technology, poverty and the role of new technologies in

South Asia Conference on Technologies for Poverty Reduction, New Delhi,10 – 11 October, 2003

Dasanayake, Sarath, University of Moratuwa, 2003 1

TECHNOLOGY, POVERTY AND THE ROLE OF NEWTECHNOLOGIES IN ERADICATION OF POVERTY: THE CASE OF

SRI LANKA

BY

Dr Sarath DasanayakaHead/Dept. of Management of Technology

Faculty of Engineering, University of Moratuwa Sri Lanka

1. Introduction

Technology, innovation and Research and Development (R&D) are widely recognized asthe most important factors in eradication of poverty which is the prime objective ofeconomic growth and development in any developing country. It has been documentedthat long-term poverty eradication programs and strategies should be designed byincorporating the technology, innovation and R&D aspects. Many developed countrieshad achieved their economic growth, development and industry competitiveness bypaying due attention to technology, innovation and R&D aspects while formulatingdevelopment strategies. This paper discusses various aspects of technology developmentand its interaction with poverty from a Sri Lankan perspective by giving more emphasisto the role of new technologies.

2. Brief History of Science and Technology Development and its Interaction withPoverty in Sri Lanka

Sri Lankan technological history can be divided into a number of periods. Technologiesin different sectors were developed in these periods and evidence was not available aboutits exact contribution to reduce poverty. However technology contributed in many waysto improve economic growth and development which ultimately reduces poverty.However, in reaching the present status of technology and eradication of poverty, we canfind two major periods: pre-independence period (before colonial and after colonial) andpost-independence period (before and after 1977 policy reforms).

2.1 Pre-Independence Period

The Sri Lankan technology level before the 16th Century was comparable to mostsocieties of the time. It is believed that in ancient times high knowledge of trigonometry,some practical geometry and astronomy were well known to Sri Lanka. Spinning jennywas used in traditional weaving industry even in the 16th Century and a Portuguese writer



reported that Sri Lankan guns were the best in the world at that time. In the health sector,a number of hospitals were built by many Kings (Parakramabahu and Dutugemunu) andtherefore, most writers reported that Sri Lanka was very advanced with respect tocontemporary Ayurveda medicine technology. On top of that, Sri Lankans were excellent

in irrigation technology including many trans-basin diversions, multi-purpose irrigation,drainage, flood control and conservation. Some writers reported that Sri Lankan 12th

Century ancient irrigation technology was unique and such technology could not be seenin the rest of the world till 17th Century (Goonathilake.S, 1976; Needham.J, 1956;Mendis. D, 1974).

With the Colonial incursion from the 16th Century, Sri Lanka was increasingly exposed toWestern technology. This western technology was introduced as a package without anyinteraction with the existing indigenous technology. Portuguese did not introduce thatmuch technology into Sri Lanka but the Dutch introduced some technology with respectto construction of water canals, buildings, roads and harbors. But the modern technologyera began in Sri Lanka in the 19th Century with the British colonization of the country.The British idea was to develop Sri Lanka as an agricultural base for them and market fortheir industrial products. Therefore, they identified tea, rubber and coconut as mainproduces from Sri Lanka to the world market. In order to facilitate these, they developedmajor rail and road networks and the Colombo seaport as well as associated engineeringdepartments such as Ceylon Government Railways (CGR), and Public WorksDepartment (PWD), Government Factory, Colombo Port Workshop and private sectorowned Walker Sons & Co. Ltd, Walker & Greig, Brown and Co. Ltd and ColomboCommercial Company. At the beginning all the key positions of these organizations weremanned by the British and later to train technical people for these organizations, theCeylon Technical College was founded in 1893, but in 1950 this was elevated to thestatus of Faculty of Engineering under the University of Ceylon. In order to eradicatetropical diseases and to improve the health of the settlers, the British established aBacteriological Institute which is now known as Sri Lanka Medical Research Institute,Ceylon Medical College in 1870 and Nurses Training School in 1939. In addition to this,a number of hospitals, clinics, and dispensaries were established and due to all thesemeasures substantial advances were made in health sector. This had created variousimplications for demography in Sri Lanka. In the field of agriculture, the Department ofAgriculture, Tea Research Institute, Rubber Research Institute, and Coconut ResearchInstitutes was set up in the 1930s, but little attention was paid to the Research &development of rice, subsidiary crops and spices. The British later attempted therestoration of major ancient irrigation works mainly due to pressure from Sri Lankanrepresentation in legislature. The Gal-oya multi-purpose project, the first modernirrigation work started with the assistance of USA Consultants. Irrigation Departmentdeveloped and repaired most of the irrigation works by using Indian and other wardisplaced nationality engineers. Irrigation Department works mainly used localtechnology talents with labor intensive methods. In the industrial sector the Britishpioneered the establishment of several factories such as coir (1937), steel-rolling (1937),plywood (1941), leather (1941), acetic acid (1942), paper (1942), glass (1944) andceramics (1944) due to war situation. During this period, the Industrial Research



Laboratory was established in the Department of Commerce and Industries to serve theindustry. Some technology achievements were made in hydropower electricitygeneration, transport and telecommunication & broadcasting fields during the Britishoccupation of Sri Lanka.

2.2 Post-Independence Period

After political independence in 1948, a number of R&D institutions were established inorder to develop Science & Technology in Sri Lanka. Ceylon Institute of Scientific andIndustrial Research (CISIR) was the first of such kind. But this institution failed todeliver its objectives as reported by many publications (Wijesekera, 1976; APCTT, 1986)due to inadequate staff, lack of research groups and expertise in different fields and toowide area coverage and lack of linkages with industry. In 1966, the IndustrialDevelopment Board (IDB) was set up to provide various technical services to Small andMedium scale Industries (SMI). Its principal functions were preparation of the feasibilityreports, technical services, surveys on industries, documentation and publications, loanarrangements, management information and advice to SMI. It is expected that IDB willinform other R&D organizations about the technology needs and capabilities of otherindustries. But this does not happen and a significant contribution did not happen inindigenous technology development of the country. In 1956, a Ten year Plan wasdeveloped by the Planning Secretariat with the help of famous Economists by ignoringthe R&D community to develop S&T in Sri Lanka (APCTT, 1986). In 1965, the NationalScience Council was set up after intense lobbying by the S&T community in Sri Lanka.At the beginning, NSC was trying to formulate a national science policy for Sri Lankawhich still could not be completed. In 1974, the National Engineering Research andDevelopment Centre (NERDC) was set up to carry out and promote research andinnovation and commercialization. Research and development was carried outsuccessfully, but commercialization was not very successful. In 1976, an UNCTADmission came to Sri Lanka and they reported that Sri Lanka has the machinery forscreening imported technology but it is incomplete and considerable R&D sectordevelopment is required. This mission recommended that a Centre for Transfer andDevelopment of Technology be established as a focal point to link R&D institutions withnational economic planning apparatus. But so far no action has been taken on this front.R&D efforts in the private sector are confined to local subsidiaries of multi-nationals andtheir joint ventures and some Sri Lankan companies. Some specialized R&D works arecarryout by some state corporations such as ceramics, tyres, mineral and sands. During1960 – 1977 periods, much R&D work did not take place in the private sector due toheavy state involvements in the economy. During this period, most of the technologytransfers occurred as donations from the Soviet block as mega factory setting up. Most ofthese industries are import substitutions and they showed inefficiencies at the outset andlater political involvements almost wiped out the competitiveness of these industries andbecame a burden for the public.

