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is little scope for acquiring technology besides importing technology either by importing foreign technologies through licensing and imports of machinery and capital goods, or from foreign parent companies through their FDI; the latter is discussed in chapter Licensing
of existing technologies, both rights to proprietary equipment and details about production processes, offers African countries opportunities for improving their levels of best practice. However, there is evidence that licensing is decreasing as an option for closing the technology gap. As shown in figure 5.3, the use of licensing technology as a channel for technology transfer is not very prevalent among firms in African countries. The most direct relation between trade and technology transfer lies in the direct imports of machinery goods.
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Chapter 6 discusses the pattern of machinery imports among firms participating in the WBAATI survey.
Drivers Behind Transfers of Skills and TechnologyWe focus on two mechanisms that facilitate cross-border transfers of skills and technology adherence to international technical standards and the movement of professionals.
Adherence to Standards as a Method for Technology TransferWith most incremental improvements in products and processes, manufacturers follow existing industry production standards. This can lower production costs and facilitate the exchange of information (as discussed earlier. At the same time, an effort to meet foreign standards can trigger transfers of technology from overseas partners to firms operating in Africa.
Evidence from the business case studies shows that when technical assistance is received by firms operating in Africa to meet technical standards required for them to export into higher
positions in the value chain, the results are often positive. One example is an Indian-owned food processing firm in Tanzania (see box 5.13). Of course, simple importation of capital goods alone does not necessarily lead to an appropriate use of the machinery because it requires transfers of tacit knowledge. Nevertheless, it is difficult to learn new technologies through these mechanisms. The way that developing countries are learning new technologies more effectively is through their participation in
the global production networks, as discussed in chapter 6.
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