Tecbno/ogv In Socrety, Vol. 5, pp. 69-82 (1983) Printed in the USA. Ail rights reserved.

0160-791X/83 $3.00 + 00 CopyrIght t 1983 Pergamon Press Ltd

The Management of Technology Transfer to Public Enterprises in the Caribbean

Frank Long

ABSTRACT. The management of technology transfer with speck/ reference to public

enterpnies in developing countries has been neglected in the standard literature on

management. This study, which investigates problems of technology transfer in pubhc enterprises in the Caribbean, attempts to dlustrate how inadequate management of the technology transfer process by pubkc enterpkes imposes a heavy penalty on the per$or- mance ofpublic enterpnjes on one hand and on development on the other hand. On this basis a case is made for improved management of technology transfer by such enterpnies,

in order to increase the effectiveness of public enterpnjes in the development process.

While much examination has been conducted on the subject of technology transfer and the developing countries, the role of public enterprises as recipients of technology has hardly received much explicit treatment. At the same time, man- agement thinking has tended to neglect the problem of technology transfer as it affects public enterprises in developing countries in particular. This paper attempts to examine problems of technology transfer management with special regard to public enterprises in the English-speaking Caribbean. In this way it attempts-in part - to fill a gap in the literature. For purposes of the present exercise, some brief definitions are in order: Technology is regarded as “know-how for the purposes of production”; technology transfer is said to take place when technology is “received and applied” from one socio-economic environment to another; and, finally, pu&iic enterprhes are regarded as state-owned firms (partially or completely), which are commercially oriented, while at the same time being directly concerned with satisfying development objectives.

Although many definitions of management exist, it is generally held that it mainly involves the following: planning, organizing, commanding, coordinating,

Frank Long ti a Vtiiting Fe/low at Yale University, attached to the Council for Latin American studies and the Institution for Social and Policy Studies. Dr. Long has served as a Fe/low at Queen Elizabeth House, Oxford, EngLand, and as Senior Advkor to the International Centre for Public Enter-ties in Developing Countries in Yugoslavia. He was former/r Director of Technology PO/icy of the Nation& Science Council of Guyana and advisor to the Guyanan government on technology policy. This article is derived from a study preparedfor the International Centre for Public Enterpnkes in Developing Countries in YugosIavia, to whom the author is indebtedforpemksion to use some of the conclusions of the study. The views expressedin this paper are, however, solely those of the author.

69

70 Frank Long

and controlling. ’ Oliver has argued that sound management of technology is nec- essary in order to facilitate: (1) best use of human resources; (2) best use of machin- ery; (3) best use of materials; (4) controlled product costs; (5) controlled product quality, and (6) controlled product manufacture.’ If this is so, the case for tech- nology management is strong indeed. Yet, in spite of the proliferation of manage- ment concepts, it is fair to say that management theories have failed to deal satis- factorily with the question of technology transfer, as it is understood.

On the other hand, it is true that the concept of production and operations management, as Adam and Ebert have shown, attempts by its very nature to deal with aspects of operations, capacity layout, facility location, project scheduling, and quality control, and, as such, is germanely concerned with the question of technology within an enterprise setting.”

Burns and Stalker writing on Management of Innovation, Woodward on Management and Technology, and Oliver on Management of Production

Technology have also attempted to focus explicitly on technological aspects of the enterprise. 4 But this holds less true for the standard approaches to management, i. e., scientific management, human relations, systems theory, and modeling, to il- lustrate. Burns, Stalker, Woodward, Adam and Ebert, and Oliver, on the other hand, have concentrated largely on technology in general terms, and therefore have lost sight of technology transfer issues of specific importance to developing countries.

Thus, in these works mentioned above, two explicit omissions of particular relevance to the present discussion exist: 1) the specificity of public enterprises in a developing country situation; and 2) transfer of technology as a principal concern of management.

Some explanations can be held accountable for the apparent neglect which is observable in the literature. It is necessary to single out three. First, public enter- prise firms are not normally regarded as representative firms in free market type economies from which most of the literature has emanated and, therefore, seems tailored for. Even in cases where public enterprises have been examined, the technological dimensions of their operations tend to be neglected. This neglect is largely found in the field of economics, within whose tradition a large number of studies on public enterprises have been conducted. Turvey concedes this to some extent when he states “. . . , the economics of public enterprise is studied both for its own sake and as an exercise in the application of economic theory” ’ (emphasis added). It is known that standard works in economics tend to treat technology as “exogenous ,” which means, in effect, that the actual dynamics of technology es- capes meaningful analysis.

