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The Global Generation, Transmission, and
Diffusion of Knowledge: How Can the
Developing Countries Benefit?
GEORGE BUGLIARELLO
Chancellor, Polytechnic University
It is by now almost a mantra that the human species has reached a stage in its
trajectory in which information, or more broadly knowledge, has become the new
leitmotif and organizing principle of society, much in the same way that energy
was for the industrial revolution. (When feasible, the terms knowledge and infor-
mation are used interchangeably in this paper, although, strictly speaking, knowl-
edge connotes more than quantifiable information; it involves awareness, insight,
and the power of discernment.)
Information and learning the process by which information is received and
absorbed to become knowledge have guided human actions from the begin-
ning. But it was only until well into this century that engineers and scientists were
able to define information as the removal of uncertainty, to measure it precisely,
and to create devices to transmit, store, and manipulate it at unprecedented rates
and over great distances. Furthermore, society has recognized the utility of infor-
mation and has developed major economic activities based on it, as well as
greatly enhanced people's capacity to generate information through research. But
the very existence of the developing countries indicates just how much knowl-
edge the world still needs to narrow the gap between these nations and the
developed countries. The task of the developed countries in achieving this is even
more daunting than that of the developing countries because the consumption
patterns of the industrial nations cannot be used as a model for the rest of the
world.
61
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Marshaling Technology for Development
THE GENERATION, TRANSMISSION, AND
DIFFUSION OF KNOWLEDGE
Every day some new knowledge is generated for example, about nature,
about how to create and use artifacts, about society itself-dispelling some un-
certainties. At the same time, every day new uncertainties demand the generation
of new knowledge. Thus findings about the existence of genes and their role in
the replication of life raise a host of new questions: from how humans fit into the
evolution of life, to the role of specific genes, to how genes can be altered to fight
specific diseases and used to modify living organisms so that they better respond
to human needs.
Today, it is impossible to quantify how much knowledge is being generated
worldwide. Nor is it possible to know the extent of ignorance and of the un-
known- of that infinite reservoir from which information is extracted and knowl-
edge is shaped. More is known about certain kinds of knowledge, however, such
as that of science and technology. For example, one can count the number of
articles, books, patents, and the like in which portions of that knowledge are
contained. (Other portions directly embedded in products or know-how are often
harder to assess.) Another indirect measure for which rather precise information
exists is the number and training level of knowledge personnel, such as research-
ers with doctorates.
As the end of this century nears, it is obvious that, in spite of many advances
in knowledge, society still faces enormous uncertainties and ignorance in areas of
immediate relevance to its well-being. Not only is it far from understanding many
natural, social, and economic phenomena, but it also is far from knowing how to
act on the basis of the knowledge and information it possesses. It does not know,
for example, how to successfully educate all of the world population to respond
to what is known about health and demography or natural hazards, or how to
eliminate poverty.
Some of the impediments to dealing with these problems are in the social
domain, while others are intrinsic to the genetic heritage of the human species, a
heritage that is just beginning to be understood. But regardless of whether the
necessary information is social, psychological, or genetic, one cannot act intelli-
gently without it. This is a universal problem for people, for organizations, and
for countries, whether developed or developing.
The World Knowledge Infrastructure
The world knowledge infrastructure-the complex of systems for the gen-
eration, transmission, and utilization of knowledge is large, ill-defined, and still
in its infancy. Moreover, its growth has not followed a master plan; it often has
occurred by the opportunistic aggregation of many elements, as in the case of
many telephone networks. Nevertheless, some of the instruments needed to com-
prehend and envision ways to coordinate this infrastructure are now available.
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GEORGE BUGLIARELLO
63
For the generation of knowledge, or, in a narrow sense, the extraction of
information from natural or human-made events and environments, the predomi-
nant organized players today are researchers and research institutions. The knowl-
edge these players acquire is generally recorded and transmitted, albeit not uni-
versally received. Indirect measures of its magnitude show it is growing
exponentially. In addition, a vast if poorly tapped body of valuable knowledge is
being generated outside the research laboratories, by experience, by trial and
error, or by chance. This largely grass-roots knowledge is recorded far less sys-
tematically, if at all; is transmitted haphazardly; and is impossible to measure
even indirectly.
The instruments for the transmission of knowledge are myriad, ranging from
schools, books, newspapers, and data banks to professional and scientific societ-
ies, conventions, information "highways" and postal systems, financial institu-
tions, trade, technology transfer activities, and personnel exchanges. The Interna-
tional Congress of Scientific Unions (ICSU), with its well over 1,000 affiliated
organizations from about 150 countries, exemplifies the global reach of these
transmission instruments.
The World Wide Web (WWW), which encompasses the totality of network-
accessible information, is another important and rapidly growing embodiment of
human knowledge. ~ For developing countries, the Web, by exploiting the results
of international collaboration, is an extremely important tool that gives them
access to all kinds of information. Because it is "transparent" (democratic), modu-
lar, and accessible, the Web can enable a developing country to form its own
network of information and make that information available to other developing
countries and the rest of the world and vice versa. But to benefit fully from the
Web, a developing country must have in place the appropriate information infra-
structure with channels of high bandwidth.
An increasingly promising aspect of the transmission of knowledge is the
opportunity to use advanced telecommunications to operate laboratories and
other research facilities at a distance and eventually also to perform medical
procedures. This not only can offer major savings to developing and developed
countries alike, but it also can help scientists, engineers, and medical doctors
from developing countries to work at the cutting edge of science, technology,
and medicine. In industry, offices working in real time on the same problem or
set of drawings in several locations that may be continents apart are already a
reality.
Finally, the utilization of knowledge putting knowledge to practical use-
can involve potentially everyone everywhere. But to be effective, this again
requires organizations and individuals capable and willing to act.