After 1977 policy reforms, private sector was given a leading role in the economy.Thereafter private R&D activities showed positive growth in some industry and firmlevels. Technology transfer and R&D works happened in sectors such as infrastructure,



construction (housing and dams, etc), garments, communication, ceramics, rubberproducts and information technology through sub-contracting, out sourcing or own R&Dworks. From 1983 escalation of the ethnic conflict meant that government expenditurewas mainly diverted to war rather than to industrial development. Furthermore, foreign orlocal private sector did not invest as expected. Therefore it is obvious that muchdevelopment in S&T did not happen after 1983. As the above brief historical note shows Sri Lankan R&D history was not that muchsuccessful. Prior to independence it is obvious that the state deliberately ignoredtechnology issues which are not the domain in plantation agriculture. But after theindependence, the most significant reason for the failure was lack of high level politicalcommitment and support for the R&D activities. Furthermore, the need to developtechnology and skilled and motivated S&T community within the country, lack ofrecognition and lack of active liaison with the international S&T community and S&Tdevelopments elsewhere in the world are the other reasons for this gloomy picture.Overall, a well defined technology policy should be in place at national, sectoral and firmlevel to put Sri Lanka in to the world technology map.

Non-existence of the industrial capital class may be another key reason for the lowindustrial base in the country. During the past century, involvement of a majority of SriLankan capital class was limited to plantation and service sector based activities.Presently, their main involvement can be observed in the financial sector such asbanking, leasing, insurance, etc. and trading where not much technology progression istaking place.

3. Poverty – A definition

Absolute poverty can be defined as the degree of poverty below which the minimalrequirements for survival are not being met. This is a fixed measure in terms of aminimum calorific requirement plus essential non-food components. While absolutepoverty is often used interchangeably with extreme poverty, the meaning of the lattermay vary, depending on local interpretations or calculations.

Close to 900 million of the worlds poor, i.e. those who survive on less than $1 a day, livein the Asian and Pacific region.

South Asia, one of the poorest sub regions in the world, has more than half a billion poorpeople, of whom 450 million are in India.

Sustainable growth and social development are key elements for reducing poverty.Successful achievement of either element requires sound macroeconomic managementand good governance.

The quality of good governance is critical for poverty reduction. Good governancefacilitates participatory, pro-poor policies as well as sound macroeconomic management.



It ensures the transparent use of public funds, encourages growth of the private sector,promotes effective delivery of public services and helps to establish the rule of law.

Population in Absolute Poverty in Sri Lanka (%)

Source: Bhalla (1985) Table 16a, Marga Institute (1978) Table 13, Anand (1985) Table4.1, Edirisinghe (1990) Table 2, World Bank (1994) Table 1.4.Sector 1969/70 1973 1978/79 1980/81 1981/82 1985/86 1986/87 1990/91Urban 4.9 3.7 24.4 16.9 19.6 16.4 12.2 18.3Rural 12.8 17.6 31.6 25.9 23.2 31.7 32.8 24.4Estate 11.1 0.5 8.1 25.0 13.8 14.3 13.5 12.6Total 11.2 13.1 22.7 24.1 21.9 27.3 27.6 22.4

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101520253035

1969/70 1973 1978/79 1980/81 1981/82 1985/86 1986/87 1990/91

Urban�� Rural

Estate��

Total

Incidence of Poverty %Lower Poverty Line Higher Poverty Line

1985/86 1990/91 1995/96 1985/86 1990/91 1995/96Sri Lanka 27 22 21 41 35 33RuralSector

32 24 23 45 38 35



UrbanSector

16 18 12 27 28 21

EstateSector

14 13 12 31 28 27

Source: Data for 1985/86 and 1990/91 are from World Bank (1995); data for 1995/95from Aturupane and Gunewardena (1998). All estimates are based on data for the firstquarter from the Household Income and Expenditure Surveys of 1985/86, 1990/91 and1995/96.

Depth of Poverty %Lower Poverty Line Higher Poverty Line

1985/86 1990/91 1995/96 1985/86 1990/91 1995/96Sri Lanka 7 5 4 11 9 8RuralSector

8 5 5 13 10 9

UrbanSector

3 4 2 7 7 5

EstateSector

4 2 2 8 5 5

Source: Data for 1985/86 and 1990/91 are from World Bank (1995); data for 1995/96from Aturupane and Gunewardena (1998). All estimates are based on data for the firstquarter from the Household Income and Expenditure Surveys of 1985/86, 1990/91 and1995/96. 3.1 Persistence of Poverty in Sri Lanka

Poverty in Sri Lanka has been found to be concentrated in the following economicactivities such as landless agricultural workers, small land-owning peasants cultivatingfood crops using family labour, fishing and animal husbandry, workers in small scalerural industries, small traders and self employed persons such as individually operatingcraftsmen such as masons and carpenters.

The main reasons behind the persistence of poverty in Sri Lanka are inadequate capitalformation and social exclusion.

Inadequacy of capital formation is one of the factors that led to the persistence of povertyin Sri Lanka during the post 1977 era. In spite of the radical program of policy reforms



implemented since 1977 with the intention of creating export oriented conditions that willpromote growth, various conditions have prevented the process of rapid growth in SriLanka. These constraints stem from the global as well as the domestic environment.

The constraints emanating from the global environment relate to volatility in the globaleconomy, increased protectionism in major markets, high degree of competition amongcountries for export markets as well as to attract foreign capital and the limited linkagescreated by the foreign investors that are attracted.

Low domestic savings, the slow growth of the national industrial class, policyinconsistencies, inadequate business confidence, poor infrastructure facilities and thefragmented nature of the country’s industrial sector are the constraints that affect thedomestic environment.Social exclusion/marginalization is also a major factor that affected the persistence ofpoverty in Sri Lanka. It is important to note that certain groups in society weresystematically excluded from remunerative jobs and marginalized from otheropportunities due to language and other social networks.

4. The use of Technology to eliminate Poverty

4.1 The use of technology in agriculture

The Rice Research and Development Institute (RRDI) continues to play a major role inthe country’s rice sector by releasing new high yielding rice varieties and introducingimproved rice production and protection technologies to help farmers realize the yieldpotentials of the varieties that they grow.

The research and development programs at RRDI focus on increasing farm productivityfrom the current 3.6 t/ha to 4.5 t/ha within the next five years, reducing cost of productionand improving grain quality of rice.

Efforts are being made to develop techniques that will help increase rice plants nutrientuse efficiency. A need based fertilizer application method is being tested. This wouldhelp maximize effectiveness of fertilizers applied and reduce cost of production.

The hybrid rice research program was further strengthened by financial and technicalassistance from the International Rice Research Institute (IRRI), Asian DevelopmentBank (ADB) and technical assistance from the Government of China.

In an effort to attain a quantum jump in rice yields, breeding programs were initiated todevelop rice varieties with a few tillers, sturdy culm and heavy panicles-plant architecturedesignated as the new-plant type. Both traditional varieties like Bandara Hethhava andintroduced lines from IRRI were used in the breeding program.

A ten fold increase in rice production and a five and a half fold increase in average yieldswere seen over the last five years as a result of this program. (Source:



www.agridept.gov.lk/RRDI/Rrdiindex.htm) The focus has been on the development oftechnology for obtaining high yield with excellent quality.

At present, the country produces 96% of the required amount of rice. However, to meetthe growing needs of the population in the face of a shortage of land for cultivation,RRDI is seeking to strengthen the R&D activities to improve soil fertility andsustainability, pest, disease and weed management, post harvest and grain quality andproduction technologies.