Second, most of the work on technology transfer and on the development of in- digenous technology has come into focus largely from a developmental perspective. In other words, it is often not firm specific as such, i.e., not strictly within the tradi- tion of management science, but rather located within the framework of Develop- ment Studies. This remains so, in spite of the fact that most large-sized firms, i.e.,

pharmaceuticals, electronics, petrochemicals, such as transnational corporations, do involve themselves in the management of technology at various levels, i.e., R&D, technology forecasting, technology assessment, etc. Recent writings on

Managerned of Technology Transfer 71

technology management, to which reference has already been made, do often take cognizance of this fact. But this, in principie, raises different sets of problems to those which involve enterprises in developing countries as recipients of such technology, as will be seen later.

The third point is partly related to the first, and is concerned with public enter- prises as agents of achieving, in the words of United Nations Resolution 2388 (XXX), “the overall economic and social development goals in accordance with na- tional development plans.“6

Change Theories Approach to Technology Transfer Management

The neglect of the treatment of technology transfer and the development of in- digenous technology in the management literature has already been noted. However, change theories have recently attempted to look at the explicit problem of technology transfer management. Such theories are found largely in the work of Hornstein, Tichy, and Nisberg. They were later used to deal with problems of technology transfer in developing countries, at the enterprise level.

Essentially, change theories attempt to understand how firms alter their behavior “to adapt to new developments in the external environment to improve internal efficiencies and to develop internal capabilities.“’

Recently, Wallender has used this approach specifically to examine how enter- prises in developing countries are managed, how they view the utility and ap- plicability of technologies to their operations, how development in their local en- vironments affects their behavior, and how they interact with a change agent in order to absorb and adapt foreign technology.* Wallender’s study looked at firms in Brazil, Kenya, Korea, Peru and Tanzania, and found the approach well suited to the analysis of enterprise-specific problems associated with technology transfer.

Attention must now be focused on public enterprises. The importance of public enterprises to technology transfer in the Caribbean stems from the following:

0 Public enterprises are active in strategic and leading sectors in respective economies, i.e., mining, energy, agriculture, etc., which constitute impor- tant growth points and play a major part in the acquisition process of technology;

0 Public enterprises, on balance, have both greatest potential for R&D, and scope for the development of indigenous technology in the “formal” sectors of Caribbean economies given the above;

0 Public enterprises are generally regarded as instruments of national develop- ment, and effectiveness in this respect, it can be argued, would have to en- tail an explicit role in the field of technology, given its importance to na- tional development;

l The overriding concern by respective countries for: a. Adaptation, assimilation and absorption of foreign technology to their

development requirements, i.e., natural resource use, labor absorp- tion, environmental balance, etc. ;

72 Frank Long

b. Reduction of cost of technology transfer; c. The need to develop indigenous technology and to promote some

measure of technological self-reliance; (a), (b) stem from (i) relatively weak bargaining power of small economies, (ii) adversities associated with technology transfer given openness of their economies and struc- tural weakness thereof; and (iii) relatively low levels of technological development, given comparatively low stages of development of re- spective countries;

0 Limited past contribution of the private sector to technological development on account of: (1) incipient and weak nature of the indigenous private sec- tor, many of which operate in the “informal sector”; (2) many private sector firms are largely in “trade” as distinct from production; and (3) foreign ownership and control by transnational corporations in the private sector of these countries (R&D, for example, was hardly encouraged locally, as most of this took place in parent companies).

It can be hypothesized that at least two reasons exist for adequate management of technology transfer by public enterprises in the Caribbean. They are: (1) to pro- mote microeconomic efficiency at the firm level; and (2) to maximize the contribu- tion of public enterprises to development. Evidence, for example, has shown that improper technology transfer can reduce levels of efficiency in a given enterprise, z’, e., inadequate absorption and assimilation of imported technology can raise pro- duction costs above normal levels, for example.

