Technology Transfer And Sustainable Development: The Case Of The Asean Countries

Hesan A. Quazi Low Siok Lan

Valerie Wong Yuet Minh Penny Chan Ai Ling

Nanyang Business School, Nanyang Technological University, Singapore 639798

Abstract-This paper proposes an ‘Environmental Friendly Technology Transfer Model’ (EFTTM) to facilitate the process of the transfer of environmental technology for the ASEAN countries, A survey was conducted to validate the proposed model in which four ASEAN countries participated. The result of the survey is discussed.

I. INTRODUCTION

Economic and population growth has led to severe negative impacts on the Asian Environment. The real costs of environmental degradation in the forms of increasing health costs and mortality, reduced output in the resource based sectors and overall environmental qualities are mounting (Brandon and Ramankutty: 1993).

Deforestation, soil erosion, pesticide contamination, urbanization, industrial pollution, atmospheric emissions and degradation of water resources are the major environmental problems facing the region (Howard: 1993).

The total pollution load contributed by the industrial sector in the region has grown exponentially. The public health impacts of these pollutants are compounded by the high geographic concentration of industry, especially in East Asia, and by water shortages in industrial areas. A study by the World Health Organization showed that twelve of the fifteen cities around the world with the highest levels of particulate matter and six of the cities with the highest levels of sulfur dioxide, are in Asia. Of the seven cities in the world with the worst air pollution, five are in Asia (Brandon and Ramankutty: 1993).

Much of the water pollution in the developing countries is caused by human waste, improper disposal of chemicals and other hazardous wastes from industry and farming. Obtaining safe water is a growing problem throughout urban and rural areas of Asia as a result of growing population, industrialization and the use of polluting chemicals in agriculture and other industries.

The initial estimated cost to Asian economies of urban environmental degradation is very high. For example, the cost of air and water pollution in Jakarta and Bangkok exceed US $1 billion and US $ 2 billions per year respectively. Developing countries need to expend 2 to 3 percent of GDP per year to achieve greater environmental sustainability. In Asia this translates into about $38 billion per year by the year 2000 (Brandon and Ramankutty: 1993).

11. ANALYSIS OF THE SITUATION

The underlying causes for such degradation are: 1. Fundamental market and policy failures concerning natural resources and the environment, 2. Strain on the resource base imposed by the large and growing Asian population’, 3. Rapid urbanization and industrialization imposing complex demands on the assimilative capacity of the environment as well as on human and institutional abilities to respond, 4. A common perception (caused in part, by lack of information) that there is a direct tradeoff between environmental protection and economic growth2 (Brandon and Ramankutty: 1993).

The options that are available for improving environmental management in Asia (identified by the world bodies) are: priority setting, policy reform, strengthening public institutions, increasing private and public sector investment, and improved technology and technology transfer.

This study focuses only on the environmental technology transfer and management issues in selected ASEAN countries.

111. ENVIRONMENT-TECHNOLOGY CONNECTION

Technological transformation is argued to be the primary strategy for avoiding environmental degradation. Historically, technological change has contributed most to the expansion of wealth and productivity. Properly channeled, it could hold the key to the environmental sustainability (Heaton, et. al., 1991, p. ix). The health of the environment during the 21st century will be shaped significantly in both developing and industrialized countries by the choice of technologies made in the late 20th century (Barney: 1980, 94-95).

Developing countries, however, need not reinvent the wheel. They can import the technology that is readily available from the industrialized countries. However, the

’ The Asian population size in the year 2025 is projected to be 4.3 billion which will represent about 50% of the total world population by that time.

’ Technological transformation means wide spread, continuing development and adoption of ever less polluting and more resource efficient products, processes, and services (Heaton and et. al., 1991, p. ix).

Brandon and Ramankutty (1993) argue that there is no tradeoff.

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import of technology should be complemented by local development that is most suited for local conditions. Proper management of the international transfer of such technologies is critical for the success of the subsequent performance of the imported technology (Quazi: 1984).