An integrated view of the generation, transmission, and utilization of knowl-
edge that is, the path from knowledge to action should take into account the
three distinctive interacting levels at which this process operates. At the top level
are the international networks, agencies, and organizations that are primarily
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Marshaling Technology for Development
global transmitters of knowledge, such as the International Council of Scientific
Unions (ICSU). Also at this level are found the international research institutes
such as the Consultative Group on International Agricultural Research (CGIAR)
institutions that spearheaded the green revolution and the European Organization
for Nuclear Research (CERN) which will become even more important as indi-
vidual countries find major research facilities increasingly unaffordable.
The mid, or country, level is where traditionally most scientific and techno-
logical knowledge has been generated by universities, industries, and other
institutions of a country. Transnational corporations reside at this level as well.
Like many other institutions at this level, these corporations rely on the interna-
tional networks of the first level for the transmission of information, and increas-
ingly they also rely on their own secure point-to-point communications, bypass-
ing public networks.
The lowest level is that of the grass-roots individuals where large amounts
of knowledge are both generated and received. Pinpoint transmission of this
knowledge among individuals is being enormously facilitated on a global scale
by access to the networks of the top level. But because so much is now being
received and generated at the grass-roots, people will require filters to reduce
overload and to help to assess what is valid and essential. This is a particularly
serious problem for developing countries. Markets, which are among the most
effective instruments for the transmission of information, also operate at the
grass-roots level.
The distinctions among the generation, diffusion, and utilization of knowl-
edge are not sharp because the generators of knowledge also transmit knowledge
(as in the case of World Wide Web, which was developed by CERN); the trans-
mitters also utilize knowledge; and the utilizers can in turn generate additional
knowledge. In spite of their academic tinge, the distinctions are useful, however,
in helping to understand the workings, as well as the pathologies, of the knowl-
edge infrastructure. Indeed, eventually they may help to determine the efficiency
of the knowledge process-that is, the fraction of knowledge generated that is
actually utilized.
For the three levels at which the knowledge process operates, the fundamen-
tal question is to what extent should a country or an institution contain the process
at one level. For example, should the standards that guide the process be local or
global? Should doctors and engineers be licensed to practice locally-or globally
throughout the reach of international networks? Should a country developing a
financial market think locally or globally? Similarly, should the language of
instruction that is, the communication of knowledge be the local one or a
world language? In each case the answers demand that one balance realism and a
sense of vision and opportunity. But just one of many historical examples shows
how difficult this is to achieve: the desperate and largely unsuccessful struggle of
some of the rulers of the Ottoman Empire in 1800 to bring their institutions to a
more modern international standard.2 Current examples are the reluctance of
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GEORGE BUGLIARELLO
65
some countries and institutions to linkup to the Internet, and the difficulties in
reaching a consensus on how to achieve sustainable development.
How Does the Knowledge Infrastructure Actually Work?
The workings of the world knowledge infrastructure are still far from being
well understood. Even in the absence of specific data, however, it is evident that
much knowledge is not acted on for several reasons. First, only rarely is knowl-
edge conveyed from generation to utilization through a direct pipeline. Much
more often it is conveyed by a kind of general diffusion process, and usually only
specialized gatherers, such as researchers or intelligence agencies, can harvest it
effectively.
Second, the feedback from the users of knowledge (the entities and individu-
als that transform it into action) to the generators has not worked very effectively.
Thus developing countries often receive knowledge that the industrialized world
believes they should have, although it is not necessarily the kind of knowledge
that the developing countries feel they need. This can be as much perception as
reality, but the perception has led to accusations of cultural imperialism, and the
reality has led to serious mistakes, such as the building of the ill-advised Arti-
bonite dam in Haiti in the late 1950s. Today's worldwide information structure,
made possible by advanced telecommunications, allows the feedback from need
to generation of knowledge to be much faster and more effective. Furthermore,
that feedback could operate more and more in both directions because the devel-
oping countries possess important elements of knowledge (such as native cura-
tive remedies and alternative medicine) that are in demand by developed coun-
tries.
Finally, many entities (such as countries, agencies, and individual compa-
nies) do not possess the mechanisms needed to receive information or sufficient
information to act, or, even if well informed, they are not always capable of
acting. Although this is particularly true for many developing countries, some
industrial giants in developed countries have suffered grievously from some of
the same failings.
On a global scale, the knowledge process has been successful in certain areas
but not universally (Table 1~. It has helped to contain some infectious diseases, to
spread scientific and technical knowledge, and to create worldwide markets. But
the process has worked at best only partially in the eradication of hunger and
poverty and in the development of population policies, and it has worked very
poorly in the avoidance of regional conflicts and genocide and in the preservation
of ecosystems.
The Need for a Global Knowledge Strategy
The challenge is how to increase the effectiveness of the knowledge pro-
cess its ability to do what it is intended to do with as much economy of means
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Marshaling Technology for Development
TABLE 1 The Information Infrastructure Health Issues
Feedback Channels Mechanisms to Mechanisms to
to Generation of Receive Infor- Act on Infor
Phenomenon Information Knowledge mation mation
Electro- Insufficient Weak to strong Strong Strong to weak
magnetic (utilities,
radiation mass media,
general public)
HIV Insufficient Strong Strong in some Strong to weak
countries (med
ical establish
ment, media, and
general public)
Weak in some
LDCs
Cancer Insufficient Strong Strong (medical Strong (medical
establishment, establishment)
mass media, to weak (pre
general public) vention)
Cholera Sufficient Strong Strong to weak Strong to weak
(developed coun
tries vs. Rwanda,
for example)
Famine Sufficient Generally strong Strong (inter- Often weak and
national agen- uncoordinated
cies) to weak
(some LDCs)
Health Middling Strong in developed Strong in Generally slow;
impacts of countries (popular developed coun- strong to weak
environ- cause) tries (mass (in LDCs)
mental media, general
degrada- public); often
lion very politicized
NOTE: LDC = less-developed country.
as possible. This difficult goal cannot be achieved without a global knowledge
strategy. But in spite of the work of many international agencies and the world-
wide expansion of telecommunications and information, that strategy does not
yet exist.