The Caribbean: Basic Data

The English-speaking Caribbean is dominated by small-sized economies. They have been identified as having the following characteristics:9 (1) high ratio of foreign trade to GDP; (2) d omination of export trade by one or two products; (3) absence of a diversified resource base and narrowness of domestic markets; and (4) lack of adequate domestic interindustry transactions and dependence on foreign capital.

It is argued by some economists that “small economic” size imposes a major structural obstacle to self-sustained development. ‘O

Kuznets defines a small economy as one with a population less than ten mil- lion.” But, this cut-off point is hardly relevant to the English-speaking Caribbean, where only three of the 12 members of the Caribbean Community have popula- tions exceeding the 250,000 level.

The main foreign exchange earners in the respective countries are: sugar and bauxite and alumina (Guyana), petroleum (Trinidad & Tobago), bauxite and alumina, sugar and tourism (Jamaica), and sugar and tourism (Barbados). In each of the respective countries, these account for well over 80% of exports.‘*

In the main, imports are largely from Europe and North America. Important items include consumer durables and nondurables, and producer goods. Essen- tially, therefore, Caribbean economies can be regarded largely as primary pro- ducers. This is less so now than in the colonial period, during which manufacturing

Management of Technology Transfer 73

activities hardly existed in any meaningful sense. The term “plantation economy” is sometimes used to depict the economic reality of the Caribbean, i.e., its largely agrarian structure and economic dominance by foreign capital in this structure. I3 But this typology- useful though it is- is sometimes questioned on the grounds that it fails to take into account the dynamics of socio-economic change, outside of agriculture. Its defenders, on the other hand, point out that it is a necessary frame- work for understanding the process of underdevelopment in a Caribbean setting.

The Role of Public Enterprises in the Cadbean

Although national income statistics in the Caribbean do not capture the true significance of the role of public enterprises in economic activity in the Caribbean, fragmentary evidence suggests a spectacular rise in the importance of their activities between the late 1960s and the present time. I4 In Guyana, it is oflicially estimated that public enterprises account for some 800/6 of economic activity. I5 Between 1970-74, this increased from G$ 54.8 million to G$ 134.6 million. In Trinidad and Tobago, a 300% increase in the role of the state in “commercial and industrial concerns” was registered between 1972-75. In Jamaica, government’s net assets, largely in economic undertakings, rose from J$ 212.1 million in 1972 to J$ 608.3 million in 1975. I6 In the case of Barbados, public enterprises have been playing an increasingly important role over the years.

Thus, while it is true that the above countries are a curious blend of socialist- type, mixed, and largely freemarket-oriented developing countries, in many in- stances public enterprises have been assigned a special role in the development pro- cess. They are now found in economic sectors in which private capital, often of a foreign nature, was traditionally dominant (for example, mining, agriculture, com- mercial banking and finance, trade, and a number of natural resource-based ac- tivities). While it is true that reasons for the active involvement of public enter- prises in Caribbean countries differ, a widespread concern was the reduction of social costs associated with foreign ownership and control in main traditional sec- tors of these economies. That is, bauxite (Guyana, Jamaica), petroleum (Trinidad and Tobago), plantation agriculture (Guyana, Jamaica), banking (Guyana, Ja- maica, Trinidad and Tobago and Barbados), and tourism (Barbados, Jamaica), to illustrate. The shortage of indigenous private entrepreneurship meant that the task fell largely on the shoulders of public enterprises.

Such foreign control, it was argued, tended to limit prospects for socio-economic development of the Caribbean. Plantation agriculture, according to this reasoning, meant that agriculture was not used as a vehicle for national development, i.e., promotion of food-processing and capital goods industries catering to agriculture, where much potential for development was to be found. Instead, plantation own- ers, given their transnational nature, were content to export sugar, largely unre- fined, to external markets for processing. In turn, imports of manufactured goods, including food products, were obtained from metropolitan centers. However, profits earned tended to be repatriated. This, in turn, deprived the Caribbean of much needed investment funds.

Additionally, foreign control of plantation agriculture meant, given the impor-

74 Frank Long

tance of plantation agriculture to respective economies, that the economic decisions were influenced largely from overseas. This ran counter to the prevailing belief of political independence, which was obtained by most of these countries during the 1960s.