Variety improvement programs have been launched by the Rice Research DevelopmentInstitute to incorporate new plant types into new varieties. The traditional variety SuduruSamba has a highly preferred quality grain. Therefore, efforts were made to shorten theplant through mutation. RRDI has also identified the line Bg 1816 (120 d) for immediate release as it’s superiorto the present standard variety and therefore will be recommended for island widecultivation. Bg 305, Bg 358, Bg 359 and Bg360 were released for commercial cultivationand it is expected that these varieties will give farmers an opportunity of more varietaloptions for their paddy lands. The yield potential and adaptability of these varieties arebetter than the present recommended ones.

Efforts are also being made to produce seeds of some of the promising F1 hybrids byIsolation Free Method and Artificial Barrier Isolation method. Through this method0.75-1 t/ha seed yield was obtained.

Continuous farming on same land causes degradation of soil. The fallowing of such landis a widely adopted practice for many years. However, soil amelioration by fallowing theland is a lengthy process. Therefore, it is necessary to find methods to accelerate thisprocess. Studies were in initiated in this respect by using Citronella and Sunnhemp asvegetation. Results show that the adoption of grass with 7 seasons increases the dry andwet aggregate stability by 12 and 17%, soil available water at 0.l bar suction by 21%,exchangeable K by 45% and OM by 25%. Adoption of Sunnhemp increases the dry andwet aggregate stability by 8% and 10% and exchangeable K by 44%.These studies have improved the productivity of farmed land in general.

The Field Crop Research & Development Center conducts experiments on Maize,Sorghum and Finger millet. Experiments have revealed that hybrid maize and varietyPacific 11 showed significant yield increase to added nitrogen.

Utilization of sorghum in different foods and in industry is successfully studied. Potentialof the variety for feed purpose, both seed and fodder is tried at several farms in thecountry.

A new finger millet variety “Ravana” was released in 2002 which has given 5-15% yieldincrease compared to the earlier recommended variety “Ravi”.



The major production constraint in Kurakkan is fungal diseases during the Maha season.The present variety “Ravi” is highly susceptible to fungal diseases. Thus, three promisingcultivators Ac#108, Ac#152, Ac#1201 were introduced and these give over 4 t/ha whichis significantly higher than the yield obtained by “Ravi”.

Tomatoe is one of the most important and popular vegetable crops in Sri Lanka.Cultivation during the dry period is restricted due to high temperature. Out of the ten heattolerant lines tested, four were selected for further evaluation.

Four new post emergence herbicides were evaluated to assess their weed controllingability. Among the tested herbicides pyanchlor (pyribenzoxion 500 ml/ha) could beidentified as a broad spectrum herbicide while SETOFF (Cinosalfuron 100g/ha) and AIM(Curfentrazone 62.5 g/ha) could be identified for controlling broad leaves and sedges inwet seeded rice under dry conditions.

The Field Crop Research & Development Center conducted a study to find a method forrapid decomposing of straw using Trichoderma harzianum fungus. It was found that thedecomposition of straw becomes faster with the application of Trichoderma harzianumthan application of urea to straw and normal straw decomposition.

The Field Crop Research & Development Center also conducts soil testing programs forthe benefit of farmers. The analytical reports with fertilizer recommendations andnecessary instructions are sent to the farmers for carrying out their cultivations. Thisservice is mainly helpful for farmers for farming economically and long-term landimprovement.

With regard to irrigation problems technologies related to drip irrigation, such as microirrigation systems have been used to cultivate coconut, banana, pineapple and a variety ofother products specifically in the dry zone. These have been very successful and haveyielded a five to six fold increase in production.

4.1.1 Farmers’ Forum

Twelve forums were conducted to make farmers know about new technologies developedin the Out Field Crops, vegetable and fruit sectors in 2002. For these, 302 farmersparticipated.

During the year 2002, Field Crop Research & Development Center produced and issuedbreeder’s seeds of 18 Out Field Crops and 2 vegetables.

Amount issued (Kg)Crop Variety Requirement(Kg)Maha

2001/2002Yala2002

Total

40.0 40.025.0 25.0



Tissa 40 20.0 20.0Maize Aruna 10 9.0 9.0

Ruwan 10 9.0 9.0Finger Ravi 02 2.6 20.0Millet Ravana 0.5 0.5Greengram MI-5 15 14.85 4.5 19.35

Harsha 6 3.0 5.0 8.0Ari 10 10.0 - 10.0

Blackgram MI-1 10 10.0 - 10.0Cowpea MI-35 05 5.0 - 5.0

The Dry Zone Agricultural Development Project (DZADP) aims to increase theagricultural productivity of 16,000 farm households in the 'dry zone' districts of NorthernKurunegala/Anuradhapura, Polonnaruwa, Hambanthota and Moneragala. DZADP willimprove farming, irrigation, harvesting, storage and marketing of rice paddy cultivationand support agencies to respond to the needs of farmers and provide farmers with qualityservices.

The use of nanotechnology in agriculture has the potential to reduce crop waste, and hasthe ability to monitor crops more effectively than before as well as fundamentallyredesigning the DNA structure in plants. The implications of nanotechnology fordeveloping countries are that the geographic location of raw materials becomes relativelyirrelevant for the world. As most raw materials are imported from developing countries tothe developed world, the impact on the developing world is detrimental.

Nanotechnology has not been adopted in Sri Lanka and there are no plans to use it in thefuture either.

In the coconut sector several advances have been made such as treatment system fordesiccated coconut effluent (coconut water). An Anaerobic granular bacterial treatmentsystem has been introduced to treat the above and the by-products such as biogas can beused as a boiler fuel.

Instead of manual de-shelling, a motor operated mechanical de-sheller has been installed.This has improved the efficiency of the process of de-shelling coconuts in large estates.

The introduction of steam operated , vibrating type modern dryers instead ofconventional desiccators has ensured better quality products as there is no directcontamination of the product with flue gas.

In conventional dryers, hot air is generated by using air to air heat exchanges where fluegas is passing through one side. Therefore, the possibility of contamination is very high.In the new dryer, hot air is generated by using steam to air heat exchanges and dryingtemperature is electronically controlled to achieve better product quality.



The Tea Research Institute has been instrumental for the development of various types ofnew varieties of that have high yields and are resistant to pests and harsh weatherconditions.

4.2 The use of technology in education

Information and communication technologies can be used to facilitate education amongthe rural poor, who often do not have access to education. The Central Bank Report for2002 reveals that the number of schools in rural areas has dwindled compared to 2001.

In this context, distance learning based education can fill the gap created by the lack offormal education. Technology can be a very useful tool, as it is to able facilitate distancelearning and this method has been used by several non-government organisations to reachchildren and women in rural areas. The transfer a great deal of information across variousgeographies to different types of people at the same time is a very distinct advantage. Thecrucial factor would be whether rural people have access to these technologies and canafford them.

4.3 The use of technology to improve sanitation

Safe drinking water at both community and household level can be provided through thedeepening of existing wells and the installation of additional hand pumps in each area.Sanitation and refuse disposal should be improved to reduce water contamination.

4.4 The use of technology in irrigation

Agriculture in these communities is dependent on sustainable ground water supplies.Through repairing existing reservoirs, improvements in water conservation have beenpossible. Water-harvesting systems have been able to minimize wastage of water.

