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close this bookIndustrial Metabolism: Restructuring for Sustainable Development (UNU, 1994, 376 pages)
close this folderPart 3: Further implications
close this folder13. Transfer of clean(er) technologies to developing countries
View the document(introduction...)
View the documentIntroduction
View the documentSustainable development
View the documentEnvironmentally sound technology, clean(er) technology
View the documentIndustrial metabolism
View the documentKnowledge and technology transfer
View the documentEndogenous capacity
View the documentCrucial elements of endogenous capacity-building
View the documentInternational cooperation for clean(er) technologies
View the documentConclusions
View the documentTwo case-studies
View the documentReferences
View the documentBibliography

Knowledge and technology transfer

Knowledge must be holistic or integral to be useful for sustainable development. Knowledge has many facets, such as science, technology, management, organization, etc.

History shows cases where countries - such as France - had a long tradition of scientific excellence without, until recently, technological prowess. The reverse situation - as in the case of Japan - can also be found.

For developing countries, Enos' perception may be relevant: A technically competent nation has to climb through many rungs of the competence ladder.... Its rungs represent accomplishments; the lower, the simpler and more easily attained; the upper, the more complex, attained with more difficulty.... The highest rung represents ... a society which, having achieved it, is then capable of choosing, utilising and advancing any appropriate technique. (Enos, 1991)

Technologies carry with them a set of built-in decisions that reflect markets, level of economic development, attitudes, directions, and policies that emanate from their place of origin. When they are transferred to another country they tend implicitly to transfer the values attached to them. Consequently, when clean(er) technology is to be transferred from one place to another, there are at least two key issues to consider.

The first is the effectiveness of the transfer, i.e. the fitting of the built-in socio-economic options of the source country or organization to the conditions prevailing in the receiving country or organization.

The second is the efficiency of the process, i.e. the extent of absorption by the receiving end of the essential skills and knowledge - a feature of capacity of the transferred technology.

This is why sustainable development requires from the developing countries the creation of an array of competences that support an ploitation and environmental pollution (and even in lower running costs).

Although wastes constitute an environmental issue, they may not have a sufficiently high market value to warrant further processing. autonomous decision-making capacity for transfer or development of clean(er) technology.

Years ago, at a conference on petrochemicals in Brazil, I was confronted with a statement by a representative of a transnational corporation. He said that technology was not really worth discussing because it was not a major cost element: it made up, at the most, 5 per cent of the sales price of typical petrochemicals. The statement was factually correct but it hid an important dimension - related to the efficiency concept described above - which entirely justified the discussion. The point can be illustrated with the help of a simple equation that defines the perceived value of technology (Trindade, 1980):

P* = $o/Q

where P* is the perceived value of knowledge; $, is the going (commercial) value of knowledge; and Q is a cumulative measure of competence, skills, and endogenous capacity.

The graphic representation of the argument clearly communicates the idea that the perceived value of technology depends on the cumulative skills of the buyer and the seller of technology (fig. 1). For a given technology the resulting curve is a hyperbola, asymptotic to both axes. The range of interest for the present argument is Q within 0.0 and 1.0.

The above equation is simply a convenient way of arguing the importance of the different value perceptions of the buyer and seller of technology, which depend on their respective cumulative knowledge. For a given clean technology it is possible to move down the slide of the curve. The perceived value of an increment of knowledge or technology declines as an organization learns over a period of time, i.e. increases its level of competence, skills, and endogenous capacity.

The intuitive argument above suggests that if a society or an organization is at a level of competence equivalent to Q close to zero, not even all the money in the world would make a difference in the short term. It would thus be useless to promote the idea of industrial metabolism on a global scale if the majority of countries lacked the capability to implement it.

That is another way of saying that the perceived value of knowledge to a society (or a given stakeholder) can be very large for those who have limited knowledge (as Q approaches zero, P* tends toward infinity). Buyers in this situation, however, are ill equipped to make choices about clean(er) technologies and have limited bargaining power. Consequently, the wide difference in value perception may lead to disagreement between the transferring parties.

Fig. 1 The value of technology depends on the skills of the buyer

By contrast, when the recipient (a particular stakeholder) is at the "state-of-the-art" level, the perceived value of knowledge equals the commercial value (for Q = 1.0, P* = $0). In this case buyers are competent choosers and have strong bargaining power; little disagreement will arise between the transferring parties.

Concretely, for a given technology, it is possible to increase knowledge, that is, to decrease perceived value along the curve (as Q increases, P* decreases). This argument applies particularly to the transfer of clean(er) technologies to developing countries, as they require a higher level of cumulative knowledge.

It is also important to note that knowledge that is not used can be lost to a society. The historical loss of traditional technologies (e.g. iron-making in Africa) illustrates the point. Some of these technologies have been cleaner than the "modern" technologies that replaced them.

Today, even if clean(er) technologies were given away free of charge, the majority of the developing countries could not make use of them because of lack of absorptive and implementation capacities. Clean(er) technologies can only be effectively utilized when the recipient (country or corporation) possesses an endogenous decision-making capability. When such "endogenous capacity" is lacking, progress in handling environmental issues (at country or corporation level) requires the building of competence in relevant fields through experience, training, and education (UN, 1989).