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CHAPTER 2 Marshaling Technology for Development: Assessing the Challenge Technological change is a complex process. For some radical innovations- as was the case for the airplane, radio, and nuclear weapons~uriosity, new knowledge, or political will create a need; the need will lead to an invention; and the invention will evolve into a new technology. The new technology, if success- ful and useful, will diffuse and will replace older technologies, just as the rail- roads replaced canal transportation and motor vehicles and airplanes replaced railroads. It will then spread through trade, the exchange of information, deliber- ate technology transfer, conquest,-or industrial espionage. For incremental innovations, the process is more subtle, even imperceptible. Because of modifications on the factory floor, one firm's products will be better designed, more efficiently made, or more effectively marketed than those of other firms. Success will generate imitators, and the new product gradually will become the industry standard, pushing aside similar products and, if it continues to im- prove, replacing other technologies. This process is more analogous to the evolution of biological species, and it can be just as effective at bringing radical change. CONDITIONS FOR CHANGE But exactly what are the conditions that encourage invention and innovation, both radical and incremental, and facilitate the acquisition of technology? This This chapter draws substantively on the invited papers by Balzhiser (energy technology), Bugliarello (generation, transmission, and diffusion of knowledge), Harwood (agricultural develop- ment), Lesgold (educational technology), Mayo (information technology), and White (sustainable development), as well as the discussions of the break-out groups. 29

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30 Marshaling Technology for Development question has been studied extensively at the firm level, but almost entirely in the developed countries and in the context of competition among developed coun- tries. Less clear are what fundamental conditions within a developing country enable producers to be innovators in world markets. A modern, effective technological infrastructure enables a country to gener- ate and utilize knowledge and innovation. The evaluation and acquisition of new technologies are made easier when the society and the economy, including avail- ability of investment capital, are intrinsically receptive to innovation. The impor- tant elements of such a technological infrastructure are: . An educational system that encourages creativity and the pursuit of scien- tific and technological knowledge An educated and skilled work force A network of capable research laboratories, linked together and able to gain access to scientific and technological information from the outside world Facilities for product development and quality control, including testing and standards laboratories responding to international standards Critical technical resources, including machine shops, precision found- ries, and computational facilities . An industrial structure that will sustain a productive "industrial ecology," in which small, technically oriented and potentially innovative suppliers serve larger firms that have access to markets and resources . - Institutions or programs that link researchers and inventors to the poten- tial users of the knowledge they generate, as well as to investors A legal system to protect technological innovation, whether indigenous or imported An economic policy environment that encourages research and develop- ment and investment in innovation . control . structure. A reliable electric power network with good frequency and amplitude An adequate transport, communications, and telecommunications infra For successful innovation, it also is imperative that a country's people and their leaders view the effective utilization of technology not just as an option but as the key to successful and sustainable development and that they be prepared to act. One of the factors undoubtedly contributing to the economic success of Taiwan in recent years is the number of Ph.D.s in leadership positions, including the current cabinet members and the prime minister. Among many countries, especially the poorer ones, a widespread commitment to technology has yet to emerge, hindering the process of technological development that has been so successful in Europe, the United States, Japan, and other parts of Asia. For those developing countries, it is essential to emphasize technological literacy in the schools indeed, among the entire population.

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ASSESSING THE CHALLENGE 31 Obstacles to the universal adoption of biotechnology projects and products are cultural, educational, economic, governmental, and infrastructural in nature. If, for example, difficulties are encountered in delivering agricultural products to market, no change in the qualities of those products will overcome the infrastructural problems. In other words, there is no reason to introduce genetically engineered apples that ship better in a region where the apples rot on the trees because they cannot be shipped to market. RITA COLWELL It also is important that each national research community concentrate on the needs of its country. For a developing country, this usually means a strong em- phasis on applied research and development, working on problems in search of solutions, without neglecting the basic research that provides a base of talent and a window on the knowledge generated elsewhere. It also means having the flex- ibility to cut across the traditional academic barriers to carry out the interdiscipli- nary studies that are so important in the technological market. Management issues are also critical. New technologies usually require new techniques for their management, starting with selection and acquisition of equip- ment, and proceeding to training of workers, process and product design, market- ing, quality control, cost containment, labor utilization, and safety. Learning from the experience gained in other places is the best method, where possible, but attention must be paid to local conditions-economic, physical, and social and local capabilities. Transfer of technology must embrace transfer or development of the skills necessary to manage technology. Finally, developing countries will find it advantageous to pool their scien- tific, technological, and educational resources with those of other, similar countries because few of them have enough skilled scientists and engineers and resources to make many breakthroughs alone. They must be receptive to the importation of new technologies, whether through foreign direct investment, joint ventures, or licensing from other countries. The ability to share resources and identify oppor- tunities for technology transfer will depend on the establishment and mainte- nance of communications, transport, and personal links among countries. CONNECTIVITY It is one thing to recognize that the information and technology desired are available, but it is quite another to gain access to them. That will require that the developing countries strengthen their linkages with the rest of the world by

