Chapter

Tribulations of Technology Transfer

Alice H. Amsden

in The Rise of “The Rest”

Published in print February 2001 | ISBN: 9780195139693
Published online November 2003 | e-ISBN: 9780199832897 | DOI: http://dx.doi.org/10.1093/0195139690.003.0003
Tribulations of Technology Transfer

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In theory, technology transfer should enable a backward country to achieve world productivity norms, but in practice, because technology is ‘tacit’, and never completely codifiable, the best technology transfer rarely achieves productivity parity between buyer and seller. The more tacit a technology is, the more difficult it is to transfer, and the more monopolistic the power of the seller and the lower the skills and organizational capabilities of the buyer, the worse the transfer. A shyness of foreign investors left the successful late industrializing countries (the rest) with a serious skill deficit that grew over time relative to that of the North Atlantic and Japan. The tacitness problem arose early because of the sectoral composition of the manufacturing output of the rest; whatever the source of manufacturing experience, all countries tended to share the same sequential industry mix based on natural resources, and because the specific properties of a natural resource vary by location, a successful technology transfer requires substantial investments in local learning and adaptation. Japan set a benchmark for learners that began with technology transfer; it started to industrialize rapidly only in the 1890s, at about the same time as China, and slightly after Brazil, India, and Mexico, but, given its engineering capabilities and basic knowledge, its absorption of foreign know‐how was more proactive, systematic, and thoroughgoing than that of other countries, and is analysed below in the case of the silk industry.

Keywords: Japan; investment; late industrialization; newly industrialized countries; North Atlantic; silk industry; skill deficit; tacitness; technology transfer

Chapter.  8409 words. 

Subjects: Economic History

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