Transcript SMEs and Technology Transfer in Nepal

SMEs AND TECHNOLOGY
TRANSFER IN NEPAL
Prof. Dr. Dilip Subba
Secretary
Nepal Academy of Science and Technology
Nepal
Presentation Sequence
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About the country
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Industrial development
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Classification of industry
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Policies
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Technology transfer in Nepalese SMEs
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Modality of technology transfer
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Status of technology transfer
Presentation …
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Organizations involved in technology
transfer and development
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Constraints
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Conclusion
The Country
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Landlocked country, situated between
China to the north and India to the east,
west and south.
Total area 147,181 sq. km
Altitudes ranging from less than 100
meters in the south to the highest peak of
the world 8848 meters Mount Everest in
the north
Ecological Regions
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Mountain region ( >3000m , 35% of
the total area and 7.5% of the
population living)
Hill Region ( 42.0% of the total area
and 44.5% of the people living)
Terai Region (southern part of the
country , 23% of the total area and
48% of the population living)
Administrative Structure
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5 Developmental Regions : Eastern,
Central, Western, Mid-western and Farwestern
Further divided into 14 zones and 75
districts
Lower administrative units : Village
Development Committees (VDCs) and
Municipalities
3195 VDCs and 58 municipalities
Economic Indicators
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Developing economy: transferring from
rural to urban and traditional to modern
market oriented
Predominantly agricultural country,
about 80 percent populations deriving
their livelihood from this sector and the
main source of gross domestic
production (about 40%)
Economic …
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Planned development efforts for five decades
All development plan’s overriding objective:
poverty reduction
Approximately over 30% of the population
living below the poverty line
Irrigated land: 30%
Per capita income : 322 USD
Other Features
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Total population : 24.2 million
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Official language : Nepali
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Majority (about 80%) of population Hindu
and second largest group Buddhist (about
11%)
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Average life expectancy at birth: 63 years
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Literacy rate : 54.1 percent
Industrial Development in Nepal
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Industrialisation in modern Nepal began
only after 1951, however, it dates back to
1936 with the establishment of Biratnagar
Jute Mill
Nepal’s industrial sector characterised by a
large number of small establishments,
highly dispersed geographically, dwelling
between formal and informal sectors of the
economy
Classification of Industry
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Large industries: industries with fixed assets of more
than 100 million Nepali rupees (NRs)
Medium industries: industries with fixed assets
between 30 million rupees to 100 million NRs
Small industries: industries with fixed assets up to an
amount of 30 million NRs
Cottage industries: traditional industries utilising
specific (indigenous) skills or local raw materials and
resources, labour-intensive and are based on
national tradition, art and culture and industries with
fixed assets up to 200,000 NRs
Approximately NRs 68 = 1 USD
Policies
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Initiation of integration of technology policy
and development planning in 1980
Objectives of Industrial Policy being promote
export and develop import substituting
industries
Offer of an array of incentives (concessional
import duties, tariffs, tax exemptions etc) to
boost industrial growth
Attract Foreign Direct Investment
Technology Transfer in Nepalese
SMEs
Foreign Investment and Technology Transfer Act, 1992
The Act defines technology transfer as any transfer of
technology to be made under an agreement between an
industry and a foreign investor on the following matters:
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Use of any technological right, specialization, formula,
process, patent or technical know-how of foreign
origin;
Use of any trademark of foreign ownership;
Acquiring any foreign technical, consultancy,
management and marketing service
Technology Transfer……
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Facilities and concessions provided to foreign
investors:
Except for the projects listed in the negative list, 100
percent equity participation by foreigners is allowed
in almost all sectors. The industries listed in negative
list are cottage industries
Technology transfer is allowed even in projects where
foreign investment is not allowed
Firms established with foreign participation are
treated equally as 100 percent
Nepalese-owned firms
Technology Transfer…
Facilities and concessions…
 Interest paid on loans obtained from foreign source is
tax free
 Income from royalty and technical management services
is levied a standard tax rate of 15 percent
 Residential and business visa is provided for foreign
investors and their dependents
 Non-nationalization of industry is assured
 Provision of dispute settlement between the contracting
parties;
 Expatriate employees in firms with foreign equity can
take back up to 75 percent of their salary income abroad
Modality of Technology Transfer
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The most commonly used modalities:
FDI via joint ventures, technical
collaboration, import of machinery and
equipment, technical assistance through
human assistance
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Other mechanisms -- through license,
exchange patents, or a know-how
agreement, personal contact etc.
Status of Technology Transfer
Number of projects with foreign collaboration
No. of projects approved
250
200
150
100
50
U
pt
o
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
19
90
0
Status…
Scale of projects with foreign collaboration
1151
1200
Numbers
1000
800
600
400
146
199
200
0
Large
Medium
Industry category
Small
Status…
Category of projects with foreign collaboration
Energy-based
3%
Agro-based
3%
Construction
4% Mineral-based
1%
Manufacturing
89%
Status…
Status of foreign investment projects
Closed
1%
Cancelled
5%
Operational
27%
Approved
42%
Licensed
8%
Under
construction
17%
Organisations involved in
technology transfer and
development
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Ministry of Environment, Science and
Technology (Estd. 1995)
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Apex government body for S & T
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Development and implementation of
S & T policy
Organizations…
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Nepal Academy of Science and
Technology (NAST)(Estd. 1982)
Some of NAST's technological collaborative
projects include:
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Solar photo-voltaic water pumping and
lighting system
Biomass briquetting technology
Natural current river boat
Organisations …
Research Centre for Applied Science and Technology (RECAST)
Some of the Centre’s work in S&T include:
 Energy sector: solar drying, bio-mass, bio-fuel, improved cooking
stove, water turbines
 Low cost housing
 Natural dye, etc.
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Other organizations:
Nepal Agricultural Research Council (NARC)
Technology Transfer and Development Project
Department of cottage and small industries
Non-government organizations
Constraints
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Private sector lacks co-operation and support
from different government agencies.
Government blamed for not providing
industrial facilities
Lack and anomaly of raw materials, short
supply of electric power, lack of auxiliary
facilities
Lack of working capital, lack of specialized
technical manpower, small domestic market
Constraints
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No institution to collect information on advanced
technology, monitor technology transfer and
provide advice on technology transfer. Learning
tendency and mechanisms are weak
Technology transfer obsessed with hardware
part only
Lack of modernisation, dynamism and
innovation in industrial sector
No coordinated action between academia and
industry
Conclusion
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Slow transformation to a higher technology level
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Foreign direct investment not very encouraging
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Creation of a strong link between universities or
research centres and industry is must
Role of industrial consultancy should not be
underemphasized
Need to create conducive environment for
industrial development and technology transfer
Development of innovation and industry clusters