Transcript Technology Transfer

Technology Transfer –
Challenges to Developing Countries like Sri Lanka
Vijaya Kumar
Chairman, Industrial Technology Institute
[email protected]
Importance of Technology
Schumpeterian Growth
Increase of human knowledge
Technological progress and changes in institutions
Lead to sustained growth of a nation
Real world per-capita GDP – effect of technology
Grew by 5% per century during 15/16th century
Average of 17.5% during 17th/18th century
By 248% in 19th century and 863% in 20th century
De Long, NBER Work Paper 7602, www.j-bradford-delong.net/TCEH/2000/TCEH_2(2000)
Wide variation in per-capita income
High income - Norway (>$ 68000), West, some oil states
Sri Lanka ($ 1400) – Lower middle income
Big variation after 18th century and latter 20th century
Exploitation of technology for development
Newly Industrialised Economies – Korea, Taiwan
Massive Investment in Science and Technology
Transformed Agricultural Economy to Industrial Economy
1980s – Development Model - many developing countries
Is this model relevant today after WTO ?
Import Substitution Industries impracticable
Protection of domestic industry, Subsidies - Controlled
Chaebols - “Crony capitalism”- Unacceptable
Autocratic rule, No strikes, Low wages - Unacceptable
Selective FDI - Most Favoured Nation Treatment
Changes in IPR regime – TRIPS, no process patents
Developed countries - tariff protection/subsidies
Sri Lanka and South Asia
India, Pakistan – Both low income, Sri Lanka low middle
GDP per capita of India, Pakistan $ 800 - $1000, SL $ 1400
Growth rates 2005-6: India 9%, Pakistan 7%, Sri Lanka 6%
% Industry in GDP – Around 28%
% High technology exports: Sri Lanka 1%, India %%
South East Asia
Singapore high, Malaysia Upper middle, Thai low middle
GDP per capita Malaysia $ 5.5k Singapore $ 30k, Thai $ 3k
Growth rate 2005-6: Malaysia, Thai 5%, Singapore 7.5%
% Industry in GDP: Around 46%
High tech. exports Thai 27%, Malaysia, Singapore 55%
South Asia – Restricted economy, Import substitution
Sri Lanka liberalised in 1980, others in the 90s
South East Asia – Liberalised economy
Sources of technology
Domestic production of technology
Strong National Innovation System
Human Resources, Expenditure on R & D (PERD)
West, Korea, Taiwan
Licensing of technology
Strong economy and strong private sector
Building of partnerships
Malaysia, Singapore
Foreign Direct Investment
Greenfield, Privatisation
Enabling environment – Infrastructure, Tax, large market
Stable economy
Technological learning, Spin offs
South East Asia – Industrial exports, high tech exports
National Innovation System in Sri Lanka
Human Resources in S & T
% of 17-24 age in Universities
Sri Lanka 4%, Pakistan 4, India 10, S. E Asia 28-44%
Undergraduate age high in Sri Lanka. Admissions low.
Quality of degree?
% GDP on Education:
Sri Lanka 2.1, Pak 2.3, India 3.7, S. E Asia 4.2- 7.4%.
New Pakistan programme-Increase investment by 1500%
Researchers in R & D per 1 million population
Sri Lanka 208, Pak, India 120-160, Thai/Mal 350-500 Korea
2400, Singapore 7000
Human resources for successful technology transfer ?
Research and Development
Gross Expenditure on R & D/GDP:
Sri Lanka 0.14, Pak-India 0.6-0.9%,Thai 0.24, Mal 0.7,
Singapore 2.2, Korea 2.6
Private Sector ERD/GDP (or Business ERD/GDP)
Sri Lanka 0.01, Pak 0.02, India 0.1, Thai 0.09 Malaysia 0.5,
Singapore 1.3, Korea 2.0
High Military expenditure – 4% of GDP
Domestic production of technology not facilitated
Low technology innovations, No defence research
Licensing of technology low
Private sector not strong enough
Foreign Direct Investment
Mainly privatisations, Greenfield FDI in telecom sector
Privatisations not very successful in technology transfer
Sri Lanka – Success stories (Resource intensive)
Hayleys – Haycarb and Dipped Products
Incorporated in 1970s – restricted economy period
Haycarb - 16% of world coconut shell activated carbon
USD $30m turnover, branches Thailand, Philippines
Dipped Products 5% world demand-rubber based gloves
270 versions, 60 categories–domestic, industrial &medical
USD $ 70 m turnover, manufacturing unit in Thailand
Factors in success
Incorporated before economic liberalisation
Uses Sri Lankan natural resources
Technology transfer
Initial purchase of technology, technology production
limited
Colombo Dockyard (technology intensive)
State enterprise - 1974 – ship repairs in Colombo Port
1977 - barges, tugs for local market, 1982 SL Navy
1983 Exported barges to Myanmar, 1987 ship to Maldives
Privatised 1983, 50% shares to Onomichi Dockyard 1993
Restructuring – heavy and offshore engineering
Quality Management System, Ships for India, Middle east
US $ 70 m turnover, unable to expand - space constraints
Factors in success
Partnership and technological learning from Onomichi
Onomichi Medium size shipbuilder needed expansion
Onomichi partnership improved access to export markets
Loadstar (Resource intensive)
20% of world solid tyre production
1982 – 20% export duty on raw rubber
Joint Venture with Belgian company
Key Belgian personnel - new company with Jinasenas
Pneumatic tyres and rubber wheels introduced
Technology
Technological learning at the beginning
Small research units in Sri Lanka and Belgium
Patent granted to Belgian partner
Success stories (Labour Intensive)
MAS Holdings, Brandix – Post economic liberalisation
Garment (intimate apparel, sportswear) manufacturer
Developed comprehensive supply chain in Sri Lanka
Family owned enterprises
Strategic partnerships with market leaders- past few years
Introduced its own brand of lingerie in India
US $ 750m turnover, 45,000 employees, 5 countries
Factors in success
Exploited Multi Fibre Agreement (MFA) - Garment Quota
Was already involved in textile/garment trade
Technological learning through strategic partnerships
Swimsuits
Beneficiary of FTA with India
Conclusions
Accepted attributes of NIS weak – Sri Lanka not likely to
be able to exploit S&T for economic growth.
SL firms have been able to innovate, contribute to growth
Very few successful firms from “liberalisation” era
MAS Holdings initially protected by MFA
Haycarb, Dipped Products, Dockyard pre-1978
Natural Resources based firms have succeeded
Technological learning from FDI – Onimichi, Loadstar
Rapid expansion of absorptive capacity needed –
increased human resources in S&T at PhD level
Build infrastructure for commercialization of research