Part 3: The policy dimension

Part 3 looks at the range of policies being used and advocated with regard to science and technology. In chapter 10, Atul Wad offers an assessment of the field of science and technology policy - a policy comprised of collective measures taken by a government in order, on the one hand, to encourage the development of scientific and technical research and, on the other, to exploit the results of this research to achieve desired general social, economic, and political objectives and its application in the context of a dramatically changing world order characterized by a host of pressing challenges, rapid technological change, and globalization. Its importance to developing countries has, if anything, increased. He explains the rationale for science and technology policy, its historical evolution conceptually (stressing the distinctions between science policy and technology policy) and in practical terms- reviewing the range of specific policy instruments and concludes with a description of the shortcomings of science and technology policy to date: it has produced elaborate, often overly bureaucratic, systems of science and technology in many developing countries but has had little impact on the "bottom line" of real technical change and technology decision-making at the level of the enterprise. To illustrate his analysis and the wide variety of approaches to science and technology policy, he reviews the experiences of various countries and regions, traces the role of the United Nations system in this field, and concludes that, for science and technology policy, the key contemporary issues centre around concerns over the use of technology to achieve competitive advantage, access to technology. new forms of government intervention to promote technological development at the firm level and greater participation in world markets - and all of this within the new principles of an emerging techno-economic paradigm.

Amitav Rath examines one important policy dimension: technology transfer and diffusion. He starts by describing the main elements and mechanisms of technology transfer, vertical and horizontal, and concludes that all of the channels are valuable and developing country strategies must ensure that the full mix of channels and mechanisms are used optimally; he points out that the dominant mechanism for technology flows is in the form of capital goods. In tracing the historical background, the author distinguishes two phases where twin economic and political objectives have influenced the concerns of research and policy related to technology transfer, sometimes reinforcing each other and at other times being antagonistic: post-war to the mid-1960s, and mid-1960s to the early 1980s. The main concern in the 1970s was the excessive costs of technology transactions and the many restrictive clauses that were imposed on the recipient by the supplier, thereby limiting the benefits to the recipient firm and country. Besides the implication of market imperfections, other negative impacts from technology transfer were stressed: dependency, inappropriateness, etc.

By the beginning of the 1980s, most developing countries had enacted regulatory mechanisms and rules governing investments and technology. Revisions to the framework, under the pressure of the changing international economic, technological, and policy environments for technology transfer, highlighted several aspects: transaction costs and terms, variations in technological elements and price, and new perceptions of the actors. The greater the involvement of the supplier and the recipient, the more successful is the technology transfer. Production efficiency is highly correlated with the macroeconomic policies and market structures of the recipient country. To conclude, Amitav Rath argues that excessive politicization of the issues has definitely been harmful to the interests of developing countries.

This recent technology debate has brought out into the open a dilemma facing developing countries: what mix of new, conventional, and traditional technologies should they use, and what is the appropriate balance between importing new technologies and using conventional and indigenous ones? Ajit Bhalla addresses technology choice as a crucial dimension of the development process that evolved in relation to shifts in development thinking. In the 1950s and 1960s, the issue of technology choice was secondary to that of maximizing growth. The recommended option invariably favoured the most capital-intensive and advanced technology because it contributed to maximizing savings rates and investment. In the 1970s, the criterion for choosing technology was no longer solely the reinvestible surplus of growth; the employment and income generated, the reduction of inequalities, and output generation were also important factors. The 1970s also witnessed the emergence of the concept of appropriate technology. Its protagonists highlighted the need to widen the set of technological options by developing alternative technologies in a labour-intensive direction to suit the factor endowments of developing countries. The decade of the 1980s is associated with the macroeconomics and political economy of technology decisions, intersectoral linkages to promote technology improvements and reduce technology gaps between modern and informal sectors, and the emergence of new technologies and blending. The author discusses the sparse employment and distributional implications of new technologies, the potentials for developing countries for leap-frogging and technology blending, and whether the use of new technologies and greater scope for "flexible specialization" can improve the efficiency of craft production and thus expand output as well as employment. By highlighting the differences between the debates on the concepts of "appropriate technology" and of "technology blending," Bhalla points to the emergence of a new debate, technological capability-building as a major long-term goal of development of the third world, and speculates on the issues for the 1990s.

Paulo Rodrigues Pereira discusses the breakthroughs in new technologies and assesses the opportunities and threats they represent for developing countries under the new techno-economic paradigm, as defined by Freeman and Perez, where technological development is increasingly becoming the dominant factor in determining a country's capacity to compete in world markets. Information technology allows a new technological system, in which far-reaching changes in the trajectories of electronic, computer, and telecommunication technologies converge and offer a range of new technological options to virtually all branches of the economy; moreover, this new system forms the basis for a reorganization of industrial society and the core of the emerging techno-economic paradigm. The reason for the preeminence of the new technological system clustered around information technology over the equally new technological systems clustered around biotechnology and new materials is the fact that information activities of one kind or another make up a part of every activity within an industrial or commercial sector, as well as in our working and domestic lives. Almost all productive activities have a high information intensity, so information technology is capable of offering strategic improvements in productivity and competitiveness, by integration of functions, of virtually any economic and social activity. In assessing the implications for developing countries, the author concludes that the general tendency points to a widening of the information technology gap, both between industrialized and developing countries and within developing countries. Biotechnology, a science-led technology, induces important structural changes in the economy and has widespread applications in different industrial sectors: food and agricultural production, livestock husbandry and animal health, pharmaceuticals and chemical processing, medical treatment. One of the main advantages of these innovations in biotechnology has been the possibility of their economic use on a small scale, without large infrastructure requirements, and their application at different levels of complexity, investment, and effort. However, these opportunities should be weighed against the environmental risks and the interrelated social and economic costs. As regards new and advanced materials, the main impact of the present trends is likely to be felt by developing countries in the medium term, through the loss of competitive power of many of their manufactured products, which will increasingly have to compete with innovative products presenting higher functional integration or offering novel functions and services, manufactured by "multi-material" firms in industrialized countries. But the potential does exist for developing countries to produce materials with the higher purity necessary for high technology industries and it should be exploited.

Under the new techno-economic paradigm where technological innovation is the driving force, assessing its impacts is crucial. For Harvey Brooks, whereas in the industrialized countries, technology assessment is viewed predominantly in the context of anticipating and avoiding unintended social costs of economic growth and of technologies as their scale of application increases and spreads, in developing countries it is seen more as a means of building up an indigenous capability for wise technology choice. The costs and benefits they generate can potentially be large, and their incidence may differ significantly for different groups in society. Hence there is need for analysis so that the mismatches, the wrong investments, and the possible social conflicts can be minimized, while at the same time the beneficial effects and opportunities can be fully exploited. In this context, the issue of technology assessment is viewed as a continuing process of informing the people concerned, generating constructive public debate, and encouraging public understanding and involvement. In his chapter, Brooks first reviews the historical background of the concept and then draws lessons from over 20 years of institutionalization of technology assessment in the United States to derive a typology. project assessment, generic technology assessment, problem assessment, policy assessment, global problématique. Brooks concludes that if technology assessment is seen as a cumulative process of "social learning," it calls for very wide participation of virtually all the stakeholders. Drawing on the experience in industrialized countries with stakeholder participation in technology assessment, he derives principles that can contribute to the success of stakeholder dialogues in developing countries.