A global knowledge strategy should respond to two fundamental sets of
questions:
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GEORGE BUGLIARELLO
67
What do people need to know to maintain and enhance their evolutionary
advantage? What do they need to know as a species, as countries, as organiza-
tions, as individuals?
2. How do they build an effective global system to receive and act on that
information?
In the context of these questions, the developing countries want to know not
only how to implement long-term, fundamental changes, but also how to address
immediate, down-to-earth concerns. For example, how can they initiate manufac-
turing activities even before the existence of a sufficient indigenous force of
engineers? Or how can they improve agricultural production or health care before
there are adequate laboratories or agricultural and medical schools? A series of
pertinent and very specific considerations both short and long term are exam-
ined in the rest of this paper. Such an examination, however, cannot lose sight of
the global context. If the human race is to have a future, the global improvement
of economic and social conditions through better knowledge is imperative. This
is a problem that both developing and developed countries must address jointly.
It simply does the world no good in the long run if individual countries succeed in
addressing their socioeconomic problems at the cost of neglecting such global
problems as the growing depletion of the ecosphere or the potential for interna-
tional conflict.
THE IMPORTANCE OF TECHNOLOGICAL
INNOVATION TO THE WORLD ECONOMY
Of the many facets of the process through which knowledge is generated,
transmitted, and used, technological innovation is by far the most significant for
the world economy. In his 1885 presidential address to the British Association for
the Advancement of Science, Sir Lyon Playfair observed,
France and Germany are fully aware that science is the source of wealth and
power and that the only way of advancing it is to encourage universities to
malice researches and to spread existing knowledge through the community....
Switzerland contains neither coal nor the ordinary raw material of industry, and
is separated from other countries that might supply them by mountain barrier.
Yet, by a singular good system of graded schools, and by the great technical
college of Zurich, she has become a prosperous manufacturing country.... The
wealthy universities of Oxford and Cambridge are gradually constructing labo-
ratories for science.3
Just about at the same time, German industry had been able to overtake that
of France in the development of artificial coloring substances (Figure 1)-a
dramatic demonstration of the impact of systematic research conducted in dedi-
cated laboratories with full-time researchers. Such an example shows how rela-
tively recent is a clear understanding of the importance of technological innova
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350
300
250
o
~ 200
of
"o 150
Q
he 100
50
Marshaling Technology for Development
Germany
France
15
43
6
l
162
16
1858 1869 1880 1890
Year
328
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FIGURE 1 The development of artificial coloring substances in France and Germany,
1858-1890. SOURCE: Adapted, with permission, from Francis Leprieur, "La Formation
des Chimistes Francis au XIX siecle," La Recherche (June 19791: 732. @) 1979 by
Societe d' editions scientifiques.
lion to modern economies. Major technological innovations, however, have had a
revolutionary impact on the world economy, directly or indirectly, throughout
history for example, the impact of scientific navigation initiated by Henry the
Navigator in Portugal in the fifteenth century, or that of firearms and of the
railroad. These impacts changed not only regional and national economies and
global trade patterns, but also military and political balances and, in turn, the
world economy. Examples abound. In the ancient world, an innovative naval
technology enabled the Romans to defeat the Carthaginians, and such uncon-
tested power made possible several centuries of peace and economic develop-
ment in the Mediterranean region.
Today, the importance of technological innovation to the world economy is
even greater. For the first time in history, the world has acquired the capacity to
feed all its inhabitants, even if, paradoxically, for a variety of complex socio-
political reasons, hunger still stalks the planet. And for the first time in history,
thanks to technology, people have the potential to communicate with each other
across the globe, to participate in a global marketplace, and to create a global
"hyperintelligence" that could help to stem irresponsible population growth and
enhance the prospects of the human raced If the green revolution was a techno
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GEORGE BUGLIARELLO
69
logical fix-one that will need to be performed over and over until population
growth is brought under control hyperintelligence represents a fundamental
expansion of the social intelligence of the human species.
As economies have advanced, it has become increasingly clear that techno-
logical innovation, fueled by research and the generation of new knowledge, is
now the major factor in increases in productivity and the sine qua non to guaran-
tee a prosperous future. The enhanced ability to exchange information and trans-
fer technologies will enable even the poorest developing countries to participate
in the advances not only economic but also social-made possible by technol-
ogy. For example, the immense pain and inefficiencies associated with poor
health could be reduced by a worldwide system of health care fostered by tele-
communications advances. But the economic and social advances brought about
by technology are not painless or without cost.
HOW DOES TECHNOLOGICAL CHANGE HAPPEN?
Technological change is a complex process. In the simplest terms, as for the
airplane, radio, and nuclear weapons, curiosity or desire create a need; a need-
or at times serendipity-creates an invention; and an invention creates a new
technology. The new technology, if successful and useful, diffuses and overtakes
the existing technologies just as the railroads overtook canal transportation and
motor vehicles and aviation overtook railroads. Eventually (and today very rap-
idly), the new technology is likely to spread through trade, the exchange of
information, deliberate technology transfer, conquest (as in the case of the
Mongols, who transferred knowledge and technology between East and West), or
espionage.
The acquisition of new technologies does not occur, however, without a
system in place that is intrinsically receptive or capable of being made receptive
to innovation for example, the Europe of the Renaissance.5 At times, a system
is forced to be receptive such as in the Russia of Peter the Great and later of Lenin
and Stalin. Today, the existence of a national or international system of innova-
tion is recognized to be a key factor in technological advances.6 Among the many
conditions that make a system receptive to inventions and innovations, invest-
ment in the scientific and technological infrastructure and associated human re-
sources is paramount. But because many developing countries lack such an infra-
structure, they must try to operate with what they have, while patiently and
systematically developing the components of the technological infrastructure re-
quired to advance.
