success of FDI in
global markets. any developing country is subject to the
receptiveness of that country, which is defined
3.2 Licensing by its economic and policy capacities and
capabilities.
Licensing represents an important mode of
international technology transfer. However, it can Typically, the technology spillovers resulting from
present serious difficulties when there are large FDI materialize through demonstration effects,
differences between the potential partners in the labour turnover and/or vertical linkages.
transaction regarding their access to information
and knowledge and, therefore, in their Demonstration effects occur when local firms
negotiating power. From the perspective of the acquire knowledge or technology from foreign
licensee, the decision to obtain a licence will firms through imitation or reverse engineering.
involve exercising a judgement on the growth Labour turnover describes technology transfer
potential and size of the market for the product, that occurs when former transnational
and the licensee’s confidence in the human corporation (TNC) employees are employed by
capital and services infrastructure that will allow local enterprises or establish their own firms,
the necessary adaptation to the licensed that is, through the physical movement ofYou can also read
