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Emporium Current Essays 469 How to Root out Corruption Technological change affects productivity, the amount and composition of output, levels of employment, the skill profiles of the work force, the degree of competitiveness, and trade flows. In the longer terms, technological change has a bearing on cultural values, social relationship and configurations of political power. It is little wonder, then, that the dynamics of technological advance continue to attract increasing attention among scholars, decision-makers and practitioners in the laboratory or at the point of application. Despite the remarkable role of technology in the process of development, neo-classical economists have tended to take technological progress for granted. In their microeconomic analysis, the production function, which depicts all combinations of inputs for producing a given amount of output, is the locus of the firm's technological knowledge. Inventions and discoveries are generally considered as exogenous factors which create a pool or of readily available technology in the pubic domain from which firms can choose. Typically, the acquisition of knowledge and this analysis is viewed as costless, or at most incurs only a modest one-off expense in mastering the new technique. The element of tie is ordinarily de-emphasised by posting instantaneous acquisition of technology, the employment of which is divorced from the firm's past learning experiences. The firm compares the cost with prospective returns, both properly discourted, after weighting the probabilities of success of failure. In the late 1950s, the mainstream economies did become more appreciative of the role of technological change in the process of economic growth when it was found that accumulation of production factors (capital and labour) could explain only a fraction of actual growth. Among other elements in the unexplained "residual", technological dynamics was regarded as extremely important. During the late 1960s a number of development economists however began to sense that the very levels of abstraction and restrictiveness of the assumptions that had lent elegance and broad applicability to orthodox economics, were limiting the usefulness of orthodox economics in the understanding of technological change. These economists began treating technology transfer and technological innovation within a political economy context and an endogenous analytical variable that is a major element in determining economic growth an socio-economic development. It may be said that in the earlier period, the emphasis was very heavily, though not exclusively, on the transfer of technology rather than its internal generation in developing countries. A'.though some economists saw some room for expanding domestic innovations activities in the South the brunt of the discussion revolved around acquiring technology from abroad because there was little recognition of existing endogenous technological capability in the South. This perception, combined with the doctrine of comparative advantage, seemed to dictate against significant national R&D efforts.

But the thesis of technology transfer didn't work to the satisfaction of the beneficiary countries. There emerged a widespread belief that technologies developed in mature industrial countries fitted poorly with factor endowments, market sizes and basic needs of the masses in the third world, an outlook choosing more suitable techniques. Powerful multinationals companies were viewed as the chief means for transferring technology under market conditions allegedly rigged against buyers of technology. Multinations were accused* among other criticisms, of charging high prices for technology when the marginal cost to the for supplying already existing technology was zert> or very close, Another complaint levelled af multi-nationals was that technology was ofxea transferred as part of a package, or bundle thsjt tied technology to financial capital, managerial know-how and marketing capabilities, frequently with contractual provisions not advantageous to the purchaser. Although obtaining technology from abroad mil remains important to most developing countries, it is however now seen primarily as a means to accomplishing the more ultimate goal of accumulating internal technological capacity rather than an end itself. Now the emphasis has therefore, shifted to making technology transfer a positive stimulus for domestic technological dynamics. Large multinationals with h in developed countries are still important as transmitters of technology to developing countries, but alternative sources have proliferated. Today, small and mediumsized enterprises from developed countries are important channels of technology transfer to countries of the South. Smaller multinationals are also active. Furthermore, technology is no longer obtained from developed countries only but from other developing countries as well. Owing to the proliferation of sources from which technology can be secured, better bargaining skills by purchasing entities and the market trends towards global trade liberalisation, the current focus is on taking advantage of opportunities for complementing local TCB (Technological Capability Building) with technology obtained with investment flows or other credits for technology transfer. There has also be a growing consensus among development economists that nations that have taken prior action to upgrade their domestic science and technology base through establishing incentives and an economic atmosphere conducive to innovation, developing adequate level and categories of human resources and providing appropriate institutional, infrastructural and realservices support, are those now attracting more robust flows of technology and are able to endogeaize and extract more benefits from the imported technology. In many a country, it has been observed that consultants also play an important role in the transfer and endogenisation of technology. A recent study, for instance, by the Republic of Korea (ROK) has stressed the important role of independent consultants in transferring technology judging from the demand for consultancy services, one might infer that the consultant-user ioter-relationship is on the whole, quite rewarding.

Although the enterprise is key generator of technology and certainly the most important repository of technical capability, the producing firm and the various components of available networks for acquiring technical information do not exit in complete isolation. A favourable environment, an incentive structure conductive to innovative activity, ample educational opportunities and the provision of supporting R&D institutions areas ordinarily determined by national policies and actions. How national support might reduce the incidence of low-learning equilibrium traps for enterprises, and simultaneously avoid technological stagnation nationally, are the main issues worth studying. The Malaysian experience presents the following picture in the regime of technology policies. In October 1988, a Committee was constituted to formulate an Action Plan for Industrial Technology Development. The Plan consisted of 42 specific recommendations grouped within five "strategic thrusts.". Under the first, leadership, the Plan calls for a strengthening of the resources allowed to the Ministry of Science, Technology and the Environment; the creation of a permanent committee on S&T headed by the Prime Minister, and the establishment of an Advisory Council on S&T composed for members from the government, the research and the private sector. The overall objective is to raise total R&D expenditure to 1.5 per cent of GNP by 1995 and 2.0 per cent by the year 2000. Another goal is to shift towards a more applications-oriented, market-driven research system. The second strategic thrust-takes into account R&D an the private sector. Incentives include soft loans or grants up top SI million provision of land, and discounts or exemption on utility rates. The third strategic thrust, dealing with new and emerging technologies, is termed as the launch pad. Automated manufacturing technology advanced materials technology, electronics technology, biotechnology, and information technology are to be designed as priority a*reas for new R&D. Human resources, under the cubic of ultimate resource* constitutes the fourth strategic, thrust. One suggestion is a 1 per cent payroll tax on manufacturing establishment to set up a skill development and the private sector for funding industrial training programmes. Lifetime upgrading of skills is encouraged through the expansion of adult and continuing education programmes with particular emphasis on technical subjects. The final strategic thrust concerns science and technology culture. Often neglected in science and technology planing, implementation or actual practice, it is undoubtedly an important factor influencing all three dimensions of science and technology.