Iv. E NVIRONMENTAL FRIENDLY TECHNOLOGY TRANSFER MODEL (EFTTM)

Existing technology transfer models do not explicitly address the environmental issues. Therefore, there is a need to develop technology transfer models that explicitly address the issues related to both economic development and environmental soundness. New atld appropriate criteria for evaluation of environmentally sensitive projects are to be identified and used. For the developing countries, it is critical to balance the amount of technology transferred and the amount generated internally to avoid perpetual dependence. For successful transfer, the importing country needs to have the appropriate technological and managerial capabilities to assess the ‘requirement, identify the source technology and negotiate the terms of transfer.

the appropriate technological capabilities and infrastructure of the importing organizatiodcountry are the critical success factors of technology transfer. Additionally, an appropriate research capability allows countries to generate technologies suited to their needs and to participate in debates over global issues. Increased technological and managerial capability also help select and modify the most appropriate solutions to their needs. Countries that do not have such capabilities may end up with unsuccessful transfers at a huge cost to the environment and the economy.

Research evidence indicates that the presence of

Help the member nations achieve higher levels of assimilation and diffusion of imported (and locally generated) technology in their respective countries, and

Help the member countries to develop appropriate managerial and orgainizational capabilities within a reasonable time frame so that they are able to manage the entire process of technology transfer, assimilation and diffusion on their own.

The Environmental Friendly Technology Transfer Model (EFTTM) for the Asian Countries4 (see Quazi: 95) depicts the process of achieving a healthy environment for the region. To validate the applicability of the proposed model, a survey was conducted in a number of selected ASEAN countries. The result of the! survey is presented below.

VI.’rHE SURVEY

A comprehensive questionnaire was designed to collect information on issues related to environmental technology transfers and to test the validity of the proposed EFTTM discussed above. The questionnaire was pre-tested before mailing it to the prospectiive respondents. The questionnaire also sought the opinion of the respondents regarding the feasibility of the establishment of the ‘Clean Organization’ proposed in this paper.

Three hundred questioimaires were mailed to the selected companies engaged in anvironmental technology related businesses in four ASEAN countries (e.g., Indonesia, Republic of Philippines, Republic of Singapore and Thailand. These companies were chosen from various directories on these countrie~.~ A number of senior managers from the various environmental institutes and companies were also interviewed.

V. PROPOSED MODEL FOR THE ASEAN COUNTRIES VII. SLIRVEY FINDINGS

The Newly Industrialized countries (NICs) of the region can facilitate the transfer of environmental technology to the developing countries of the region. It is proposed that a regional environmental technology transfer organization be set-up in one of these NICs to achieve the following goals:

1. Facilitate the member countries in identifying and sourcing the right technology, and properly negotiating the terms of the transfer.

2. Train the engineers, managers, scientists and technicians of the member countries to increase the technological, managerial and environmental capabilities.

3. Have joint R&D projects to create solutions to environmental problems suited to the local conditions,

A . Profile of the organizations

A total of sixty two coinpanies participated in this survey. Of these, about 53% were in manufacturing , 21% in consulting, 16% in trading and 11% in engineering operations. Among the Singapore companies, the mix was slightly different, specially, manufacturing 45%, consulting 29% and Trading 18%. The responding companies had been in operation, on the average, for about ten years. Each company employed about 12 engineers and technicians. Twenty eight percent of the employees had tertiary education (Singapore 46%) Malaysia 19%). Thirteen percent of the Singaporean companies, 23% of the Malaysian companies

4. Develop a global environmental network to facilitate the sourcing of technology,

The digram has been dropped due to space limitation For example, Environmex AsialWatermex Asia 95 Show Directory, Asia’s

7500 Largest Companies (1995), FMM Directory of Malaysian Manufacturers, Singapore Industrial Directory-Green Book, 1995/96.

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and 25-60% of the other ASEAN countries reported having in-house technology development activities, On the average, there were five R&D personnel per company.

B. Import and export of environmental technology

About 72 percent of the Singaporean companies, 54% of the Malaysian companies, 75-100% of the companies in the other ASEAN countries imported environmental technology. About 42 % of the Singaporean companies, 31% of the Malaysian companies and about 25% of the companies in the other ASEAN countries export environmental technology.