A similar set of reasons led to the involvement of public enterprises in mining, banking, state trading, and manufacturing activities. In the 1970s Guyana, Trinidad and Tobago, and Jamaica took measures to engage public enterprises in bauxite and petroleum. The prevailing belief was that, given the exhaustible nature of bauxite and petroleum, it was necessary that these activities should con- tribute optimally to national development. Banking, traditionally controlled by transnational banks, also witnessed the presence of public enterprises in the form of National Commercial Banks during the 1970s. Public enterprises are also active in state trading (Guyana), manufacturing (Guyana, Barbados, Trinidad, Jamaica), tourism (Barbados and Jamaica), and air transport (Guyana, Barbados, Jamaica, Trinidad). These considerations were, however, reinforced by an ideology of na- tionalism throughout the Caribbean during the post-colonial period. This was partly influenced by Dependency Theorists, who saw dependence of foreign capital as the main structural weakness of these economies. Thus, national ownership of resources, as evidenced by the growing significance of public enterprises, became an important developmental thrust.

Judging from oflicial declarations throughout the Caribbean, public enterprises essentially are, on the face of it, expected to be commercially successful, while at the same time actively contributing to national development. However, recent reviews of the performance of public enterprises in the Caribbean, such as those contained in the Report by a Group of Caribbean Experts, have taken note of the fact that such enterprises had often failed to live up to expectations.” A widespread problem identified by the experts is “inefficient operations.“”

Technology Transfer Management in the Car&bean and Public Enterprises

Some Issues

Like most developing countries, the Caribbean participates marginally in the inter- national division of labor for science and technology. Most of the technology used in domestic economic activity in respective countries is imported from abroad. At the same time, local technology plays an almost imperceptible role in respective economies. It is sometimes contended that the basis for the peripheral role of the Caribbean in technology was laid during the colonial period. The Caribbean spe- cialized largely in primary production, the technological requirements of which were largely met by North America and Britain. These were obtained largely as a result of overseas direct investment and imports of capital goods, machinery, etc.

The question of small size was looked at earlier in brief. Small size, other things being equal, tends to introduce several problems in the field of technology. First of all, it means a given country is likely to be more “technologically open” than it would normally be. It further means that such countries tend to be in a relatively

Management of Technology Transfer 7s

weaker bargaining position than larger countries at a similar level of development. vis-a-vis technology suppliers, and as a consequence are likely to face greater adver- sities in terms of costs and implications of costs on national development given in- herent structural weakness, i. e., of a diversified resource base. Finally, it means that the scope of indigenous technology is limited compared to larger economies at a similar stage of development because scale economies, given small market size, may pose difficulties in terms of generating commercially feasible technologies.

Although much work has taken place on technological aspects of developing economies, the size factor has been generally ignored. From this point of view, fur- ther research may indeed confirm that Caribbean type economies are special cases, as Demas tried to do at a more general but technologically non-specific level. I9

Approaches to Technology Transfer Management and the Development of Indigenous Technology

Two main approaches to technology transfer management and the development of indigenous technology can be identified in the Caribbean, i.e., regional and na- tional levels. At the regional level, the CARICOM Treaty “makes provision for coordinated actions with regard to foreign private investment and the transfer of technology so that-through greater regional bargaining power-inflows of foreign private capital and technology can be obtained on the best possible terms.“”

Among regional institutions engaged in some form of regional technology transfer management and the development of indigenous technology, loose though this may be, are: the CARICOM Secretariat; the Caribbean Development Bank; the University of the West Indies; the Caribbean Agricultural Research and Development Institute; the Caribbean Food and Nutrition Institute. However, there is little integrated overall management taking place on a systematic basis; at- tempts to integrate regional efforts with strategies at the national level are further quite limited.

The latter observation brings us to the other widespread approach to technology management, namely, the national level. The 1970s saw the establishment of na- tional councils for science and technology in all four countries. The primary objec- tives of these councils can be summarized a follows: (1) to formulate national policies on science and technology; (2) to advise Government on matters relating to science and technology for development; (3) to help to bring about effective technology transfer; and (4) to develop indigenous technology.

