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Trends, Challenges and Opportunities Trade and patterns of technology flows Trade can play a key role in technology transfer. An OECD study concluded that international technology transfer through trade occurs when a country imports higher-quality intermediary goods (i.e. than it can produce itself) to use in its own production processes and that trade indeed serves as a channel for international technology transfer to developing countries. The study also underlined that developing countries enjoy relatively less technology transfer from trade than developed countries (OECD 2005). The role of trade in technology transfer is further illustrated by Glachant (2013) in Box 7. Box 7. Examples of market channels for technology transfer • International trade in intermediate goods. The import of capital goods, such as machines and equipment, entails technology transfer where such goods embody technologies which can bring productivity benefits in the recipient countries. Although international trade induces little cross- border transfer of knowledge there may be knowledge spillovers in the recipient country. Local firms can reverse-engineer imported products, or acquire knowledge through business relationships (e.g. as customer or distributor) with the source company. As an illustration, China has acquired production technologies to develop a highly performing solar photovoltaic industry by purchasing turnkey production lines from German, US and Japanese suppliers (de la Tour et al. 2011). • Foreign direct investments (FdI), including joint ventures. FDI is an important channel for technology diffusion, such as in the wind industry (Kirkegaard et al. 2009). Several studies find evidence that multinational enterprises transfer firm-specific technology to their foreign affiliates or partners in joint-ventures (e.g. Branstetter et al. 2006). FDI can induce more knowledge transfer than trade in goods, since investment often comprises apart from the technology, also support services, such as management experience and entrepreneurial abilities which can be transferred by training programmes and learning-by-doing. Further, many technologies and other know-how used by affiliates of multinationals are not always available in the open market. Some technologies, even if available in the market, may be more valuable or less costly when applied by the firm that developed them rather than by an outsider (OECD 2005). Local firms may also increase their productivity by learning from nearby foreign firms or becoming their suppliers or customers. • Licensing. Licensing occurs when corporations or public research bodies grant a patent license to a company abroad that uses this license to upgrade its own production. In other words, a firm may license its technology in order to carry out a full knowledge transfer to the licensor so as to enable it to exploit the technology directly. Accordingly, knowledge leaves both the source country and the source company, and remains in the hands of a local third party. Source: Glachant 2013 It is important to highlight the changing patterns of technology flows and transfers and the growing importance of South-South technology transfer in ESTs. Today’s technology flows and transfer differ greatly from those in the early 1990s, when technology flows were mainly between developed countries and the key challenge was to promote greater technology transfer to developing countries. While these flows remain important, South-South clean technology transfer has gained in prominence over recent years. Clean technology flows among technology intensive developing country industries and from developing countries to developed countries have grown faster. Highly publicised examples include ceramic cookstoves, biogas digesters, cement board and jatropha biofuels, and a range of Chinese and Indian FDI activities. In addition, capacity building constitutes an integral part of technology transfer, as it ensures the successful transfer of clean technologies (UN 2012d). Not only the overall magnitude, but also the nature of cross-border technology flows has changed. Technology flows are increasingly embedded in global trade and FDI flows, thus forming part of international production systems, even though there are significant regional differences. Environmental services, such as waste and water management and the reduction of air pollution and GHG emissions, are also becoming a major source of technology transfer. In terms of the manufacturing and export of clean technology, several developing countries have become world leaders, and some are also emerging as key users (UN 2012d). 231 Renewable EnergyPDF Image | Renewable Energy
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