As the fervor of nationalism in the newly independent colonies died down without yielding the promised rapid economic and social development, there was a scampering for alternative explanations. The tendency was to place the blame squarely on the external environment as the young nations and their leaders continued to exploit the legacy of colonialism to evade their own responsibilities and failures. Thus, through the sixties and seventies, transfer of technology, import substitution, self-reliance, the North-South dialogue and various other such areas that concentrated on blaming the lack of progress on factors other than domestic policy failures were in vogue. Such thinking ignored the fact that developing economies allowed all manner of institution to decline, encouraged waste, inefficiency and rentseeking, maintained inconsistent economic policies, incurred exorbitant defence expenditures, and virtually allowed their human capital to decline, especially if quality considerations are borne in mind. Somehow, in this environment of social, political and economic decline, transfer of technology would allow the forces of economic development to be unleashed.

Experience, however, proved otherwise and by the end of the seventies, observers had begun to record that "what seemed at first to be technological obstacles to development frequently turn out on closer examination to have been policy failures".

Since this subject was in vogue, considerable technological as well as political changes have taken place in the light of which perhaps the issue ought to be re-examined. For example while the growth of electronics, telecommunication and computers has revolutionized our notion of technology, the demise of communism as an extant political system has changed our attitudes to the functioning of the economy and the role of the government in the economy.

What is Technology?

The earlier debate tended to have a linear notion of technology and economic systems. Economists such as Rostow had established a linear model of economic development where to achieve the status of a developed nation, countries would have to go through various stages. Each stage represents a move to a higher level of technology such as moving from an agrarian society to one based on light industry and then to an economy based on heavy industry. To move from one stage to another technology had to be transferred from those at a higher stage to those at a lower stage. In this world view, the dependance of those at a lower stage on those at a higher stage is cause for concern and the birth of areas such as the transfer of technology. Moreover, the definition of technology was in a sense hardware-dependant and humans were given the mere role of installing and running machines.

The earlier linearity of the development process as well as techniques of production were also in some sense challenged by the development of the human capital theory. Studies that attempted to identify sources of growth attributed a strong role to technological innovation and/or managerial efficiency. Related work showed that education was an important factor that affected the growth of developing economies.

Before beginning to define technology let us look at current trends in the area of product development and production. These are: a. Innovation, today is more rapid, resulting in technology and processes that is more widely applicable. b. Shorter life cycles, greater emphasis on quality, and more flexibility in response to consumer needs characterizes industry today. c. Increased automation resulting in a smaller role for unskilled labor. d. A strong emphasis is laid on quality products and quality management.

In light of these characteristics of technology, a more modern definition of technology which shall be used for the purpose of this paper is that technology is the knowledge, procedural methods, and organizational modes used to transform inputs into high value added, marketed outputs. Such a definition stresses knowledge, organizational modes, and methods, more than hardware. The focus of technology is therefore moved away from physical objects. In fact, looked at in this manner technology is that which is embodied in people and their institutions, and the management capability of those institutions. The acquisition of technological capability is, therefore, more a matter of building up skills and institutions.

In the final analysis, what defines the growth potential of an economy is its ability to develop final marketed outputs that have a high value added component. This has to take place in a very highly competitive world where technological as well as design innovation is taking place at a fast pace. To retain competitiveness in such a world, flexible but decisive management, innovative design capability, and professional and aggressive marketing capacity are likely to be vital. Such a view of technology perhaps places the onus of technology transfer on domestic policy more than on international or external impediments. Policy for technology transfer may therefore be defined as the development of institutions that affect how the economy acquires technology from overseas, diffuses and uses such technology rapidly, with a continuous effort at improving and developing the acquired technology.