As a consequence, all of these countries now have national policy documents in science and technology for development. Relatedly, national development policy objectives frequently stress the importance of macro-economic management of technology transfer and development of indigenous technology in key sectors, such as mining, agriculture, energy, fisheries and manufacture in an effort to promote self-reliant development and to accelerate the process of structural transformation of respective economies.

One of the basic shortcomings of prevailing approaches to management of technology transfer and the development of indigenous technology in the Carib- bean is to be found at the micro- or enterprise level.

76 Fran4 Long

The Neglect of Management of Technology Transfer by Public Enterprise

The evidence about to be reviewed points to a neglect of management of technology transfer by public enterprises and can be explained by several factors. It is necessary to deal with the most salient of these, notwithstanding the interrela- tionship between some of them:

0 Failure at the macro-policy level to establish necessary linkages at the micro- levels which, in turn, leads to problems of operationalization at the micro- level ;

0 Related to the above is a lack of clarity of objectives relating to the expected contribution, in the area of technology and development, of specific enter- prises;

0 The subject of management of technology transfer is of relatively recent origin in the Caribbean. From this point of view, many public enterprise firms still fail to see the day-to-day application of this concept to their im- mediate conditions. Also, existing management training programmes in the Caribbean are not presently geared for this subject;

0 Tendency of National Science Councils (as agents responsible for science and technology policy) to deal with the question of technology, largely in scientific research terms, to the neglect of a production-oriented focus;

0 Many of the important public enterprises, as it may be recalled, were, until fairly recently, owned by transnational corporations. Such corporations tended to establish R&D facilities abroad. Given this legacy, public enter- prises, in turn, have so far failed to “build up” an appropriate management infrastructure of technology.

The rest of this paper focuses on problems associated with technology transfer to public enterprises in the Caribbean.

Transfer of Technology and Public Enterprire: Main Issues and Problems

This section looks at technology transfer issues directly and indirectly associated with public enterprises in the Caribbean.

A study in licensing arrangements in Trinidad and Tobago examined 12 such ar- rangements, which covered the manufacturing sector to a large extent.” One agree- ment covered the petroleum industry. Most of these agreements involved US enter- prises and covered a period of five to ten years. The study showed that restrictions covering market areas were quite prevalent. It was found that every contract in- cluded some specification, mostly listing the territories in which sales could be made.22

Meanwhile, in terms of aspects of underdevelopment in Jamaica, a survey of science and technology revealed that the economy had traditionally relied on technology transfer to sustain operations in the industrial sector. However, it was found that technology transferred became an operational substitute for develop-

Management of Technology Transfer 77

ment of the economy’s research and development capability.23 The survey also noted that the traditional system of technology transfer, namely turnkey type packages, was unsatisfactory. It concluded that re-examination and review of the legislation affecting patents, licenses, fees, copyrights, etc., were necessary to render legal provisions more appropriate to current problems concerning tech- nology transfer. 24

Another study on technology transfer to Jamaica was based on a sample of 71

licensing arrangements. These covered the following sectors: pharmaceuticals, chemical products, machinery, hardware and equipment, construction, records, printing and publishing, and consumer goods.” The study identified the following problems: export restrictions, import restrictions, restrictions affecting production sales, pricing, and the adaptation, assimilation and diffusion of technology. Pay- ment abuses for the acquisition of technology were also found to be common.26

In a study of technology transfer in Trinidad and Tobago and Guyana, the widespread use of restrictive business practices in technology transfer relationships was identified.2’ The study covered 79 licensing agreements, 30 in Guyana and 49 in Trinidad. The sectors covered included agriculture, mining, food and tobacco, textile and leather, paper, chemicals, construction, transport, and communication. 28

In the case of Barbados, the need to reduce costs associated with technology transfer in some public enterprises led to the conclusion that there was urgency to reduce the economy’s dependence on foreign technical and economic expertise and foreign control over decision-making affecting that country.29 Better control over technology transfer contracts, the establishment of more efficient means to select, negotiate, adapt, disseminate and utilize imported technology was advocated as a measure to minimize costs affecting technology transfer.