An effective technological infrastructure enables a country to generate and
utilize knowledge. It includes an educational system that encourages creativity
and the pursuit of scientific and technological knowledge at all levels; an edu-
cated and skilled work force; a network of outstanding research laboratories;
measures and standards laboratories; critical machine shops; linkages between
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Marshaling Technology for Development
researchers or inventors and the potential utilizers of the knowledge they gener-
ate; a legal system to protect technological innovation, whether indigenous or
imported; a financial system to invest in innovations; a fiscal system to encourage
innovation; and a general population that is technologically literate and receptive
to Innovation.
The last factor is often not given enough weight, yet history has proven its
importance. In the second half of the eighteenth century, the Encycloped~e of
Diderot and d'Alembert provided an increasingly interested general public with
a vast array of technical and scientific information. From the seventeenth to
nineteenth century, the ingenuity of a number of American inventors, who though
often not formally educated were technologically literate and operated in a very
receptive milieu, provided the new country with a variety of important technolo-
gies, from gin mills, firearms, steamboats, and bridges, to Henry Ford's automo-
biles and the Wright brothers' airplanes. In Japan, from 1853 to the battle of
Tsushima in 1905, the transformation from a feudal technology to a very ad-
vanced modern technological level stemmed largely from a disciplined, edu-
cated work force that was open, as it continues to be today, to technological
. .
Innovation.
Among many developing countries, particularly the poorer ones, widespread
technological interest has yet to emerge, hindering in many ways the process of
technological development that has been so successful in Europe, America, Ja-
pan, and parts of Asia. If technological innovations are to occur, those developing
countries must emphasize technological literacy in schools and encourage it
among the entire population.
Three other factors also are essential to innovation. First, leaders must be
well educated and seriously convinced of the importance of technological inno-
vation. And they must be prepared to act. Undoubtedly, one of the factors con-
tributing to the success of Taiwan in recent years is the number of Ph.D.s in
leadership positions, including current cabinet members and the prime minister.
Second, research laboratories must focus on the needs of the country. For a
developing country this means a strong emphasis on applied research and devel-
opment, but windows on basic science, by maintaining a core of basic researchers
who can follow and participate in world advances in science, are very important
and should not be overlooked. Research laboratories and universities also should
avoid excessive compartmentalization. The scientific, technological, and social
challenges of the developing countries, like those of the rest of the world, require
interdisciplinary interaction: materials engineering needs to interact with biol-
ogy, computer science with linguistics, medicine with sociology, engineering
with economics and the law, and so on.
Third, developing countries need to pool their scientific, technological, and
educational resources with those of neighboring countries to create critical masses
of resources that are beyond the capabilities of individual countries. Europe has
been doing this with considerable success, as exemplified by the Concorde, the
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GEORGE BUGLIARELLO
71
Airbus, its space program, and a large number of European Union programs,
from Eureka to Erasmus, that encourage intra-Union cooperative science and
technology projects. Most developing countries, of course, are still a long way
from being able to emulate these programs, but they would greatly benefit from
regional technological cooperation. If that cooperation is pursued judiciously,
starting with specific projects and extending to joint technological and industrial
policies, its benefits are bound to far outweigh those of competition among neigh-
bors. But participants in such arrangements must guard against two traditional
dangers: the possibility that a regional center will siphon off scarce talent from
the participating countries, and the tendency of a center to serve best the needs of
the country in which it is located. Here again technology can help by making
possible the creation of "distributed" or "virtual" centers, most of whose person-
nel are located in their own countries. The Third World Academy is attempting to
overcome the subcritical mass of outstanding scientists in most developing coun-
tries by operating as an academy of sciences for all of the Third World.
THE COMMERCIALIZATION AND
GLOBALIZATION OF INNOVATION
Some innovations that fill in very obvious needs such as the radio, automo-
bile, airplane, bicycle, television, or x-rays become easily commercialized and
spread globally. Even so, there are almost always struggles. Radio was not devel-
oped in the country where it was invented; the significance of airplanes as trans-
ports or offensive weapons was not envisioned at the beginning; the naval screw
propeller took a long time to prevail over paddle wheels. Thus often even the
most useful technological innovations have to overcome the hold of conservative
older technologies. Innovations that do not respond to an obviously perceived
need or desire, such as the Walkman, require even greater foresight and persever-
ance in their commercialization. And then, of course, there are those innovations
such as nuclear weapons that one struggles not to see globalized.
Each element of the relation technology-products and production-market
(TPPM) plays an important role in the commercialization and globalization of
technological innovation. But, unfortunately, many developing countries, in ad-
dition to being intrinsically weak in technology, are unrealistic in the selection
of marketable products, inefficient in their production, and naive in marketing.
In addressing these problems, a developing country, like any other country, must
consider a number of issues that go well beyond the category of "technology
transfer." Indeed, technology transfer is only one of the instruments required by
a national system of innovation- a system that needs to look just as much
inward for innovation as outward. Altogether, these instruments must include or
consider:
· The structure of industry. The size distribution of industry in a developing
country is frequently very skewed, with a preponderance of very small compa
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Marshaling Technology for Development
nies, very few mid-size companies, and only a few dominant large companies.
The very small enterprises, based perhaps on the work force of a single family, do
not have the resources and know-how to benefit in a major way from the results
of research, let alone do research. Thus research and development are virtually
nonexistent in the industry of many developing countries, except perhaps in some
large companies. Nor is there a productive "industrial ecology," such as a system
of relations between small innovative companies and larger companies that are
the recipients of innovation. Although this kind of system has succeeded in the
United States, other systems prevail in other countries, where small companies
usually serve as suppliers to big companies, which are the main source of innova-
tion. Under these conditions, universities often become even more important as
sources and transmitters of knowledge.
· Standards (agricultural, industrial, telecommunications, accounting pro-
cedures, etc.) and the quality of products and of the production process, including
services. The keys to commercialization and globalization, standards and quality
are still far from well developed in most developing countries.
· Telecommunications infrastructure. This infrastructure is very crucial but
usually is very weak. Yet, thanks to satellites, developing countries have the
opportunity to leapfrog several stages and immediately acquire advanced tele-
communications capabilities.