C. Nature of technologies used, imported and exported

Both embodied and disembodied technologies were imported and exported by the sample organizations. Watedwaste water treatment equipment was the most used technology in all the companies, followed by resource recovery/ recycling technology. Embodied air pollution control technology was the most imported technology in the Malaysian companies but was the second most imported technology in the other sample companies. In the case of the Singapore companies, disembodied air pollution technology was the second most imported item. Waterlwaste water treatment equipment (both embodied and disembosied) was also the top rated environmental technology that was exported from the sample companies.

D. Major export markets

Companies from Singapore and Malaysia were exporting environmental technologies to the other regional countries. Indonesia was identified a5 the number one export market for Singapore companies followed by Malaysia, Myanmar and the Philippines. For Malaysia, Indonesia was the number one export market followed by China.

E. Training programmes on technology transfer related issues

The sample companies were asked to indicate the types of investment they make in training pertaining to environmental technology. Singapore companies were found to be investing more in training related to adaptation of technology (30% of the respondents) followed by ‘assimilation of technology’ (17%) and sourcing of appropriate technology (15%). However, these companies were found to have invested very little in training pertaining to negotiation skills (only 7.5% of the respondents). The Malaysian companies invested more in sourcing of appropriate technology (2 1%) followed by adoption of technology (14%), assimilation of technology (14%) and negotiation skills (14%).

F. Diflculties encountered during the exportation of environmental technology

Fifty percent (50%) of the Singaporean companies, 75% of the Malaysian companies and 100% of the companies from other ASEAN companies encountered difficulties during the process of exporting environmental technology. Overall, 59% of all the respondents that exported environmental technology indicated encountering problems during such process. The respondents were also asked to rate (on a five point scale, 1= least difficult, and 5= most difficult) the nature of difficulties faced from among a list of possible barriers to the export process. ‘Assimilation capacity of the host country’ was rated as the most difficult factor (3.68) followed by ‘assimilation capacity of the buyer fir” (3.55) and‘negotiation problems concerning the price of the technology’ (3.54). The ratings by the Singaporean companies were, to a large extent, very similar to the total sample companies except for a few barriers. For example, there was a large gap between the ratings of the Singapore companies and those in other ASEAN countries with respect to ‘protection of environmental technology from unauthorized use’, ‘enforcement of copyright laws’ and ‘home government’s restriction’.

G. D$ficulties encountered during the process of importing environmental technology

Respondents that imported environmental technology were asked whether they encountered any difficulties during the process of importing environmental technology. Twenty two percent of the Singaporean companies, 72% of the Malaysian companies and 25-100% of the companies from other ASEAN countries encountered difficulties during the process of importing. Overall, thirty seven percent of all the responding companies indicated that they had encountered such difficulties.

The respondents were also asked to rate (on a five point scale, 1= least difficult and , 5= most difficult) the nature of difficulties faced from among a list of possible barriers to the import process. Most difficulties faced by these companies were ‘prior experience with relevant environmental technology’ (3.87) followed by ‘high cost of technology transfer’ (3.8 1) and ‘dependency on exporting organization’ (3.67). However, major differences were observed between the responses of the Singaporean companies and those in other ASEAN countries. For example, Singapore companies rated low on ‘complexity of environmental technology’, ‘negotiation problems regarding the price of technology’, ‘assimilation capacity of environmental technology’ and ‘assimilation capacity of importing organizations’ compared to those of the companies in other ASEAN countries.