A study on technology transfer affecting secondary agrobased industries was recently carried out and identified the following problems: the choice of products (consumption technology); choice of production techniques, and mode of organization of production. 3o In all three areas, it was found that technology transfer was not wholly appropriate. In this context, it should be noted that the full potential for agro-industrial development is yet to be realized in most of the Carib- bean. For example, in spite of its agricultural endowments, the Caribbean, on the whole, is still dependent on food imports (many of which involved public enter- prises).3’

In connection with the construction and construction materials sector in Guyana and Trinidad and Tobago, a dependency on foreign technology for materials and other services, including consultancy and construction, was identified.j’ The study noted that several indigenous substitute inputs for construction were, as a conse- quence, suboptimally utilized, for example, timber , granite, coral, sandstone, quarrying, clay, sand, bamboo and the like.33 Although the study did not cover the nature of foreign agreements affecting construction, it is quite possible that restric- tive conditions could have militated against more efficient allocation of indigenous construction technology.34

The petrochemicals sector is also of interest. The case for government interven- tion in relation to licensing agreements has been advanced on the following grounds:35

78 Franh Long

0 biases the source of technology;

0 possible unnecessary payments;

0 potential overcharging of royalties; and

0 constraint of the development of an indigenous capital goods industry and the use of local components.

Meanwhile, a study of the Caribbean bauxite industry has identified the follow- ing traditional weaknesses of the industry:36

0 non-existence of research and development in industrial laboratories of raw materials producing subsidiaries;

0 weakness and underdevelopment of local science and technology;

0 lack of local institutions with the bauxite producing sector.

The study also found that in relation to marketing and purchasing technology, the Caribbean was still dependent upon transnationals. Other areas of technologi- cal dependence included skills at operational levels:

0 management and technical skills of production;

0 maintenance;

0 consultancy services; and

0 projects (designing and engineering),

Undue dependence on technology was identified as one the main problems facing the industry.

In a study of foreign capital in Jamaica it was found that technology related to bauxite production played a leading role in problems of underdevelopment of that country. 37 This was particularly so as regards the use of local inputs in milk product operations and in the processing of bauxite and alumina. Also, technology transfer was limited merely to the operations of subsidiaries and with limited spread effects to the rest of the economy.3s

A study was conducted on tractor utilization in Guyanese agriculture where public enterprises predominate. It was found that, during prime crop periods, only 11% of all tractors were continually in operation; 45 % were idle for 25 days or more.3g Spare parts difficulties and repair and servicing of such parts as engines, gearboxes, brakes, generators, starters, radiators and steering were identified as some of the technical problems affecting the application of technology here.40

In the case of tourism, technology transfer, on the other hand, is said to have resulted in high imports of technology embodied in consumption goods to the det- riment of domestic agriculture in a wide cross-section of countries, for example, Barbados and Jamaica.

Management of Technology Transfer 79

Legd Aspects

Legal problems concerning the transfer of technology in the Caribbean are par- ticularly marked in three areas: trademarks, patents, and the general area of restric- tive business practices. Trademarks are an important vehicle through which tech- nology is transferred to developing countries. They assist in commercializing, for example, consumption technology. This is especially so where the economy lacks an autonomous indigenous commercial sector such as the Caribbean. A recent study on foreign trademarks in developing countries concluded that consumers pay higher prices than usual because of advertising with brand names.“’ It also con- cluded that trademark arrangements lead to resource misallocation marked by “the increase in consumption expenditures at the expense of savings and in superfluous consumption at the expense of basic consumption. “42 It also found that the misal- location of resources in favor of subsidiaries of transnational corporations and local licensees have led to a bigger share in the domestic market and to an increase of remittances abroad affecting the balance of payments.43

In the Caribbean, a large number of registered trademarks, many of which cover public enterprises, are primarily foreign in origin. For example, a survey found the following: in Jamaica (out of 17,055), foreign ownership was estimated at 85 % ; in Barbados it was estimated at 89% ; in Guyana, over 90% .44 In spite of the fact that hard evidence is lacking for Trinidad and Tobago, it seems likely that a similar pattern of foreign ownership exists.

In relation to the above, a recent survey of trademarks legislation in the Carib- bean has shown that existing legislation is based primarily on the 1875 and 1938 Trade Mark Act .45 Legislation based on the latter act was found in Trinidad, Jamaica, Guyana and Barbados. It is difficult to draw conclusions from the data on legal aspects of technology transfer as they stand.