.
Information databases for science, technology, management, and world
trade (markets, suppliers, etc.). Such databases are usually very weak, but they
can be built more rapidly today.
.
Communications infrastructure (roads, airports, navigation). The ineffi-
ciencies of this infrastructure are costly, causing, for example, rotting of agricul-
tural products, larger-than-needed inventories, and slow payments. Furthermore,
the dreams of intracontinental networks of highways or railroads with their asso-
ciated major benefits survive today only in Europe, Australia, North America,
and parts of Asia.
.
The ``soft,, service infrastructure (accounting, patent lawyers, other legal
services, etc.~. Components of this infrastructure must be oriented toward the
needs of technological innovation and global markets.
4 __ _ . 7 . · ~ As. _ . _
.
Appropriate eaucat~ona~ system. l he educational system is the key instru-
ment through which information is being generated and transmitted to those who
will use it (ideally, all citizens) and who will, in turn, generate new information.
A frequent mistake made by developing countries is that of following uncritically
the examples of developed countries and perpetuating them by counterproductive
mechanisms of faculty selection and career advancement, based, for example, on
the production of papers rather than on the ability to teach effectively and to focus
on national problems. In a number of developed countries, faculty interactions
with industry are limited, and the duration of an education is much too long,
bringing to the job market students who are too old and have lost some of their
spark and flexibility. More important, the engineering schools of developed coun
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GEORGE BUGLIARELLO
73
tries, which are attended by many students from developing countries, do not
prepare these students fully to tackle development problems. These schools might,
for example, educate a cadre of "development engineers" who are able to work
not only with the traditional large public projects, but also with private enterprise.
This new breed of engineers, as the technical strategists of development, should
possess a keen sense of how systems work, as well as broad sociotechnological
knowledge. They should know, for example, how to identify a development
problem; how to mobilize the forces and the resources needed to solve it; how to
address critical infrastructure needs; and how to help to generate jobs by giving
small companies the tools they need, from expert advice to access to information
and research. Groups of internationally oriented specialists, who know markets
and how to reach them, and who understand the competition and the viable niches
for the products and services of a developing country, should be trained as well.
· Organization. In most developing countries, the organization of science
and technology in government, science and technology policies, industry organi-
zations, university-industry mechanisms, and peer review mechanisms, among
other areas, are seldom given the priority or addressed with the depth they de-
mand. Science and technology policies, however, cannot stand alone; they must
be connected to economic, financial, and social policies. The developing coun-
tries also need to learn the techniques of science and technology policy research,
which will serve as the basis for science and technology policy decisions.7
· Investments in "technological observatories," joint ventures, and other
arrangements. Developing countries might consider locating "observatories" in
other, more technologically advanced countries to help to assess future scientific
and technological directions and how to profit from them. These observatories,
which are used effectively by major companies in developed countries, range
from laboratories around universities and other environments that produce rel-
evant knowledge, to investment through venture capital funds in emerging tech-
nological companies of promise.
Joint ventures or other arrangements could further extend the technological
observatory concept, and the possibilities are intriguing, even if untested. Indone-
sia, for example, is investing in an advanced production facility in a technologi-
cally advanced country to serve as a training ground for developing country
personnel, as an originator of new designs that bring together the experience of
both countries, as a technological observatory, and as a port of entry into the
global market.
· Encouragement of investments from abroad. Such investments bring with
them new technologies that can in turn become the basis of indigenous industries.
· Creation of clusters of research-production-marketing activities, such as
applied research parks or university-industry parks. These clusters will facilitate
the connection of research to production and the marketing of the results. Rather
than dispersing assets, the parks offer synergistic concentrations of knowledge,
workers, and facilities.
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· Focus on production efficiency. The advantage of cheaper labor is lost if
a developing country suffers from inefficient production. Increased production
efficiency requires the introduction of automation, preferably by a cadre of effi-
ciency specialists capable of turning around an industrial company or service
organization. Although the route to economic well-being for a developing coun-
try is through higher pay for its workers, this goal must be pursued gradually to
enable the country to maintain its cost advantage while progress is achieved in
other areas.
· Encouragement of markets and the private sector. Markets generate and
utilize an immense amount of information and have been crucial to technological
innovation in the developed world. The New York Stock Exchange is too com-
plex and sophisticated to serve as a model for developing countries, but simpler
electronic markets are made possible by computer technology and the new tele-
communications networks.
As for the importance of the private sector, over the past decade six out of
seven new jobs in the United States have been generated in the this sector.
Moreover, the rate of job creation in the United States has been higher than in
Europe, where the majority of jobs has been generated in the public sector.8 To
achieve a high rate of job creation, the developing countries may need to enact
policies that enhance the dynamism of their economies, more than emphasizing
only job preservation and creation. This is the kind of hard-won knowledge that
can help to guide the strategies of the developing countries. Information from
both developed and developing countries and candid appraisals of the results of
different policies can enhance the knowledge of how the latter can generate jobs
and balance economic objectives with social compassion and environmental pres-
ervation. This is a particularly complex challenge for developing countries be-
cause with their widespread poverty they cannot adopt uncritically economic
development measures that might place their citizens at even greater risk.
· Intelligent choices of directions. Although intelligent choices in techno-
logical development are very important, much too often countries and not just
developing ones~annot discriminate and focus appropriately, particularly those
countries with weak, market-driven private sectors. The key questions are how to
add, through technology, more value to the products and services of each country
and how to create new industries. The search for the best approaches to adding
value requires systematic exploration of all potential technological opportunities,
whether in agriculture, forestry, marine resources, manufacturing, or services.
These opportunities might range from preserving products, to industrializing the
harvesting of resources (for example, aquaculture), extracting derivative products
(such as drugs, vitamins, and glues), devising new uses for products (such as
wood prefabs and glued wooden bridges), and expanding the services offered by
tourism and other activities. For energy and mineral resources, opportunities may
lie in refining within the country rather than shipping abroad.