Technology transfer and foreign investment

The issues of transfer of technology and foreign investment are inextricably linked. Multinationals, or large foreign firms are investing very large proportions of their resources for the development of new products, technologies and processes. In recent times, brand names have come to be identified with important and desirable characteristics such as quality and reliability. In some products, the technology is tied into the acquisition of the right to the brand name. Such products, technologies and processes may be proprietary in nature. For the import of such proprietary technology, joint ventures may be required. If the country profile in international markets is attractive enough, multinationals will look favorably on such joint-venture deals with the domestic private sector.

When a firm enters a developing country to introduce a new product or to manufacture some commodity, it will wish to bring in all that will enchance its profitability, including technical knowledge. However, in order to do so it must be able to rely on the availability of cheap domestic technical skills of quality. The issue of transfer of technology is tied in with the desire to attract foreign direct investment. But a key link may the development of domestic human skills in the domestic economy to which we now turn.

The need for human capital development

The definition of technology that is proposed here depends less on machines and more on humans. In this view, management and innovation are considered to be the key ingredients for the success of a business enterprise. With this emphasis on the aspect of human ingenuity, an important element in any policy or desire for economic progress in general, or transfer of technology in particular, would be a strong emphasis on human capital development. At a general level, human capital refers to the improvement of the quality of manpower in the economy. It is the investment in human beings to make them more productive. Consequently, it incorporates all that goes towards making more efficient individuals of the average citizenry. It is, therefore, more than just the attainment of literacy. Elements of health and longevity are also elements of human capital for they affect productivity.

Given the rapidly changing world as signified by the increased pace of innovation, the definition of human capital has to be adapted accordingly. In such an environment, flexibility, adaptability, discipline, and innovation, both in management and labor, is required. This places greater emphasis on quality of human capital than ever before. In order to promote human capital development of the sort we need today, policy mus follow the following guidelines

i. Emphasize quality rather than quantity: Traditionally, in this area, emphasis has been laid on the spread of literacy. But the dictates of the current global economic competition would imply a broader definition of a policy on human capital accumulation. It would appear from the arguments presented above that quality considerations in education at all levels will be an important element of any education policy. Historically, most developing countries have emphasized quantity. Thus, we have a large number of universities and research institutes and add to these numbers at a very rapid rate. Yet any evaluation of such institutions reveals an almost total absence of quality consciousness. Fewer institutions that emphasize and demand quality education and research would pay higher dividends.

ii. Quality higher education: In the scramble for numbers such as widespread literacy, high school attendance and numbers of graduates, that are dictated by planners, education bureaucracies have allowed quality to be sacrificed. This has perhaps been most marked at the level of institutions of higher learning. The liberal sentiment is also to argue for more resources to be directed towards literacy and primary education. This absolute equalitarian argument has also helped in the deterioration of quality higher education. However, an argument can be made that improvements in the quality of education at the university level perhaps would permeate downwards to improvements in the quality of education at lower levels. After all university graduates are the ones to impart education at lower levels. This argument would reinforce the need to achieve quality in academic institutions without worrying about numbers.

iii. Basic research: Most large corporations are plowing back large portions of earnings into research. Japan and the Asian tigers too are attempting to develop indigenous research and development potential. Developing countries will also have to develop this potential. However, the policies that are currently being pursued have to be altered. Merely the creation of an organization with an acronym, and an officialdom and a rigid hierarchy, emphasizing age rather than capability, and some trappings of donor funding cannot generate research potential. This method for creating such institutions that we are currently employing, only creates a budgetary line item either today or tomorrow. Research and research potential is the product of individuals capable of quality research. Once again policy should emphasize fewer institutions that are flexibly and academically managed and emphasize quality research.

No discussion of economic development or transfer of technology would be complete without emphasizing the role of human capital development. Without a strong emphasis on the quality of education at every level the foundation for inducing foreign investment and technology transfer will remain weak. In most developing countries, the drive for quantity has led to a sacrifice of quality. There is an urgent need to reinvigorate the university system and various research establishments in these countries such that a quality product is encouraged. If necessary, we should even merge some of these institutions to concentrate resources for better quality.

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