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32 Marshaling Technology for Development investing in the infrastructure needed to receive and transfer information. In this undertaking, partnerships are key: between research institutions in developed and developing countnes, between domestic and foreign films, and between research institutions and the private sector. The physical infrastructure needed to support connectivity includes comput- ers and telecommunications hardware and software (including connections to the Internet and World Wide Web) and reliable supporting power and communica- tions networks, as well as the transportation basics roads, airports, navigation. A modern information and communications infrastructure will provide up-to- date technical information and publications and will allow instant communica- tion among scientists around the world. Technical information services linked to worldwide information networks can distribute knowledge quickly and cheaply to the productive sectors. Thanks to satellites, the developing world can leapfrog immediately to advanced telecommunications capabilities, bypassing the long road already traveled by the industrialized world. Direct international links between firms are important vehicles of technol- ogy transfer. The observed correlation between exporting and growth in produc- tivity arises partly because exporting is an extremely effective source of learn- ing. Foreign direct investment provides not only capital but also technology, management, access to global networks of information, and access to markets. Strategic alliances between foreign and domestic firms in joint ventures and between domestic fimns in the same or related industries~reate pathways for the transfer of knowledge. In addition, much technology is transferred through informal means~opying, reverse engineering, reading technical journals, at- tending foreign conferences and trade fairs, and hiring foreigners with techno- logical expertise. But how do the users of technology channel their feedback to the generators of knowledge? The establishment of linkages between networks of research Regardless of the undeniable improvements in electronic and computer communications, the need for scientists working together to interact daily is unchanged, if only because science is increasingly cross-disciplinary and thus demanding of team effort. This is no less true in developing countries and may be even more urgent in some respects: efforts to develop and extend technologies in most such countries have often failed as a result of the lack of well-articulated teams of trained personnel to facilitate real technology transfer. KENNETH I. SHINE, M.D.

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ASSESSING THE CHALLENGE 33 laboratories and the private sector will facilitate such feedback. Clusters of research-production-marketing activities, such as applied research parks or uni- versity-industry parks, would serve to better link research to production and the marketing of the results. Rather than dispersing assets, such parks can offer synergistic concentrations of knowledge workers and facilities. In the agricultural sector, much technology transfer occurs horizontally- farmer to farmer. In industrialized countries, many farmers use electronic net- works and other modern information technologies to make this process more effective. This would likely work in developing countries as well, thereby facili- tating technology transfer among farmers and strengthening their linkages with markets and price information. In the education sector, electronic networking could put teachers in contact with one another, provide classroom materials from domestic or international sources, as well as give both teachers and students hands-on experience in using communications technology. THE NEGATIVE IMPACTS OF TECHNOLOGY The introduction of new technologies may provide beneficial economic op- portunities or a necessary lifeline for feeding, employing, and ultimately limiting an expanding population. But negative impacts on society will be felt as well, bringing environmental, social, and political change. If some of these effects of new technologies can be predicted, steps can be taken to recognize and prepare for them. Technological innovations often make critical industrial or agricultural prod- ucts uncompetitive or obsolete. This happens in developed countries, as some American textile producers well know, and will certainly occur in developing countries. Such an effect will put at risk any country that fails to anticipate change, or whose economy relies heavily on a few traditional products. Likewise, in those countries where manufacturing is an important source of employment for the marginal or uneducated worker the case in much of the world the intro- duction of manufacturing practices that are more knowledge-based and special- ized will cause dislocations, presenting difficult educational and political chal- lenge in most countries. Attempts to hold change at bay, however, by closing borders to innovation will be counterproductive even in the short term. The restructuring of industry and the retraining of workers will require major deci- sions, significant resources, and, where urgent, outside assistance for the affected communities. Exposure to new technologies and to international culture and fashions may weaken long-standing traditions and practices, especially among the younger generations. This effect occurs everywhere, but it is less disruptive when the changes come about gradually from indigenous developments. Developing coun- tries may need to fortify key elements of their culture through special school programs and by celebrating and encouraging local literature, music, and preser

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34 Marshaling Technology for Development vation of historical sites and local languages. Sometimes the new technologies themselves will assist in the preservation, enjoyment, and even exportation of the local culture. One country's IMAX productions featuring its diverse cultures and natural beauty are seen each year by thousands of school children locally and help to attract many tourists from abroad. Over the long term, there is potential for the convergence of developed and developing economies through universal access to knowledge. Over the short term, however, the capacity to benefit from access to knowledge, technologies, and markets will depend on the initial stock of educated human capital and real capital. Productivity in services and information-intensive activities will grow faster in the North than in the South, and faster in the newly industrializing countries than in the least developed. Accordingly, further economic divergence may be the outcome in the initial stages of the process. The danger of a widening gap between technology haves and have-nots exists not only across countries or groups of countries, but also across socioeco- nomic groups within individual countries. Equity issues surrounding different rates of investment and development in different regions may create unrest and lead to the persistence of poverty unequally within countries. Increasingly, the distinction will not be between developed and developing countries, but between populations that are technologically adept and those that are not, and between those that are plugged in to rapidly changing knowledge and those that are not. But these changes are not elective; they already are becoming reality, and it will be the responsibility and in the interest of all to ensure that all countries and populations have access to knowledge and opportunity.