· Understanding the "simplicity threshold"9 the threshold that separates
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GEORGE BUGLIARELLO
75
simpler products or processes from more complex ones that require high sophis-
tication in design and production-and how it relates or can relate to the indus-
trial infrastructure of a country. Such an understanding is crucial in making
intelligent choices about the creation of new industries. Today, 75 percent of
world trade such products as motor vehicles, computers, telecommunications
equipment, and aircraft are above this threshold. The products below the thresh-
old such as petrochemicals or simpler industrial components-constitute a
shrinking percentage of world trade and have smaller value added. Again, in the
area of processes a growing portion of products in the world market stems from
complex processes above the threshold.
But such percentages do not mean that the world will not continue to need
the many basic products below the simplicity threshold. Rather, it means that to
advance, a developing country must find ways to add value to those products and
should not rely exclusively on them. The move from simpler products and pro-
cesses, including services, to more complex ones depends critically on knowl-
edge and on the ability to create learning environments. In these new organiza-
tional environments, the acquisition of knowledge and feedback from experience
are viewed as the sine qua non for survival and progress. But their creation will
require profound transformations of often ossified or ignorant bureaucracies.
In endeavoring to pass over the simplicity threshold, a number of former
developing countries, including Taiwan, Korea, Singapore, and Malaysia, have
succeeded in going down the path from selling foreign products internally to
manufacturing parts for those products, to manufacturing the entire product. In
the future, however, that path is not likely to be as linear as in the past. The
industry of a developing country will have to learn not only how to supply parts
and components to companies abroad, but also how to master in turn the out-
sourcing process by integrating products and services acquired from abroad.
Furthermore, if a country has a large cadre of well-educated specialists, it also
can supply the world market with advanced labor. For example, today India,
Pakistan, and Russia provide software and software designers for American and
European companies, an activity greatly enhanced by telecommunications.
During its development, Japan followed a different, less common, and ulti-
mately, in terms of an open global economy, a less desirable path by typically
importing a prototype or concept, followed by retroengineering and full-scale,
continually improved product manufacturing. This was possible only because
Japan had a highly skilled technical work force and strong protectionist policies.
It was facilitated by a large internal market that could subsidize exports through
higher internal prices and could absorb the initial run of products so that they
could be tested before reaching the world market. The size, current or potential,
of the internal market is always a most important strategic determinant, regard-
less of the industrial strategy adopted. Thus Indonesia, with a population of 200
million and a rapidly advancing-even if still extremely low gross national
product (GNP) would follow a strategy quite different from that of Cuba.
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POSITIVE AND NEGATIVE EFFECTS OF TECHNOLOGICAL
INNOVATION ON DEVELOPING COUNTRIES
Technological innovation has a tremendous impact on developing coun-
tries-on their agricultural production, health care systems, education, and work
habits. These impacts in turn greatly affect family size, urban migration, every-
day life, the condition of women, and other social concerns. For example, al-
though improved conditions for women are, in general, still much too slow in
coming, women are training to be astronauts in Indonesia, studying engineering
in Libya, and holding increasing numbers of professional positions in many
developing countries. The close correlations observed between higher literacy
rates and lower fertility rates also are remarkable.~°
The political impacts of technological innovation have been equally signifi-
cant. Telecommunications helped the coming to power of the Ayatollah Khomeini
in Iran and the development of political consciousness in disenfranchised popula-
tions. The dismantling of the Soviet Union in 1991 was triggered by an increasing
inability to compete technologically with economies that had reaped the benefits
of advanced systems of innovation.
Different developing countries with differing value systems will inevitably
see these impacts in different lights, but the impacts cannot be ignored. The
inescapable fact is that the introduction of new technologies brings with it irre-
versible social and political change. Once some technological innovations are
introduced, and with them a glimmer of a different future, a country, for better or
for worse, is never going to be the same. Even strong authoritarian regimes (such
as China or the former Soviet Union) cannot stop the process of change.
Some of the impacts of new technologies can be negative. When they occur,
such impacts must be recognized and mitigated, even if they are often hard to
foresee and even harder to modify. This is the responsibility not only of the
developing countries, which can be easily tempted to accept new technologies
uncritically, but also and above all-of the developed countries.
One negative impact might be loss of local economic autonomy. In a region
-producing for the world market, fluctuations in that market or competition from
other regions can be devastating. Thus it is imperative that a developing nation
differentiate its products from others, as well as seek efficiency, quality, higher
value added, and regional cooperation. Technological innovations that render the
industrial products of a particular developing country obsolete can come on the
scene very rapidly. The market also can be capricious, as in the case of fashion, or
affected by new concerns, as in the case of the environment. These are all factors
that can put at risk a country that does not try to anticipate change, or that relies
too much on an economy based on few products.
Yet another negative impact is an extraordinary dependence on supplies
from other parts of the world such as fuel, machinery, information, and person-
nel. The effects of the recent embargoes on Haiti and the isolation of Cuba are
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77
examples of how desperate the situation can become when those supplies cease to
be available. And in Africa, the Sahel suffered widespread devastation when fuel
became scarce and prohibitively expensive. Of course, no country in the world
can be an island unto itself, but developing countries with limited resources are
particularly vulnerable.
Increased use of resources an inevitable correlate of economic develop-
ment leads to environmental depletion and increased pollution and waste. The
tragedy of many developing countries is the merciless exploitation, borne out of
desperation, of their natural resources and the devastation of their environments.
Abundant, inexpensive labor should make it possible to create new, appealing
environments offering a refreshing contrast to those of highly industrialized coun-
tries. This potential advantage should not be lost if a developing country is to
provide a higher quality of life for its citizens and if it seeks to attract tourism as
well as commercial, service, and industrial nonpolluting operations from devel-
oped countries.
