1. International Technology Transfer (ITT) and Technological Capability Upgrading of Pakistan’s SME clusters
Presenter
Ahsan Munir

2. Layout of Presentation
Definition of International Technology Transfer (ITT)
Definition of Technological Capability Upgrading (TCU)
Factors affecting ITT and thus TCU in a developing country
Focus of factors affecting TCU in Pakistan
Research Methodology
General characteristics of researched clusters
ITT initiatives taken by researched firms
Findings
Recommendations for facilitating ITT for TCU
Ahsan Munir

3. 1. Definition of ITT
ITT in context of developing countries, such as Pakistan, has been described as:
ITT covers international transfer of all forms of physical assets, knowledge and human capabilities for the manufacture of a product or for the application of a process
ITT is a major source of TCU in firms, especially SMES, in developing countries
Ahsan Munir

4. 2.1 Definition of TCU
TCU in context of developing countries, such as Pakistan, has been described as: The ability of a firm to buy, understand(assimilate), use and adapt (or change), and improve or create a technology for better value-added processes and products for existing and higher end markets
Ahsan Munir

5. 2.2 Phases of TCU in a Developing Country
Ahsan Munir

6. 3. Factors affecting ITT and thus TCU in a Developing Country
Government policy
Local development agencies
International development agencies
Academia
Ahsan Munir

7. 4. Focus of Factors affecting TCU in Pakistan
Ahsan Munir

8. 4.1 Focus of government policy
SMEs policy focuses on business performance, access to different markets, quality, international accreditations, supply chain management
However, there is no effort to identify technological capability of cluster(s) and their upgrading
Ahsan Munir

9. 4.2 Focus of local development agencies
Focus of government development agencies, such as SMEDA, TUSDEC, TDAP, TVETA, have been generally to improve the operational efficiency of SMEs to make them cost competitive
However, integration/ coordination among local agencies would help to upgrading existing SME clusters’ capabilities
Ahsan Munir

10. 4.3 Focus of international development agencies
Various development agencies, such as UNIDO, JICA, individually focus on increasing productivity and quality of various SME industrial clusters
Ahsan Munir

11. 4.4 Focus of academia
Again, local literature focuses on manufacturing SMEs to improve business performance, access to different markets, quality accreditation, supply chain management
However, international literature has moved from focusing on operational efficiency to TCU for sustained competitiveness
Ahsan Munir

12. 5. Research Methodology
Select leading SMEs which have been in existence for more than twenty years
Interview SME executives for ITT initiatives
Analyse data at cluster and cross-cluster level
Ahsan Munir

13. 6. General characteristics of researched clusters
Ahsan Munir

14. 7. ITT initiatives taken by researched firms
Industrial cluster
Name of firm
ITT initiative
ITT initiative type
(process, product, managerial)
Factor(s) affecting ITT initiative
Outcome
Constrain for ITT initiative
Enabler for ITT initiative
Leather cluster
Firm A
Setting up of production line
Process upgrading
Existing workforce not trained on modern lines
Hiring of foreign consultants to train local workforce
Increased productivity
improved quality
Sports goods cluster
Firm E
Hockey manufacturing
Expertise not available within firm or cluster
Collaborated with customer to train local workforce according to their requirements
Secured existing market
Pre-stretched leather football manufacturing
New, mature product introduction in firm
Addition to product portfolio
Artificial leather football manufacturing
Collaborated with customer to train local workforce according to their requirement
Firm F
Sports shoes manufacturing
Product upgrading
New product
New customers
Firm G
Fair trade certification
Managerial upgrading
Hired foreign consultant to achieve it
Football manufacturing
Collaborated with German customer to improve manufacturing process
Process improvement
New customer
Surgical instrument cluster
Firm I
FDA approval
Hiring of consultant, internal R&D
Firm K
Improved products
Collaboration with German customer
Improved productivity, quality
Collaboration with Japanese customer
Own brand name in Japan
New market
Ahsan Munir

15. 8. Findings
Most of ITT initiatives involved transfer of process technology for improved productivity and quality
Few ITT initiatives involved product transfer, but firms have not been able to improve them
Some ITT initiatives involved international accreditations against targeted markets
Firms identified customers and international exhibitions as source of ITTs
However, initiatives did not show local development agencies or academia cooperation
Also, firms cited lack of government support in identification of suitable technology, its acquisition and exploitation for process/product upgrade
Ahsan Munir

16. 9. Recommendations for facilitating ITT for TCU
First, suitable sectors/ clusters for TCU need to be identified
Second, their technological capability levels needs to be identified/ categorised
Third, it needs to be determined if these sectors /clusters need to go for capacity increase/ product portfolio increase or for better value-added processes and products
Fourth, suitable sources of ITT be identified
Fifth, suitable infrastructure needs to be identified and put in place to acquire the requisite technology
Sixth, HR should be identified and trained to understand how this imported technology functions
Lastly, organisational changes such as new production methods, new production layout, new marketing skills need to be put in place to absorb and exploit new technologies
Ahsan Munir

17. THANKS
Ahsan Munir