4.5 The use of technology in transport

The lack of a developed road network is evident in the rural areas of Sri Lanka. Thebicycle is the main mode of transport for communities living in these areas. Simpleinnovations such as a cart to the bicycle can improve the livelihood of these people

4.6 The use of technology in rural areas of Sri Lanka

The Kothmale Community Radio Internet Project is an attempt to extend the benefits ofinformation and communication technology (ICT) to some of the remote areas of SriLanka through the innovative convergence of two media, the radio and the Internet.

Most of the radio broadcasts use information collected by browsing the Internet; thisinformation is then discussed with listeners on the air. The Internet access pointsestablished in the community enable direct computer access and respond to the



information needs of various groups in the community which consists of 60 villages and3 rural towns.

An online database of information requests is maintained, and a web page in locallanguages enables active community participation in the operation of the radio.

Easy and free access to information has been effectively used by community members forbusiness, educational, recreational and other purposes. More than 30 web pages havebeen created by community youths. In addition, an Internet club and a listeners club havebeen formed. The radio station has become an integral part of the community, withpeople actively participating in interactive programs, contributing compact disks andsongs to the station, and using the information aired on various programs to upgrade theirbusinesses or learn more skills.

However, the operational and financial sustainability of the project needs more attentionand consideration needs to be given to better utilization of technical capacities forincreasing revenue. In addition, the project has reached a point where staff-managementcoordination requires review and remedial action.

The following table presents some economic, social and digital indicators with respect tofour provinces in the island carried out by the Consumer Finances and Socio EconomicSurvey- Central Bank of Sri Lanka 1996/1997.

Indicator Western NorthCentral

Uva NorthWestern

Average ofsevenprovinces

Average Income permonth per spendingunit in Rs.

12,712 6,434 6,096 7,095

Availability ofelectricity (percentageof households)

76.8% 40.3% 48.7% 40.5% 56.8%

Literacy Rate 96.4% 91.4% 86.8% 93.1% 91.8%Availability ofTelephone/Mobilephone (percentage ofhouseholds)

10.3% 1.8% 2.1% 1.1% 4.5%

Availability of personalcomputers

0.9% 0.0% 0.0% 0.1% 0.4%

Source: The Island, Friday 25th July,2003, page 16.Studies conducted by SLT have revealed that 87% of Internet traffic could be attributedto exchanges in Colombo district. Kandy came next with a mere 2%. The rest of thecountry contributed only 11% of Internet traffic.



The rural Internet penetration is low due to several key reasons. They can be summarizedas follows.

In a survey conducted by a Business Consultant at Asia Soft Solutions, a reputedsoftware company, it was revealed that among 244 Internet users in Anuradhapura,Polonnaruwa, Puttalam, Matale and Hambanthota districts, 25% found the surfingcharges very high, while 66% called them high.

Low level of computer literacy in the country is a major drawback. Unlike in India,where vernacular languages constitute a large percentage of the local web content, in SriLanka still English holds sway. Not even many of the local government organizationshave bothered to present their content in Sinhala and Tamil. This creates an unbridgeablegap between technology and the users given the comparatively low level of Englishparticularly among the rural folk.

Attitude problems especially among the older generation who feel that the Internet is notfor them have also proved to be a barrier in the proliferation of the Internet. The abovesurvey also revealed that only 15% of the respondents were above 45 years of age andmost of the users were those in their twenties and thirties.

Technical issues such as difficulties in obtaining computer maintenance services, usersupport services etc at the village level have also caused problems for rural folk.

In this context, the introduction of Information and communication technologies in ruralareas should be prioritized as the proliferation into rural areas has been ratherinsignificant in terms of volume. The fact that a majority of the poor population living inthe country are in rural areas should also be considered.

Another interesting point is that the rural user has to pay more than his urban counterpartdoes to use Internet facilities. This is because in many cases an outstation user has to diala server in Colombo paying national telecommunication charges, while the Colombousers pay only local charges. Some telecommunication service providers have taken stepsto address this situation by specifying local charges for Internet users irrespective of thelocation from where they dial-in, but that solution has still failed to overcome the issuecompletely.

The government has taken several steps to overcome this situation. Approximately onefourth of the installation cost of a payphone booth, that is installed in a rural area arebeing subsidized by the government. The scheme was introduced in the latter part of1999.

License conditions of Wire Less Loop operators have been modified to facilitateincentives to those who give new connections to rural areas.



PC's per 100 inhabitants Vs Internet users '00

00.20.40.60.8

11.2

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4.7 Technology as a means of promoting feedback from the poor

Feedback is essential in order to gauge the impact of poverty reduction strategies on thepoor. Technology facilitates such feedback through means such as e-mail. However, thepoint remains whether the rural community will be able to make effective use of suchmeans as they are unaccustomed to technology.

In other countries in the West in particular, senior citizens are provided the opportunity ofcommunicating with their respective governments, government departments and alsowith senior members who hold office such as even the president through e-mail. Howeverin Sri Lanka technology has not been used for such purposes. This could be becausetechnology penetration has been quite low and senior citizens in particular in Sri Lankathink that technology is not for them.

5. Government Recognition and Commitment for Technology Development

Government recognition of the importance of technology and commitment to technologydevelopment are very important factors in technology development of a country. Turningback to the recent history of Sri Lanka, following initiatives and events taken by differentgovernments highly influenced the technology development of the country.

• 1978 elected President J.R. Jayewardene was the pioneer in understanding theimportance of S&T and R&D for Sri Lankan economic growth and development.

• In 1982 June the National Science Council was taken under his direct purviewand the main role of this body is to advice the President on S&T issues.

• In 1984 May the President requested to formulate a National Science Policy Planand Implementation Document. This was done in 1985 April. This Committeewas headed by Prof Cyril Ponnamperuma and they formulated S&T policies foreight economic sectors.

• From 1984 onwards various science and technology agreements were signed withvarious governments and various bodies such as CINTEC and Arthur C ClarkeCentre, etc were set up.

• In 1994 Cabinet level Ministry of Science and Technology was established givingdue recognition to importance of S&T.



• The Ministry of Science and Technology has focused on ten identified thrust areasof industry in which Sri Lanka has the potential to become competitive in theworld market. An ADB funded project (ADB/STPDP covering 7 universities and5 R&D institutes was initiated in 1998 to train S&T personnel in these trust areas.The creation of a technology watch is also part of this project.

• The National Science and Technology Commission (NASTEC) was formed by anAct of Parliament, and came into operation in August 1998. It has been designedas the Apex Policy Formulating and Advisory body to the Government of SriLanka on Science and Technology matters.

• Present government has taken initiatives to develop SMI through various policymeasures and incentives. Number of foreign funded programmes is on going withrespect to this SMI technology capacity building.

Among the on going activities of S&T development, the Science and TechnologyPersonnel Development Project under the Ministry of Science and Technology andactivities of the Ministry of Enterprise, Industrial Development for the development ofSMI are important milestones.

Even though successive Sri Lankan governments have taken various steps in technologydevelopment there is much more to do to bring our technological status to some satisfiedlevel. One of the major drawbacks is the lack of a proper technology policy frameworkintegrated with an industrial development framework. First, the government should try toimprove the macroeconomic policies to encourage faster innovation. They can introducetax and other incentives for innovation, with special emphasis on speeding up theinnovation in response to foreign challenges. APCTT report (1986) explains three majortypes of instruments which can be used to formulate effective technology policy; theseare Legal Instruments, Financial Instruments and Fiscal Instruments. Paralleldevelopment of industry and technology is a must for the sustainability of both. It isworthwhile to consider the framework developed by Gunawardane (2000), which stressesthe need of Centre for Transfer and Development of Technology (recommended byUNCTAD mission in 1976) and Industrial Development Bank.