Further Remarks

The difficulty affecting poor management of technology in public enterprises is brought out clearly in the following statement by the Group of Caribbean Experts:

There is a growing tendency for public sector development programmes and projects to be formulated and administered on an adhoc and uncoordinated basis. Major projects involv- ing considerable capital outlay are being started without sufficient forward planning either from the input or output side. Serious bottlenecks are commonplace If the major efforts proposed for all principal sectors are to succeed, then all governments need to ad- dress urgently the problem of upgrading the present machinery for planning and de&on- ma&g 46 [emphasis added].

Given the evidence just reviewed, it can be argued that micro-economic inefficiency of public enterprises appears to be conditioned by operational prob- lems of a technology transfer nature. It is true that other problems can effect this, such as shortage of skills, poor overall management, supply constraints such as machinery, raw materials, components, undue political interference, etc. Even so, specific problems concerning the management of technology transfer can be identified. Some of the main ones are:

80 Frank Long

0

0

0

0

0

0

0

improper systems for selecting foreign technology;

improper systems for adapting foreign technology to the specific needs for respective public enterprises;

widespread occurrence of turn-key projects which means that limited technical know-how is transferred to such enterprises;

poor preventive maintenance systems;

limited concerted efforts to develop and upgrade indigenous technology of relevance;

limited R&D to upgrade product quality and to improve innovation pro- cesses; and

shortage of relevant technical skills and limited on the job training to build up enterprise-specific “skills banks.”

At the developmental level, several benefits of technology transfer can be readily identified. For instance, economic growth, new employment opportunities, and generation of new skills, to name a few. These are undoubtedly crucial for economic development of the Caribbean. On the other hand, on the basis of evidence reviewed thus far, the following problems tend to be associated with technology transfer affecting public enterprises:

l increased balance of payments burden as a result of overpricing of technology;

0 in some cases, reduced export levels as a result of export restrictions;

0 inappropriateness of technology choice;

0 increased reliance on foreign technology because of prevalence of “tie-in” clauses or preference for turn-key projects;

0 non-development of an indigenous technological capability because of the foregoing; and

l increased economic and political dependence on foreign technology sup- pliers.

The literature on technology transfer, notably the United Nations Conference on Trade and Development (UNCTD), often attributes these developmental prob- lems largely to the functioning of the international technology market, for exam- ple; its highly imperfect nature, dominance of transnational corporations as sup- pliers of technology, and weak bargaining power of technology buyers from developing countries. While these factors are undoubtedly important, the author’s research seems to show that the problem of technology transfer management on the part of recipient firms in a developing country situation plays some part in determining the overall situation. The exact extent of this cannot be readily ascer- tained from the data as they stand.

Management of Technology Transfer 81

Nevertheless, if the author’s perceptions are correct, on the basis of a priori reasoning, it can be argued that improved management of the technology transfer process can contribute to an improved technical performance of public enterprises thereby contributing, ceteris pa&us, to higher profits which can contribute to capital formation which in turn can accelerate development. Increased profits can also mean the existence of a greater ‘reserve fund’ for social investment, i.e., health, education, environment, and, therefore, for developmental purposes. Fur- ther, proper management of technology transfer can conceivably result in better scrutiny of the technology market, i.e., screening, selection, terms and conditions, which in turn can contribute to the reduction of restrictive clauses, appropriate choice of technology, and the use of indigenous technology, wherever feasible in the overall technological package.

Although far from being wholly conclusive, it is fair to tentatively conclude that improper technology transfer management appears to be associated with key prob- lems affecting the performance of public enterprises in the Caribbean. On the whole, it was found that such enterprises lacked appropriate internal management systems for selecting, absorbing and assimilating foreign technology. A major weakness of existing approaches to public policy in the area of technology transfer is therefore to be found in the area of public enterprises. If the evidence at the author’s disposal is correct, arguably a more sensitive approach to management of technology transfer on the part of public enterprises can result in greater organita- tional efficiency of public enterprises with the resultant effect of lower cost and bet- ter services, and at the same time an enhanced contribution of public enterprises to socio-economic development in the Caribbean by a reduction of social costs asso- ciated with the transfer of technology. In this way, an important raison d’ette for promoting public enterprises in the Caribbean (i.e., to serve as a catalyst for devel- opment) can be realized with more meaning than hitherto.