Unrealistic expectations and aggravated internal inequalities also are nega-
tive side effects of technological innovation. Once a country embarks on the path
toward technological development, the expectations of its population almost in-
evitably exceed the ability of the country to bring social and economic advances
to all segments of its population. The result is the potential for unrest and the
persistence of poverty in many regions. For example, from 1980 to 1990 in Latin
America, families in poverty (defined as the percentage of people lacking the
income for a minimum level of food, shelter, health, and educational services)
increased from 35 to 39 percent. Poverty is projected to remain at the 38 percent
level to the year 2000, in spite of positive increases in the gross domestic product
(GDP) from the late eighties to today. In China, the economic quasi-laissez-
faire policy of the government has encouraged a great deal of technological and
economic development, but at the price of great imbalances in the affluence of
different segments of the population. Even in Europe and the United States, these
imbalances have been very hard to overcome. The fact is that in a world society
in which the traditional source of employment for the uneducated- manufactur-
ing is becoming highly specialized, the key to social and economic advances is
knowledge. Thus inequalities in access to information networks and in the ability
to use information are particularly serious and must become a major concern of
the developing countries and the rest of the international community alike.
The breakup of traditional culture is perhaps the most distressful aspect of
technological change since such change can have a much greater impact on
developing countries than on most developed countries, where the changes have
occurred more gradually and are much more the result of indigenous technologi-
cal developments. In a developing country, technological change arrives almost
by definition from the outside world in the form of full-fledged products that
sweep the country without giving social structures and mores sufficient time to
adapt. Thus the developing countries need assistance in fortifying key elements
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of their culture before they are irretrievably swept away to the loss not only of the
developing countries but also of the rest of the world.
FORECASTING AND ASSESSMENT IN INVESTMENT DECISIONS
The fundamental question when making an investment decision is: Will the
investment achieve its goal? Difficult for any country, this question is particu-
larly so for a developing country that is unlikely to have sophisticated mecha-
nisms for assessing risks and benefits. In any major investment and borrowing
decision, a developing nation may place at risk its very future.
Risk is a multifaceted sociotechnological problem. Some risks are purely
technological for example, an intensive irrigation project may cause salination
of the soil or saltwater intrusions in the water table, a reservoir may become silted
too rapidly, or a new industry may turn out to be technologically noncompetitive.
Financial risks could take the form of an investment that may not be repaid,
or the rate of return fixed at the outset may become less desirable over time than
alternate investment opportunities. Moreover, a recipient country may continue
to borrow from other sources and accumulate an irrationally structured debt that
is hard to assess but a serious risk.
There also are the social risks that a project (or the fiscal conditions associ
ated with its financing) may turn out to be counterproductive. For example, the
required fiscal discipline may place the leadership of a country in an impossible
position and cause drastic political changes (which has happened repeatedly in
South America). Or the productive capacity may shift counterproductively from
the countryside to the cities. The associated increase in urban population entails
all kinds of risks: invasion of fertile land (as in Cairo), greater exposure of large
population conglomerates to disease and natural hazards such as floods or earth-
quakes (but also to better educational and economic opportunities), changes in
the social support system from extended to nuclear families, crime, irreducible
poverty, and greater opportunity for social upheavals. Because these kinds of
risks are so difficult to assess, some international assistance agencies have simply
given up trying.
A particular set of socioeconomic risks stems from the difficulties in fore-
casting demand. While it is clear, for example, that energy demands, like those
for water, tend to increase with population and GDP, they are more difficult to
predict quantitatively because they are affected by increases in production effi-
ciency, by emerging new technologies, and by possible changes in the pattern of
energy use. Energy demands also are affected by international cartels and the cost
of energy supplies, and by concerns about the environment that were either
underestimated or not foreseen when a power plant was constructed. This occurs,
of course, in both developing and developed countries, as exemplified by the
reduced emphasis on nuclear energy in Germany, Italy, and the United States.
Given these risks, what should a developing country do? Primarily, it must
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79
develop strong mechanisms of technology assessment and risk evaluation. For
any country, technology policy decisions are never isolated from political consid-
erations. But the existence of a creditable capability for science and technology
assessment and for science and technology policy is essential to survive in a
knowledge-oriented world. That capacity must be honed by experience and fre-
quent contacts with corresponding entities in other countries and with such inter-
national organizations as the World Bank.
Technology assessments should not be only retrospective; they also should
operate in a feed-forward mode to determine foreseeable future impacts, the
probability and magnitude of future risks, and possible corrective measures to
reduce them. But in undertaking its assessments and risk evaluations, a develop-
ing country should not operate independently of an organization like the World
Bank that endeavors to assist it and of other countries that are potentially rel-
evant. In turn, the Bank, however strong its technical resources, can benefit from
the information obtained from such institutions as the National Research Council,
with its capacity to mobilize in a multidisciplinary fashion a large number of
highly qualified scientists, engineers, economists, and health care personnel.
Two principles are particularly important for a developing country embark-
ing on technological forecasting and assessment. First, it must avoid being cap-
tured by projects that may appear glamorous but do not respond to the urgent
needs of the country or are unrealistic, such as being far above the simplicity
threshold. Examples abound not only in developing countries but also in the
industrial countries, the main difference being that developing countries cannot
afford to invest very scarce resources poorly. Second, regardless of what direction
the future may take, close attention to the connection between technology and
socioeconomic developments is imperative. Failure to see the many possible
pathologies of that connection is a major cause of breakdowns in the use of technol-
ogy for development. A sociotechnological factor of considerable importance,
among many, is the different time constants of technological development and
political life and associated different levels of knowledge and experience. Politi-
cal changes occur both in the developing countries and in the more developed
countries with which the developing countries need to interact in order to sustain
their technological development. But the success of any technological develop-
ment depends on continuity of conception, creation, and operation. If the political
life span of persons involved in the technological process is much shorter, the
learning curve must be started over and over again. The World Bank, with its
inherent greater continuity, can perform a most needed balancing role in this regard.
WHAT ARE THE FUTURE COMPARATIVE ADVANTAGES FOR
TODAY'S LABOR-SURPLUS DEVELOPING COUNTRIES?