It is also important to educate the public and business enterprises about the technologicaland marketing forces/changes and necessary structural changes in response to them.Presently part of this requirement is fulfilled by the Technology Watch Centre of theNational Science Foundation by providing the information on Technology Developmentin other parts of the world.

S&T community should be given the due recognition to build Sri Lanka’s own Scienceand Technology capability. The working and living conditions of S&T personnel have tobe improved. Allowances and perks such as housing, transport and schooling for theirchildren should be provided.

Creation of a Science and Technology culture is another important role that thegovernment should take necessary initiatives. Programs can be started at both schoollevel and national level. Government rural lab program, media (television, radio and



newspapers) publication (books, journal, web) are some of the means which can be usedto create the S&T culture in the country.

Representation of the Science and Technology Ministry in the Cabinet is very important.Non representation of S&T ministry in the cabinet will directly affect the futuredevelopment of the technology since all the key decisions are taken by the cabinet.Technology development is mainly influenced by the country’s education and industry.These subjects are governed by the various administrative bodies and thus continuousdialogue at the ministerial level is essential for proper progression of technology.

5.1 Human Resource Aspects

There are four major ways of getting human resources for S&T. These are:• Technical Institutes• Universities• Migration of qualified people to the country• Use of foreign technical personnel and consultancy services

According to the statistical Abstract of Sri Lanka, more than 20,000 are enrolled formiddle level technical courses and about 30,000 are enrolled for vocational trainingprograms directly related to technology. Sri Lankan universities have produced onlyabout 1000 graduates in natural science and about 650 graduates in engineering in 2001.Even though the Sri Lankan education system produces only a limited amount of humanresources for S&T, the Sri Lankan industry is not capable of providing satisfactory jobsin the S&T discipline. Due to the reduced demand for the S&T disciplines in Sri Lanka,many graduates from technical colleges and universities leave the country for foreignemployment while some are employed in non-technical disciplines. Unattractiveness ofemployment in S&T disciplines is evidenced by the inclination of S&T studentsfollowing Professional Management and Business courses like CIMA and CIM. (Forexample, about 30% of engineering undergraduates of the University of Moratuwa followCIMA or other Professional Management course). The most sympathetic situation is thatalmost all the brilliant students (top 10% of the batch) are enrolled in professionalmanagement courses in addition to their regular degree program and will be employed inmanagement, business and banking disciplines after graduation without giving muchtechnology input for the progression of the country.

The status of the scientists and technologists is poor compared to professionals in otherdisciplines and S&T professionals suffer because of the following problems.

• Poor income standards and living conditions• Inadequate facilities to do research• Constraints to update their knowledge• The tendency to devalue the importance of our S&T personnel by relying excessively

on foreign experts.• Relatively low social status in comparison with other professions.• S&T personnel are not given due place in decision-making.



This situation results in high mobility of the S&T professionals from Sri Lanka todeveloped countries. In the long run, such asymmetric mobility is likely to widen the gapbetween rich and poor nations, offsetting all efforts to bridge the disparity in S&Tcapacities between developed and developing countries. A study conducted by theCommittee on Science and Technology in Developing Countries (COSTED) of theInternational Council for Science (ICSU) involving three Asian countries, Bangladesh,India and Sri Lanka revealed that out migration of S&T professionals is a serious issue inSri Lanka and Bangladesh for many reasons. Government funding of education up to theBachelor’s degree in Sri Lanka results in significant loss to the government as a result ofout-migration. This study gives the following recommendation for solving the problem.• Mobility cannot and should not be arrested;• There is a need to keep a systematic global watch on trends in the movement of S&T

Professionals, that may help developing countries to evolve their national frameworkof human resource development;

• Mechanisms be created for retaining and making the best use of exceptional talentswithin the country;

• Favourable environment should be created for attracting resources for world-classeducation and research institutions in developing countries to retain talentedprofessionals;

• Measures and programs to attract nationals overseas either temporarily orpermanently should be formulated.

5.2 R&D and Technology Capabilities

5.2.1 R&D Expenditure

According to the National Science Foundation (NSF) survey the total R&D expenditurein the country was Rs 1492 m in the year 2000 compared to Rs 1410 m in 1996. Hence,the GERD/GDP ratio for the year shows a fall to 0.17%. However, this figure needsadjustments to accommodate under presentation of figures in certain areas/sectors in thenational S&T system. With these adjustments, the total expenditure on R&D can beestimated as Rs 1810 m, which is 0.19 % of the GDP in the year 2000. From thesefigures, it can be seen that Sri Lanka is still struggling to achieve the GERD/GDP ratio of0.2%, which is far below the recommended figure of 1% from the national GDP for thedeveloping countries.

The R&D expenditure according to the type of expenditure shows that more than 69%was spent as recurrent expenditure. The R&D institutions, which contribute to more than67% of total R&D expenditure in Sri Lanka, shows that more than 67 % of recurrentexpenditure is spent on salaries and wages. From these figures one can categorize that theR&D in Sri Lanka, as a labor intensive research based one.

Table 1: R&D Expenditure – by nature of research activity



Year 1984 1996 2000

Nature of activity Amount Rs.M (Per cent)

Amount Rs.M (Per cent)

Amount Rs.M(Per cent)

Basic Research 24.75(10.0 %)

446.30(32.0 %)

363.624.0 %

Applied Research 185.16(72.0 %)

867.30 (61.0 %)

743.950.0 %

Experimental Development

46.89(18.0 %)

96.00(7.0 %)

385.226.0 %

TOTAL 256.80(100 %)

1409.60(100 %)

1492.6100 %

(Source: Science and Technology Statistical Handbook 1996 & NSF unpublished report))

It can be seen that the R&D activities in the year 2000 were more oriented towardsexperimental development activities (from 7% in 1996 to 26% in 2000) than in 1996. Theabove change in nature of R&D activities can be considered as a reflection of theeconomic policies of the country towards industrialization and the response of the publicsector research institutions to these industrialization policies by expanding their R&Dactivities at the cost of basic and applied research.

Table 2: R&D expenditure (Rs. M) - discipline and type

Discipline 1984 1996 2000

Natural Sciences 30.70(12.00 %)

318.30(22.60 %)

441.9(30.0 %)

Agriculture 153.40(59.80 %)

669.20(47.4 %)

341.1(28.0 %)

Engineering 32.80(12.80 %)

164.30(11.60 %)

255.9(17.0 %)

Medical Sciences 13.30(5.20 %)

136.60(9.70 %)

159.8(11.0 %)

Social Sciences 26.5(10.20 %)

121.20(8.60 %)

238.1(16.0 %)

TOTAL 256.70100 %

1409.60100 %

1492.6100 %

(Source: Science and Technology Statistical Handbook 1996 & NSF unpublished report)



According to the Table 2, it can be seen that % R&D expenditure drops in Agriculturesector and increases in Natural Science. The above changes are due to the significantchanges in R&D expenditure by the private sector industrial organizations carrying outresearch in natural sciences and Engineering & Technological research are the majorreasons for the above.