Notes

1. Henri Fayol, Indurtnjl/ and Genera/Administration (Geneva: IntcrnationaI Management Institute, 1929).

2. Stanley Oliver, The Management of Production Technology (London: Mechanical Engineering Publications

Ltd., 1978).

3. Everett Adam and Ronald Ebert. Production and Operations Management (NewJersey: Prentice Hall, 1978).

4. Stanley Oliver, The Management of Pmduction Technology, op. cit.; Tom Burns and G. Stalker, Manage-

ment of Innovation, 2nd ed. (London: Tavistock Press, 1966); and Tom Woodward, Management and Technology (London: Her Majesty’s Stationary Office, 1918).

5. R. Turvey. cd., Pub& Enterpnie (Middlesex: Penguin, 1968).

6. United Nations Resolution on the Public Sector, New York, 1975. 7. See Harvey Hornstcin, Noel Tichy and Jay Nisbcrg, Organization Diagnosis and Intervention Strategies

(Honeywell Junction: Behavioural Science Associates, 1973).

8. Harvey Wahcnder, Technology Transfer and Management in Developing Countries (New York: Fund for Multinational Management Education, 1979).

9. W. Demas, The Economics of Development in Small Countries with Special Reference to the Car&bean (Montreal: McGill University Press, 1965).

10. Ibid.

82 Frani Long

11. S. Kuznets in E. Robinson, ed., Economic Consequence of the Size of Nations (London: MacMillan, 1968). 12. Impression gained from National Accounts Data of these countries.

13. See G. Beckford, Persirtent Poverty (London: Oxford University Press, 1971). 14. A. Brown, “Issues of Public Enterprise ” in Public Sector Issues in the Commonweahh Canbbean, Vol. 30

(1981). 15. Ibid 16. Ibid. 17. The Caribbean Community in the 298Os, Report by a Group of Caribbean Experts (Georgetown: CARICOM.

1982) pp. 37-38. 18. Ibid 19. W. Demas, The Economics of Small Countries, op. cit. 20. Caribbean Community in the 19805, op. cit., p. 15.

21. A. McIntyre and 8. Watson, Studies in Foreign Investment in the Commonwealth Caribbean, No. 1,

Trinidad and Tobago (Mona: University of the West Indies, 1970), p. 47.

22. Ibid. 23. Jamaica National Planning Agency, The Survey of Jamaica Science and Technology Research ( 1976), p 52. 24. Ibid. 25. See 0. S. Arthur, The Commerchhation of Technology in Jamaica, Caribbean Technology Policy Studies

Project, 1977.

26. Ibid. 27. See M. Odle, Commercialization of Technology andDej&zce, Caribbean Technology Policy Studies Project,

1977.

28. Ibid. 29. Survey of Science and Technology Development Needs in Barbados (Washington: Organization of American

States, 1977), p. 1. 30. See J. Dellimore and J. Whitehead, Secondaty Agro-bared IndustneJ in ECCM and Barbados, Caribbean

Technology Policy Studies Project, 1977.

3 1, A Caribbean food plan is now mounted to promote greater regional self-sufficiency in food.

32. See R. 0. Westmaas, Construction and Constructron Materials, Caribbean Technology Policy Studies Project,

1977, Chapter 1.

33. Ibid. 34. This would be in keeping with an established practice of transnationals in terms of their resource patterns.

35. See S. DeCastro, Petrochemicah Sector Study, Caribbean Technology Policy Studies Project, 1977.

36. Ibid. 37. N. Girvan, Foreign Capita/ and Economzc Underdevelopment In Jamaica (Mona: University of the West

Indies. 1971), see Chapters 1-4.

38. Ibid. 39. See F. Sukedo, “Utilization of Tractors in the Rice Industry in Guyana,” Pxxeedings of the Tenth West

Indian Agricultural Economics Conference, Vol. II. (1976).

40. Ibid. 41, See The Impact of Trade Marks on the Development Process of Developing Countries (UNCTAD, 1976).

42. Ibid., p. 73.

43. Ibid. 44. See A Background Paper on Trade Marks (CARICOM Secretariat, 1977).

45 Ibid.