5. TECHNOLOGY TRANSFER IN THE CONTEXT OF THE CDM
5.4 T HE FOUR DIMENSIONS OF TECHNOLOGY
Kristiansen (1993) studied several technology transfers from Norway to countries in Africa and Latin-America. He assessed the degree of knowledge transfer through observation and interviews of the participants in the technology transfer projects. His assessment will be useful for my case study of the three wind power companies in chapter 8. In his study he presents how technology can be
characterized in a sector; there are two dimensions: modernity and depth. The former looks at development and continuous innovation and improvement of technology, while the latter is divided into four layers and is used to determine the level of knowledge and capacity in the sector. These four layers will be used further on in this thesis to assess the different wind power companies’ technology capacity. They are represented in figure 3 which is based on Kristiansen (1993).
Figure 3. Technology dimensions in a sector
The understanding of the modernity dimension is based on technological development in industrialized countries. In these countries there is a constant evolution of technology driven by competition and profit demands with the result
that older technology is replaced by new technology. This leads to an overall growth in productivity and improved competitive conditions for the sector in question (Kristiansen 1993).
The CDM is looked upon as a tool for replacing the old with the new (and more environmentally sound) in developing countries (UNFCCC 2009). It is worth noting that Jänicke and Jacob (2005) define modernization in the same way as Kristiansen.
In figure 3, the depth dimension is divided in four stages, which ascend from right to left. When a sector moves up the modernity axis, it also expands its
“depth” i.e., knowledge and capacity. Acquisition is the first and shallowest stage; here the sector has just gotten access to a new type of technology
(Kristiansen 1993) or it has introduced an innovation developed within the sector (Jänicke and Jacob 2005). In the context of a developing country, Kristiansen characterizes the local knowledge and capacity in the acquisition stage as
superficial and not sufficient enough to start up production led and understood by the local labor resources. The pertinent example is a transnational company which sets up a factory in a developing country where the production equipment and organizational system is transferred entirely. The production itself is
dependent on foreign experts from the mother corporation. Kristiansen does not see this as a full-value technology transfer.
The next stage, and a deeper step up the technological modernity axis, is know-how. This is where the sector moves beyond blueprints, manuals, and hardware – i.e., explicit knowledge – and starts gaining tacit knowledge. By this time in the developing country, the sector should have gained enough insight into the
technology to know how the production is supposed to flow. The workers should be able to do the routines established to keep production going, and also know how to perform regular maintenance tasks. It is impossible to guarantee that the transfer of tacit knowledge will happen and it is equally difficult to verify that it
has happened. But by participating in installation, operation and maintenance of the hardware there is a possibility that the workers will gain know-how.
The third tier is know-why and the term indicates that the recipient of technology possesses knowledge about the underlying conditions for production. It is crucial that the recipient, here the single firm, is given enough training to fully
understand how the technical equipment functions. The goal is to move beyond know-how on to what to do when the equipment functions properly, and to a level where the recipient can make repairs, adjustments and improvements on the equipment, as well as on the organizational and administrative level of the
production process. The know-why stage entails a larger share of production stimulating local economic growth. In addition, the degree of dependency on external technology suppliers is less than in the former stage.
The fourth and final stage is know-how-to-do-it. At this stage the sector has gained a combination of expertise and range so it can deliver important technical components and non-routine services to the production process. The knowledge base in the sector is wide and deep enough so that the country itself can draw advantages from linkages formed around an industrial sector. This means that the production in, for example, the wind turbine sector can advance because there is a demand for turbines in the wind power sector. The demand can give the wind turbine sector a competitive advantage locally, as well as internationally.
Kristiansen (1993) states this as the primary goal for industrial development in developing countries: nurturing some sectors so they can become players on the international market and contribute to the export profits of the country.
Nevertheless, it is not given that technology transfer will always lead to the know-how-to-do-it stage, according to Kristiansen. In some cases it just might be the transferee’s intention to provide acquisition type of technology and training, and the same might be true for the recipient.
This is referred to as technology control. During the Cold War it was a well known fact that Western countries were skeptical of transferring technology to
developing countries that were in favor of Communism. The West feared that this technology would be deployed to the USSR and used against them (Chatterji 1990). After the Cold War these restrictions disappeared, and businesses today are motivated by expectations of profits in a truly global market. Even so, developed country firms want to keep control over the use of the transferred technology. Technology control is often defended on the grounds that hardware and knowledge will be sold by the recipient firm to other businesses and markets.
Controlling the spread of technology in developing countries is often a part of the negotiations between senders of technology and recipients. Firms in developing countries and their governments, i.e., the recipients, want to secure the right to use transferred technology on a larger basis as a part of a modernization strategy (Aasen et al. 1990). Recently, technology control has also been linked to
intellectual property rights (IPRs)22. Industrialized countries patent technology in order to protect their innovations, while developing countries regard IPRs as a barrier to technology transfer.