5.2.2 Patents in Sri Lanka

According to the NSF survey (Amaradasa, et al., 2002), a total of 461 patents had beenregistered with the National Intellectual Property Office of Sri Lanka (see Table 3). Thegrowth trend of a patent is a clear indication of the rising interest of innovators inprotecting intellectual property. A significant conclusion of the NSF study was that thesmaller contribution of patents both by commercial organizations (22%) and by publicresearch institutes (6%), as compared to the contribution of 72% by individual inventors,was a reflection of the weak innovative character of the organized sector. It could beobserved comparatively higher amount of patents in dryers and dehydration technologies,food and beverage processing, agricultural systems and energy saving.

Table 3: Distribution of patents according to NSF classification

No. of patents grantedNSFclassification 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Total

Dryers/DehydrationTechnologies

3 1 2 1 2 1 4 1 3 2 20

Food & BeverageProcess Technology

2 1 1 2 5 2 2 4 4 1 24

Rubber Production& ProcessingTechnology

3 1 3 3 6 2 1 1 1 1 1 2 25

AgriculturalSystems &Development

1 2 1 3 1 4 2 2 1 4 1 1 6 6 35

ConstructionTechnology &Materials

3 3 1 1 1 2 2 1 2 2 3 21

Packaging &Packing Materials

2 2 1 1 2 1 3 4 1 3 3 1 1 25

1EnergySaving/GeneratingDevices

1 1 3 1 3 2 2 2 9 2 4 3 8 7 8 2 58

ProcessTechnology-ManufacturingSector

2 2 1 1 3 2 2 1 1 5 3 7 30

ProcessTechnology-Miscellaneous

1 1 3 3 1 5 1 1 3 6 3 3 4 6 5 46

Innovations- 1 1 1 2 2 1 1 2 2 5 3 2 12 3 1 39



DomesticAppliances/UtilitiesInnovations-Miscellaneous

4 2 3 5 3 1 1 5 4 2 4 3 3 17 9 13 79

ProductDevelopment

4 1 1 3 4 4 1 4 1 3 10 8 12 3 59

Total 13 9 13 18 17 29 16 26 20 30 19 25 29 33 65 55 44 461

(Source: Amaradasa et al., 2002)

5.2.3 Future Directions of R & D

Majority of the R&D activities related to traditional industries are limited to improve theexisting technologies to improve the productivity and diversification or improvement ofthe quality of existing products. There are limited R&D for developing innovative valueadded products. For example, R&D related to tea industry mainly concentrates on newmachinery and new flavors even though there are possibilities for cosmetic applicationssuch as perfumes and facials.

Utilization of local raw materials is essential for industrial development of a country. SriLanka is rich with natural resources (e.g. industrial minerals, plants, animal products,seawater). All these natural resources can be exploited to obtain valuable commercialproducts (e.g. silica and quartz mineral for electronic grade silicon, seawater forchemicals). Most of the natural resources are non-renewable. Thus, the present practiceof exporting these resources without value addition should be prohibited and themaximum benefit has to be obtained from these resources. Product and processtechnologies should be developed to give maximum value addition to local raw materials.

Harvests are wasted because produce cannot be stored or processed. Under this situation,R&D for high yield is useless. Parallel development of technologies for high yield andpost harvest food processing, packaging and transport should be carried out. Thissituation is not different even in the other sectors. Therefore the coordination betweentechnology development activities is essential.Fig 1: Technology development directions

F D IInte re s t

T ex tile an d A p p a re l

L o w va lu e a d d ed lab or in ten siv e In d u s tr ies

L o w eq u ilib r iu m trap

A ssem b ly

M od era te sk ills an d v a lu e ad d ed In d u str ies

E le c tron ic

H igh s k ills an d v a lu e ad d ed In d u str ies

B io -T ech n o lo g y

S op h is tic a ted an d kn o w led g e b ased In d u s try

L e v e l o f T ech n o lo g y

T im e



People need not only jobs, but high quality industrial jobs that enable people to learnnew, adaptable technological skills. However, presently the majority of the industries inSri Lanka do not use much advanced technologies while adding low value to the product.Most of the foreign direct investment target these industries and provide just jobs withoutmuch enhancement of the quality of life. Non availability of adequate technologicalcapabilities is one of the major reasons for the Sri Lankan industries being in this lowequilibrium trap. Thus future technology development activities should be targeted toattract the industries like automobile assembly, electronics and biotechnology.

Inter-firm relationship in technology development activities is at a very low level in SriLanka. Cooperated R&D activities will help to reduce the high level of risk and R&Dexpenditure. Technology Management literature shows three levels of cooperation asfollows:i. Research and development cooperationCooperative activities can be carried out in the pre-competitive stage in different form:University based cooperation research financed by associated firm, Government-industryco-operative R&D projects with universities and public research institute, R&Dcooperation on a private joint-venture basis.

ii. Technological cooperationCooperate agreement can be formed to transfer and share the technology between firmsin the competitive stage. Corporate venture capital in small high tech. firms is anotherform of cooperation.

iii. Manufacturing cooperationFirm can build up the partnership for manufacture the end product.

Availability of S&T indicators is important to measure the S&T capability of the country.National Science Foundation (NSF) does a fairly good job by tabulating such data. NSFwork should be extended to provide a comprehensive analysis and to set a benchmark bylooking at the performance of organizations of other countries. This will help R&Dorganizations to set their target and measure their performance.

5.3 Universities R&D Institutes in Technology Development

R&D activities of universities and R&D institutes provide a major contribution to thetechnology development of country. In addition to R&D activities, universities contributeto technology development by producing the required human resource base.

5.3.1 Contribution of Universities for Technology Development

Even though Sri Lankan universities provide valuable human capital for country’stechnology development, contribution is at a lower level compared to develop and othernewly industrial countries. Only three Sri Lankan universities have Engineering Faculties



(excluding Open University). According to statistics of University Grant Commissionabout 60% graduates are from non science/technical disciplines.

Major emphasis of Sri Lankan universities is on undergraduate teaching while lesspriority is given for research. Majority of the postgraduate courses are part time taughtcourses which do not produce valuable research output. Even though there are someresearch activities carried out in the universities, R&D output is at a very low level. Thissituation is evidenced by the universities’ share of the patent which had been less than1%. In order to bring the university research to acceptable levels, universities shouldsuccessfully face the following challenges.• Difficulty in retaining and recruiting best graduates in the academic staff • Doctoral degree holders from west do not return back (Brain drain)• Red tapes, Bureaucratic hurdles• Lack of research funding• Less opportunities for publications

Table 4: Graduate output of Sri Lankan universities by academic stream

Faculty / Academic Stream

UN

IVE

RSI

TY

Yea

r

Art

s

Man

agem

ent

Com

mer

ceL

aw

Scie

nce

Med

icin

e

Den

tal

Vet

erin

ary

Med

icin

e

Agr

icul

ture

Eng

inee

ring

Arc

hite

ctur

e &

Qua

ntity

Sur

veyi

ngC

ompu

ter

Scie

nce

&IT T

otal

TO

TA

L

GraduateOutput

199520002001

159036563256

6216461601

285802766

140173182

84412641052

442904801

667771

37

70

226249365

458548653

565579 _

420693748896

(Source: Sri Lanka University Statistics, University Grant Commission, 2002)

Course of Study University NumberMSc in Computer Studies UCSC, UOK 200

MSc in IT UCSC 100BSc sp. UCSC 120

BSc IT Honours UCSC 40BSc IT UOM 50

BIT UCSC 5000BSc General with Computer

StudiesAll universities 1000



Abbreviations: University of Colombo School of Computing [UCSC], University ofKelaniya [UOK], University of Moratuwa [UOM], University of Peradeniya [UOP],

University of Colombo [UOC], University of Sri Jayawardenapura [UJP].

