Session I: Technology, Trade and Growth-lessons of Experiences Session I: Technology, Trade and Growth-lessons of Experiences Issues related to technology policies Assad Omer, UNCTAD WTO Seminar on Technology, Trade and Development, 14 February 2001

Critical determinants of a countrys ability to compete successfully: abilities to create and to acquire and adapt technologies from both external and internal sources 1/The concept

The challenge: to establish and maintain effective access to this information, andto establish and maintain effective access to this information, and to devise mechanisms for diffusing it effectively within the economyto devise mechanisms for diffusing it effectively within the economy

Technology transfer process : successful learning of information by one party from another party, and effective application of that information in generating marketable products and services

Such transfers are costly and require investment by both parties in a process with uncertain outcomes

Potential opportunities: Productive activities can be segmented and spread around the world in different locations, more countries could participate in international production and trade

But these opportunities are not easily tapped by all countries Only countries with a broad range of technological capabilities are able to host specialized activities in the various segments of goods and services production

New approach in policies : focus more on effective collaboration between partners to attain real technology transfer 2/Technology policies

New policies are also aimed at inducing TNCs to improve the content of their technology transfer by providing better domestic skills, capabilities, supplier networks and infrastructure

The new technology paradigm conceptualizes innovation and knowledge encompassing not only product and process technology but also organizational knowledge New skills and institutional changes are required

New technologies relative to conventional technologies : low cost-solutions, and leapfrogging provides high-tech, inexpensive in the long term, and possible blending technologies (traditional with new, big with small and indigenous with foreign). 3/ Leapfrogging and technological learning

New technologies: Hard to learn but high potential for further innovation Technological choice: choosing the most appropriate technology for a particular period in time or choosing the most appropriate path for technological development over time (technological change is path dependent).

Countries in higher up the technology ladder, better positioned to acquire and adapt high-tech. Countries in lower down the technology ladder, better to avoid technological fixes and choose technological solutions with potentially higher learning spillovers

Technology acquisition and application to be accompanied by deliberate policies to stimulate technological learning and the enlargement of local absorptive capacities (necessary for moving up the technology ladder) Technological learning requires institutional capacity: successful cases of leapfrogging of Brazil and Malaysia in telecommunication and information technologies

As an example, the automotive industry in South Africa: from a highly protected, inward-focused industry, to one with a marked export orientation competing effectively in global markets ( preliminary findings of a series of case-studies: Brazil, India and South Africa). 4/Openness of economy and integration into the world economy

Integration into global markets facilitated by: Specific industry support programmes. Institutional support in innovation and technological development ( essentiel role of the South African Bureau of Standards for local firms to meet the high technical standards)

Close links with foreign firms : facilitated technology and skills transfers, organizational development, and access to international markets. Effective linkages between assemblers and components manufacturers : instrumental in driving technological development and setting industry standards

Role of regulatory policies and national authorities: promoting an enabling environment for innovation and technological diffusion involving multiple actors ( public institutions, domestic firms and entrepreneurs, nongovernmental organizations, multinational companies, international research consortia and individuals)

Technological development and upgrading: important factor for the integration and participation of developing countries in the international trading system. This can be facilitated by not only domestic but also international actions

Including human resources development, strengthening of the policy and legal frameworks and competitive environment, establishment of science and technology institutes and infrastructure, business support services and home country measures encouraging technology transfer.

There are also risks: access to these critical technologies may be limited in an overly protectionist intellectual property environment that does not properly balance incentive to innovate against the needs for dissemination of knowledge.