Commentary: A Short Comment on Technology Transfer

Dr. Kensei Hiwaki
Tokyo International University (January 17, 2002)

Dr. Kensei Hiwaki is one of the BWW Society's leading contributors, and the following commentary is offered in conjunction with the points raised in the Director's Statement in the January-February 2002 issue of this Journal.

It is true that technology is conceived as the engine of development in the underdeveloped world. In order to harness foreign technology and benefit from it, however, a variety of conditions may be required on the recipient side of technology transfer. Broadly speaking, two issues are of the greatest importance, viz., the effectiveness of the transfer and the efficiency of the transfer process. The effectiveness refers to the suitability of the technology with the socioeconomic options of the source country to the conditions of the recipient country. The efficiency refers to a possible degree of absorption and the feature of capacity on the receiving side.

One successful example of technology transfer is the case of Japan. When Japan decided to emulate and catch up with the West more than 130 years ago, Japan invited many scholars and specialists from Europe and the United States, in conjunction with importing modern machinery, in an attempt to acquire the know-how of modern technology as quickly as possible for the nation's modernization efforts.

Behind a rather smooth acquisition of foreign knowledge and absorption of foreign technology, Japan was blessed with some 260 years of peace during the Tokugawa Era prior to the onset of the modernization. During this long period, Japan saw a rapid development of culture original to herself and enjoyed the blossoming of scholastic developments, first on Confucianism, and the parallel development beginning in the mid-Tokugawa Era of studies on ancient Japanese thought and culture (Kokugaku) and of Dutch studies (Rangaku). These three competing lines of scholastic endeavor, no doubt, stimulated one another and greatly enriched the Japanese capacity to cope with the modernization process.

In addition, a growing percentage of the general public acquired practical reading, writing and calculating abilities along with Japanís socioeconomic development in the Tokugawa Era, thereby enabling Japan to boast the highest literacy rate in the world by the mid-19th century. More importantly, perhaps, the Tokugawa Peace produced numerous skilled workers in indigenous industries as well as a wide array of serious, flexible and ingenious craftsmen who could apply their indigenous skills to the modern industries.

Such cultural development during the Tokugawa Peace not only favored a rapid absorption of the foreign technology (which was developed in a foreign environment consisting of the unique interaction of economic, political, social, cultural and environmental realities) but also to upgrade the imported technology with a particular Japanese feature.

Japan also benefited from a certain degree of luck. The Western industrial technology was not overly complicated 130 years ago, and most devices could be generally understood with simple reasoning; making the technology of the era amenable to imitation through reverse engineering. Todayís industrial technology in the advanced nations is, however, incredibly sophisticated compared to that of the time when Japan started to emulate and catch up with the West. In other words, in today's environment, the possession of indigenous technological capacity, by itself, is not sufficient to harness and upgrade the best technology available today, to say nothing of benefiting from it.

What then, is the best option for effective technology transfer? When we contemplate an effective transfer of technology, we must first recognize that a transfer of the most effective technology may actually not be the most advanced (as in certain societies the most advanced technologies could actually be the least effective after accounting for various indigenous factors). With the goal of effectively-administered aid, we must start with a transfer of technology appropriate to a particular society, so that that society can absorb and benefit from the technology as quickly as possible; for this purpose, we must make a serious and time-consuming survey of the indigenous conditions as well as a credible evaluation of appropriate levels of technology to be transferred.

After making a well-researched decision on the indigenous conditions and the appropriate technology level with as many broad applications as possible, we must transfer an entire set of technology, viz., hardware, know-how, training of operational methods, and the actual end product for a simple and straightforward emulation.

In order to ensure that such a transfer of technology meets a reasonable criteria of effective aid, we need to support the recipientís endeavor for industrial development by patiently assisting in education and training, participating in an exchange of information and personal contact, ensuring the availability of relevant books, journals and other published information, providing experts and consultants, supporting reverse engineering efforts, and providing information on intermediate products, licensing, trade standards and patents, to mention only the major support possibilities.

Perhaps, we must keep in mind that a bilateral (nation-to-nation or government-to-government) arrangement of a technology transfer may go against an effectively administered aid, for the source nation tends to take advantage of the transfer for its own political, economic, industrial and military purposes. Nor do we recommend a transfer of technology through the advanced-nation-biased international organizations such as the World Bank and IMF.

In order for technology transfer to be a truly effective form of aid, perhaps, we must explore the possibility of a NGO consortium composed of the relevant parties from the source country, the recipient country and a third country, for delegation of important functions (surveying the indigenous conditions and appropriate level of technology, decision-making relevant to the process of technology transfer, and implementing the transfer of technology.) It may be best if the aiding government could remain as a silent partner in an effective technology transfer. Perhaps, this is the most difficult aspect of an effective aid.

For related articles, refer to: 1) Director's Statement, January 1, 2002; 2) "A Culture-Enriching Theory of Flourishing Employment"; 3) "Sustainable Development and A Culture- Integrated Theory of International Trade".

Dr. Kensei Hiwaki is Professor of Economics at Tokyo International University, and also serves as a Member of the Editorial Advisory Board of both the BWW Society and Bibliotheque: World Wide. In conjunction with his participation with the BWW Society, Professor Hiwaki is Founder and Chairman of the Committee for Cultural Enrichment and Diversity.

Professor Hiwaki has put forth academic economic theories documenting that Market Forces and Cultural Enrichment can work together, not only to their mutual benefit, but also to the lasting benefit of developed and underdeveloped nations and highly varied cultures throughout the world.

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