Until the recent past there has not been much interaction between the universities andindustry. This may be one of the reasons for low level of research in the universities.During past few years some initiatives have been taken to build up the relationshipbetween universities and industry. Some of the examples are:• University Industry Interaction Cell, University of Moratuwa• Design Centers (University of Moratuwa, University of Peradeniya)• Ruhuna Business Incubator (Collaboration with University of Ruhuna) • Faculty/department – industry consultative boards

Presently, these bodies are at their infant stage and mainly provide existing knowledge ofthe university academics to industry in the form of solutions for some industrial problemsand continuous education rather than developing new technologies for the industry. Byrecognizing the importance of university-industry interaction, Science and TechnologyPersonnel development project funded by ADB has funded many of these university-industry interaction bodies. In addition to above forms of university-industry partnershipwe to give serious thought for a Science/Technology Park in the near future.

5.3.2 Technology Management Education

Improper management of technology is one of the key reasons for retarding thetechnology management of any country. Neither engineering education nor managementeducation recognized the importance of technology management until 1998 in Sri Lanka.In 1998, University of Moratuwa under the Department of Management of Technology(MOT) took an initiative to train future technology managers of the country.

Management of Technology has been introduced as a subject at undergraduate level. Aspecialized MBA degree program in Management of Technology has been started in2001 and now this program has two batches. This program comprises of a number ofTechnology Management subjects such as Technology Transfer, R&D and InnovationManagement, R&D Commercialization, Technology Policy and Social Shaping ofTechnology. Research degree programs (MSc, MPhil and Ph.D) in TechnologyManagement, short courses and executive diploma (proposed) are some of the activitiescarried out by the Dept. of Management of Technology, University of Moratuwa todisseminate the knowledge in Technology Management.

5.3.3 Contribution of R&D Institutions for Technology Development

There are about 20 R&D Institutions in Sri Lanka according to the National ScienceFoundation listing in Sri Lanka. In addition to these R&D institutions, about 10professional and S&T support institutions are operating in the country. Even though theseprofessional and S&T support institution are not directly involved with the R&D



activities, they make a valuable contribution by providing research funding and operatingS&T journals for the publication of research outcomes.

About one quarter of the R&D institutions are mainly dedicated to agriculture basedindustries. Only a few research institutions are dedicated to engineering and moderntechnologies. During 1994-1997 periods, there were 94 international publications fromSri Lankan R&D institutions (NSF statistics). 45 out of 94 were published by theIndustrial Technology Institute (ITI – former CISIR). Public funded research institutesown only 6% of the patents registered at NIPO 1980-1998. Again it could be noticed thatthe majority of the patents are owned by ITI (Amaradasa, et al., 2002). The RubberResearch Institute of Sri Lanka (RRISL) is another contributor of innovations for rubberproduction and processing technologies. The World Intellectual Property Organizationhas awarded the “Scientist of the Year 2000” Gold Medal to Director of RRISL in therecognition of the number of implementable patents produced by himself and hiscolleagues. Looking at the R&D performance of the institutions, it could be noted thatfew organizations are dominating. Lack of commercialization is another weak area of thelocal R&D institutions.The following common problems can be identified as the major factors which degradethe performance of local R&D institutions.

Factors hindering local R&D activities Limited funds for R&D Poor access to knowledge (lack of IT facilities) Non-empowerment of researchers

Factors hindering commercialization No clear commercialization policies Lack of information about market signals Slow response due to bureaucratic structure and rigid policies Lack of commitment of top management Poor relationship with industry

5.3.4 Initiatives to promote technology among school children

The Ministry of Human Resources, Education and Cultural Affairs has planned toprovide computer laboratories in 800 schools, many in the rural areas.

Both the Government and the private sector have launched a number of programs incomputer and information technology field through which the usage of IT has beenwidespread in many crucial sectors.

Computers have been introduced to schools and computer education facilities areavailable in both public and private sector educational institutions. The Internet usage isbecoming popular by day and Internet service providers are looking forward to acompetitive and lucrative market.



Education reforms presently being implemented emphasize on the importance of schoollibraries and also on inculcating information skills among school children. The marketeconomy demands youth with high IT skills. Rural electrification schemes enable newtechnology to reach all parts of the country.

6. Implications of the use of Technology to eradicate Poverty In the era of globalization, new technologies are rapidly reshaping the livelihoods ofpeople throughout the world. The pace of technical change is increasing and it is beyondthe capacity of society to understand and manage its impact.

Technical change has helped people in their daily battle for survival. New and improvedtechnologies can help people living in poverty improve their livelihood options, increaseproductivity and incomes, improve the quality of goods and services that they use, andenhance the quality of their lives if technologies are used in ways that are appropriate totheir context and needs.

Despite the potential of new technologies to change the livelihoods of people living inpoverty they have limited access to appropriate technologies as well as information andknowledge about technical options.

From a long-term perspective, people living in poverty need to be able to adapt and selectand use the technology that suits them according to their own discretion.

The president of India, Abdul Kalam once said, “I will drive away poverty with the helpof technology”.

Technology innovation is vital for growth and poverty reduction in developing countries.Many of the technologies most important for the needs of the poor do exist, but they arenot accessible to them.

6.1 The implications of technology transfer on poverty reduction

International technology transfer through Foreign Direct Investment (FDI) or trade doesnot necessarily have a poverty reduction impact. If the technology is not used effectively,without analyzing the context and the needs of the people, then this form of technologytransfer has little bearing on the technology needs of poor men and women.



To enable the development of technological capabilities that will meet the needs of thepoor, public support for pro-poor R&D and the regulation of trade and investment isessential.

To facilitate these measures, efforts should be taken to provide financial and technicalassistance to developing countries, support for building R&D capacities in developingcountries and by ensuring that international and national regulatory frameworks includingthe regulation of trade, investment and intellectual property rights regimes, enable thedevelopment of technological skills in developing countries.

6.2 Constraints on technology transfer

Foreign Direct Investment (FDI) and International trade are the main modes oftechnology transfer. Technology transfer in the form of Foreign Direct Investment (FDI)increases the capital stock within a country and spreads new technical knowledge to otherfirms.

Though there has been a massive increase in the levels of Foreign Direct Investment(FDI) and expansion in international trade in recent years, the evidence that as a form oftechnology transfer they have beneficial effects for local firms and poverty reduction isfar from conclusive.

Foreign Direct Investment (FDI) is limited to select regions in the world such as Asia andLatin America and therefore the assumption that a majority of developing countrieswould benefit is remote.

The legal environments that exist in developed countries don’t facilitate the transfer oftechnology to the developing world.

Evidence has suggested that technology transfer does not diffuse to other firms in therecipient country but rather payments were made from subsidiaries to their parentcompanies according to a report by UNCTAD in 1997.

6.3 Technology transfer and poverty reduction

Technology is recognized as a major determinant of economic growth. Yet, the evidenceis at best inconclusive on whether technology transfer contributes to growth and povertyreduction.

Poverty continues to be the experience of billions of men and women who are excludedfrom old and new technologies alike. 2 billion people do not have access to modern, safeforms of energy supply, 1.5 billion people live in inadequate shelter, 1 billion people still



have no access to safe water, 2.4 billion people have no access to sanitation and 800million remain chronically undernourished. The irony is that the technologies to meet these needs are available in developingcountries, but they are not accessible to the people who need them most.