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VIII. ESTABLISHMENT OF AN ENVIRONMENTAL TECHNOLOGY TRANSFER CENTRE ( “THE CLEAN ORGANIZATION”)

The respondents were asked to rate (on a five point scale, l=least important, and 5= most important) twelve factors pertaining to the creation of an ‘Environmental Technology Transfer Centre’ in the region. According to the Singapore companies, the most important factor was ‘availability of research facilities’ followed by the ‘availability of managers having required skills and experience related to environmental technology’, environmental record, infrastructure and so on. However, in the case of the rest of the sample, the most important factor was ‘availability of managers having required skills and experience related to environmental technology’ followed by environmental record, local government encouragement, availability of financial aid and so on. Of the 62 companies that participated in the survey, an overwhelming 84% (52) ranked Singapore as number one for housing the proposed ‘Clean Organization. ’

Ix . s UMMARY AND CONCLUSION

The choice of technologies may be the area in which society will have the greatest latitude and leverage in shaping the future of the global environment. Existing technology transfer models are generic in nature that can be modified to suit the specific needs. Accumulations of technological, managerial and environmental capabilities seem to be the key to successful technology transfer and its subsequent absorption and diffusion. It is, however, to be noted that management of the environmental technology is a necessary but not a sufficient condition to achieve sustainable growth. Other appropriate options like, priority setting, policy reform, strengthening public institutions and increased investments are also to be pursued simultaneously. It is also to be noted that different countries may warrant a different combination of these options to achieve the same goal.

This paper proposed an Environmental Friendly technology Transfer Model (EFTTM) to facilitate the process of the transfer of environmental technology for the ASEAN member countries. The survey that was conducted to validate the proposed model and to find out other relevant information revealed that- (a) a large majority of the sample companies imported environmental technologies, (b) A relatively small proportion of these companies also exported such technologies to the regional countries, and (c) only a small proportion of these companies invested in training related to sourcing, adoption, and assimilation of technology. These companies primarily imported both embodied and disembodied watedwaste water treatment technology, resource recovery/resource recycling and air pollution technology.

The survey also indicated that the sample organizations experienced substantial difficulties during both import and export of environmental technologies. Difficulties faced during the import process included- (a) not having prior experience with relevant technology, (b) high cost of transfer, and (c) dependency on seller organizations.

Availability of research facilities, availability of managers having required skills and experience related to environmental technology, environmental record, and local government encouragement were identified as the important factors for the establislment of the proposed ‘Clean Organization.’ Singapore was considered to be the most suitable country, followed by Malaysis, to house such an organization.

x. LIMITATIONS OF THE STUDY

Sixty one percent of the total respondents were from Singapore and as such, the result of the study reflects the opinion of the Singaporean companies rather than the entire ASEAN region. Furthermore, the sample size in Indonesia, Thailand and Malaysia were too small to be representative. Therefore, any conclusion drawn from this pilot study should be used with caution. I:t is also to be noted that the questionnaire was written in english and that may have had an effect on the response rate. Translation of the questionnaire in respective native language would have possibly increased the response rate.

WTFERENCES

[l] Bamey, Gerald O.,(Ed.), (1980), The Global 2000 Report to the President of the US-Entering the 21st Century, Pergamon P Policy Studies.

[2] Brandon, C . and Ramankuitty, R. (1993), Toward an Environmental Strategy for Asia: A Summary of the World Bank Discussion Paper, Washington, The World Bank.

[3] Heaton, G., Repetto, R., iind Sobin, Rodney (1991), Transforming Technology: An Agenda for Einvironmentally Sustainable Growth in the 21th Century, Worlds Resources Institute.

[4] Howard, M.C. (Ed.), (1993), Asia’s Environmental Crisis, Oxford, Westview Press.

[ 5 ] Keller, R.T., and Chinta, R.R., (1990), International Technology Transfer: Strategies for Success, Academy of Management Executive, Vol.

[6] Quazi, H.A. (1984), Technological Capacity and Production Performance in the Fertilizer and the Paper Industries in Bangladesh, Dhaka, Dhake University.

[7] H. A. Quazi, “Environmental Technology Transfer: Issues Concerns, and Recommendations for the ASEAN Countries,” Proceedings of Pan- China Symposium on Management of TechnologV and Innovation, Hangzhou, P.R. China, 24-26 October, pp. 218-227, 1995.

[8] Robinson, R. D., (1988), ‘The Intemational Transfer of technology: Theory, Issues, and Practice, Cambridge, Massachusetts, Ballinger Publishing Co.

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