As the world economy becomes ever more knowledge-based, it is clear that
the value added made possible by information (by science, advanced design
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concepts, technology of intelligent materials, automation, software, sensors, ad-
vanced services, new medical concepts, etc.) is propelling today's economically
more advanced countries. Thus to close the gap with these countries, developing
countries cannot continue to rely over the long run on cheap labor. While a
developing country cannot adopt the capital-intensive strategies of developed
countries, it should not see itself stuck hopelessly with a labor-intensive strategy;
a knowledge-based strategy offers it the opportunity to emerge from such a
situation. The labor cost gap with the more advanced countries will close slowly,
however, in spite of the exceptionally fast rates demonstrated by such countries
as Taiwan or Korea. This will give many developing countries some breathing
space, but they cannot stand still lest they fall further below the simplicity thresh-
old. Even the poorer developing countries will need to gradually introduce com-
puters and automation, enhanced educational systems, and appropriate science
and technology policies to begin to transform their work forces and economies.
It is imperative as well that they add value to the fruits of their labor through
an appropriate selection of products and technologies and an effective mix of the
different factors of production. For example, the well-trodden path from the
production of parts to that of complete assemblies offers the opportunity to add
further value to those assemblies through, for example, software. But it would be
foolish for a developing country to believe that it can utilize its labor cost advan-
tage for the creation of an automotive industry, or any other industry far beyond
the threshold of product and production simplicity. Opportunities in the service
sectors that are labor-intensive in developed countries also should not be over-
looked. For example, care of the world's increasingly large number of aged-
care that cannot easily be supplied by relying only on technology-could be
among several potential niches for developing countries. The production of cus-
tom-made, labor-intensive artifacts will remain a niche for a long time, but be-
cause of the growing saturation of consumer markets, this is not an activity that
can offer employment to large numbers of workers unless it is coupled with ways
to add further value to the artifacts. In short, a systematic approach is needed in
order to find and exploit areas of opportunity.
CONCLUSIONS
More than ever before, the survival and progress of nations and their citizens
depend on their abilities to generate and utilize knowledge. For developing coun-
tries, economic and social advancement will be achieved by learning to tap the
global system for the generation and transmission of knowledge and to develop
effective mechanisms for transferring knowledge into action. This process should
not be a one-way street, however. Global networks also can unlock and distribute
the knowledge that the developing countries possess and that the rest of the world
needs-embedded, for example, in the genes of their plants and animals or asso-
ciated with time-tested healing practices. One of the most important elements of
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GEORGE BUGLIARELLO
81
knowledge for developing and developed countries alike is gained through shar-
ing and comparing their experiences successful or not with technological,
economic, and social development.
The best hope, then, of narrowing the gap between the developing countries
and the more developed countries is a knowledge strategy. Such a strategy will
enable a developing country to bypass steps in the development of technological
systems that historically have had a long gestation from telecommunications
and transportation to medical services and the applications of genetic engineer-
ing. But the benefits of not having to repeat the entire learning curve for many
technologies will be illusory if a developing county does not create the appropr~-
ate infrastructure to use knowledge effectively and to participate in the generation
of new knowledge.
Obviously, each developing country must define the knowledge strategy that
best suits its needs. The greatest challenge to the developing countries will lie in
developing a new kind of sociotechnological knowledge that will enable them to
advance without following the unsustainable model of today's industrial nations.
The problem, of course, is that most developing countries are poorly equipped to
develop and apply this new knowledge. Thus they need to work imaginatively, in
close collaboration with international institutions and with developed countnes,
which by now have acquired a broader perspective on their own development and
its impacts.
In formulating their strategies, developing countries also must consider how
they can position themselves with respect to the simplicity threshold, how they
can define the most desirable proportion among the different factors of produc-
tion, how they can best meld indigenous creativity and innovation with the import
of products and ideas, and how they can balance technological advances with
social health-all of which will spell the difference for a developing country
between success and inability to take off. And across the globe, a pivotal element
of any knowledge strategy must be stronger national knowledge infrastructures
and their global integration. The time has come to determine how this will be
achieved.
NOTES
1. Brian Hayes, "The World Wide Web,"American Scientist 82 (September-October 1994): 82.
2. See, for example, Andrew Wheatcroft, The Ottomans (London: Viking/Penguin, 1993).
3. George Basalla, W. Coleman, and R. H. Cargon, eds., Victorian Science (Garden City, N.Y.:
Anchor Books, 1970).
4. George Bugliarello, "Toward Hyperintelligence," Knowledge: Creation, Diffusion, Utiliza-
tion 10 (September 1988): 67-89.
5. John Hale, The Civilization of the Renaissance in Europe (New York: Atheneum, 1994).
6. See, for example, Jorge Niosi et al., "National Systems of Innovation: In Search of a Work-
able Concept," Technology in Society 15 (1993): 207-227; and Nachoem M. Wijnberg, "National
Systems of Lnnovation: Selection Environments and Selection Processes," Technology in Society 16
(1994): 313-320.
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7. See, for example, Edward Wenk, Jr., Making Waves Engineering, Politics, and the Social
Management of Technology (Urbana: University of Illinois Press, 1995), 11.
8. Amity Shlaes, "Germany's Chained Economy," Foreign Affairs 73 (September-October
1994): 109-124.
9. Robert W. Rycroft and Don E. Kash, "Technology Policy in a Complex World," Technology
in Society 16 (1994): 243-267.
10. Wade Roush, "Population: The View from Cairo," Science, August 26, 1994, 1 164-1 167.
11. Nathaniel C. Nash, "Latin Economic Speedup Leaves Poor in the Dust," New York Times,
September 7, 1994, 1, 14.
12. George Bugliarello, "Technology Transfer: A Socio-Technological Paradigm," in Develop-
ment and Transfer of Industrial Technology, ed. O. C. C. Lin, C. T. Shih, and J. C. Yang (Amsterdam:
Elsevier Science, 1994).
Representative terms from entire chapter:
george bugliarello