The fact that international technology transfer has no direct link to poverty reductionstems from the reality that most poor people do not depend on employment in the formalsector, where Foreign Direct Investment (FDI) is directed. The livelihoods of the greatmajority of the poor people in developing countries depend on micro and small scaleenterprises.

An understanding of the relationship between capability and human development iscritical to making technology transfers applicable to poverty reduction. A certaincapability to absorb, select and adapt technologies to local settings and to develop newtechnologies through local innovation must be present for effective technology transferacross all levels, household and national levels. At the house hold level this means athorough knowledge of information systems and integrated social networks as well aslocal knowledge. At the national level, this involves a national framework that considersinnovative systems accommodating a range of institutions and policies.

The key focus should be on integrating national technology policies and innovationsystems with poverty reduction strategies.

Participatory technology development has shown to be effective as a means of choosingthe most appropriate technology.

Enabling access to new technologies consists of making more productive technologiesavailable through technology transfer and providing an environment which includesinstitutional and financial support to marginalized people. The vital factor is not just bringing new technologies to the door step of the people butaddressing their organisational, management and marketing skills, opening new channelsof information and knowledge and making credit and markets more accessible.

6.4 Implications for policy makers

Policy makers should recognize the importance of technology as a means of reducingpoverty, but should always focus on the fact that in itself technology cannot eliminatepoverty.

Technology should be adopted after analyzing the specific needs of communities, thelevel of acceptability on the part of the community to use technology and by targeting itspecifically towards the pro-poor population in order to eliminate poverty.



The impact of technologies on the poor can be explained in different ways. Technologiescan foster economic growth if they are directly relevant to the lives and needs of the poorin their communities.

Technologies on the other hand, could marginalize the poor because of the latterunfamiliar ness with the technology. Recent research has revealed that Internet access iswidely spread in the Western Province in Sri Lanka compared to other provinces wherecomputer use is not very popular.

Policy makers should particularly note the fact that in order to effectively combat povertythrough means of technology an analysis of the particular needs of the poor is essential.Technology can only address the information and communication needs of the poor.However, poverty exists because of a wide range of factors, of which lack of relevantinformation and facilities to communicate are but one. Thus, the effective use oftechnology will not completely eradicate poverty. However, it might help to reducepoverty to a certain extent depending on the ability of the technology used to address theparticular information and communication needs of the poor.

Importance should be placed not on technology in itself, but on the specific user and theirparticular needs. Technology should be implemented in any context by taking these intoconsideration.

6.5 Implications of technology change for people

Poor people have limited assets and are particularly vulnerable to social, political orenvironmental factors. They may have limited access to markets. The use of technologyincreases production, so there is no point in introducing technology if they have limitedaccess to markets. There is little point in providing electricity if user charges are going tobe unaffordable.

Technology change at the micro level undoubtedly can contribute to poverty reduction,whether through poverty increases or quality of life changes. However, a one-off changein technology is not enough. The need to enable men and women to continue to adapt anddevelop technology in response to the changing circumstances that they live in is ofparamount significance.

Adoption of new technologies should also focus on upgrading the skill and capabilities ofthe user. This will enable poor people to make the choices that they want to.

The relationship between the capability to make technological change and humandevelopment is the key to understanding how technology can be made to contribute topoverty reduction.



6.6 Framework

The above framework identifies the factors that influence poverty reduction.

Needs of the poor

Povertyreduction

Context Technology

Economicgrowth

NewTechnologies

GovernmentPolicies



New technologies have a significant impact on economic growth which in turn leads topoverty reduction. Though economic growth prompts gradual elimination of poverty,other factors if not addressed at the outset will halt the progress made to eradicatepoverty.

These factors include the context within which the poor are based, their specific needs,government policies such as macroeconomic management and the proper management ofthe technology that is introduced as a measure of poverty reduction.

The needs of the poor and the contexts within which they live are different acrosscountries and even within the same country. The factors that propel them towards povertyare also significantly different. Thus, the necessity to consider these factors in theadoption of technology is crucial.

Maintenance and training the poor to make vital decisions about the use of technology areimportant to ensure that technology is used effectively. This will mean that technology isadapted to the specific contexts of the poor and will give greater benefits to them in thelong-run. 6.7 Concluding remarks

• Sri Lankan history in Technology Development was not so successful. Prior toindependence it is obvious that the state deliberately ignored technology issues whichare not the domain in plantation agriculture. But after independence, the mostsignificant reason for the failure was a lack of high level political commitment andsupport for the R&D activities.

• After the 1977 economic reforms the government has taken considerable effort todevelop the country as a newly industrialized country based on S&T. Due to matterssuch as lack of improvement of the conditions of S&T community, non developmentof proper S&T policy framework, lack of a S&T culture and uncertainties broughtabout by the ethnic conflict, the effort for S&T development was not very successful.

• Sri Lanka R&D expenditure is well below the recommended value for developingcountries; R&D is much labour intensive.

• There is a growing interest in obtaining patents. Organized sectors are weak inobtaining patents.

• Due to the poor living condition of the S&T community, many graduates from S&Tdisciplines seek employment in other fields and qualified S&T professionals leave thecountry.

• Still the majority of the university graduates are in non-S&T disciplines. Lessemphasis is given for research at university level. In the recent past some initiativeshave been taken for university industry interaction.

• In terms of Technology indicators some R&D institutions are dominating others.Lack of commercialization of R&D is a major problem in all the institutions.

• Despite the fact that technology can be used to eliminate poverty, other means shouldalso be analyzed before technology is adapted to any context.



• The disadvantages of using the technology should be taken into consideration beforeit is implemented. The implications of factors such as costs should be closelyanalyzed as the target group are living in poverty and the consequences of ignoringcrucial factors such as these could be severe.

• The particular needs of the people, what knowledge is needed to use it, as well as howto maintain technical systems should be addressed before implementation.

• Technology should be implemented in such a way that it will not serve to be a barrierto the day to day lives of people living in rural communities.

• Sri Lanka should develop the acquisition, adaptive, operative and innovativecapabilities in line with the country’s factor and resource endowments. Whileacquiring the technology all the components of technology such as techno ware(machine embodied form of technology), human ware (human embodied form), infoware (information embodied form) and orgaware (organization embodied form)should be obtained to gain maximum benefits and to create national technologycapabilities.

• •

6.8 References

1. Amaradasa, R.M.W., De Silva, M.A.T., and Pathirage, R.P. (2002) Patents in a SmallDeveloping Economy: A Case Study of Sri Lanka, Journal of Intellectual PropertyRights, Vol. 7. 395-404.

2. APCTT (1986) – Technology Policies and Planning Sri Lanka, Asian and PacificaCentre for Transfer of Technology.

3. Goonalitake, S., (1976) Technology and the Societal Context, Engineer, March, 30-40

4. Gunawardane, R.P., (2000) Master Plan for Industrial Development – a welcomemove, Daily News, January 28, 2000

5. Mendis, D.L.O., (1974) Technology of Development and the Underdevelopment ofTechnology in Sri Lanka, Proceeding of the 31st Annual Sessions of the Sri LankaAssociation for the Advancement of Science.

6. Needham, J., (1956) Mathematics and Science in China and the West, Science andSociety, Vol. 20.

7. NSF Unpublished Reports8. Science and Technology Statistical Handbook, 19969. Sri Lanka University Statistics, University Grant Commission, 200210. Wijesekera, R.O.B., (1976) Scientific Research in a Small Developing Nation – Sri

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