TRANSFER OF TECHNOLOGY: ISSUES AND
                                      POLICIES.
                                       &M. wangwe:"
    1.0 INTRODUCfION
   Technology is here idenufiedas haraware ot production (knqwledge about macl;tine,
  .and processesj and software (skIllS, knowledge and proceduresof performinglrr~c~j-
   cal tasks). As pointed out by Cooper (1972), technology involves not merely the syste-
   'matic application of scientific and other organized knowledge to practical task!
   buf.also the social and economic <>tmosphere with~n which such application haS to
   take place
          The less gevelopea countries (LDCa) seem to believe that they could Illike                       aroat
   Jumps in production by using technologies which had already been <leveloocd ..in
    the advanced co.untrie~ Such transfer ot tecimology would permit LDCs to u",-
    high PlOuuctivity techniques without tuemselves gOIng through the diffil.:ult l:Lnd
    t'ostlv process of designing, testing and develoning them. These expectation!; were
    partly encouraged by experiences m the llJth century where technology was su~ss-
    fully transferred from Britain to the USA and Germany. Bhatt (1975) has clearly
    discussed the ways in which the technology problem currently differs fromiliat
    faced by the 19th century developing countries ..
          The dependence of the current LDes on technology from advanced COllntries.
    is evident from the high ratio of imported teChnology to the production needs of
   the LDCs. the need to import this technology in the absolute sense. and the one-way
    flow of technoiogy without the ability to engage lU Its exchange. The effects 01 this
 .unsatisfactory relationship with advanced countries have generated concern in the
   lDC;::s. 'htese effects are briefly surveyed in s:::ction two (1" the mam is"ues in transler
   of technology today. In section three the possibilities of developing a local,techno-
   logical capacity are considered.
    2.0. 'MAIN        ISSUES      IN THE TRANSFER               OF TECHNOLOGY
          Transfer of technology has been associated with various problems in LDCs.
    fhe form that transfer of tecQnology has taken from the advanced countrieS'to the
   LDes has largely deprived the latter of autonomy in decisions. The structure oj
   the market for technology is such that the LDCs are the losers and the technologies
   acquired from advanced countries are not suitable in one way or another. To these
   issues we now turn.
   2.1 LACK OF AUTONOMY                        IN DECISIONS
          The fact that the decisions about choice of technology in LDCs are l}suafly
   made by the advanced countries has raised concern. This concern is even more
  justified when lack of autonomy in technological decisions results in lack of autono-
   my m most of the determining variables (e.g. investment .. pnces, sales, purchases)
 • Al:l earlier version of this paperappeared  in the Journal of Econo'll.is Reflection: Issue No.4 AUJU't 1978
*-; Senior    Lecturer, Departmei:lt of Econormcs, University of Oar ell Salaam.
                                                           3


 S. Wanpe--1Mues aad Polilies
       Lack of autonomy in decision making is most glaring in cases of private foreign
 investments. The foreign investor will tend to choose technology which is most
 familiar to him and this will normally be from his country of origin. If the enterprise
 is a subsidiary of the multinational co'mpany, the choice of technology is conditioned
 by the mtemational character of their technological activities and the neceSSIty
 to standardize technological activities. across borders. In addition to this control
 over technblogical oecIsions, the foreIgn Investor controls all ather decIsions which
 are normally taken at enrerprise level. These include, for' instance; decisions on
 amount and nature of investment, prices, output, source and nature 'of inputs,
 quantity and destination of output and allocation of profits .•
       One reason for the emergence of joint ventures is the desire to have access to
 the decision makfug process with respect to some. of the crucial variables that are
 determined at enterprise level. Even in joint ventures, Subramanian (1972) finds
 that in India foreign firlns bave managed to dilute ownership-mix in such a way
 that they remain in control. UNCT AD (1975) attributes this phenomenon to the
 existing asymmetry of technical knowledge and skill; especially for skills that come
 mostly from practice and learning by doing.
       In the light of the results trom both foreign investment and .ioin~venturell the
  LDCs have in some cases opted for total local ownership so as to have total control
 over all enterprise level decisions except probably those which are specific to tech-
 nology bought from abroad. As a consequence of lack of sufficient technic;:!lknow-
  now mese tpmlly l~lly-ownea nrmsplunge themselves mto technical management
  agreements and or licensing agreements. The import of foreign techno log) some-
 how includes 'clauses determining variables such as: source of machinery and other
 mputs, spare pans, prices, outPlii, exports, restrictions on local research and develop.
 ment (R & D). The findings by Sercovifh (1974) in Argentina, Subramanian (1972
 in India, and Kuuya (977), CoulSon (1972, J 977). and Baregu (1978) in
 Tanzania ~howthat most ot the power of independent decision making is taken out
 of the hands of the local ownership and management.
2.2 THE STRUCTURE OF THE MARKET FOR TECHNOLOGY
      Modem industrial activities tend to be highly specialized. Such specialization
in technological activities is sufficient to allow ~ degree of appropriation by individual
firms to the exclusion of their competitors or of new entrants. Successful appropria-
tion of technology attributes a market value for technology. The sheer volume of
technological information, the fast rate at which it grows and the high degree of
specialization in its generation and use in world industry cause imperfections in its
supply. In fact even where di1ferent techniques may be available in the technology
market the process of merely finding o~t what alternatives existS is costly. The buyer
may not be willing to incur these search costs beyond reasonable limits.
      The system of commercialization of technology has permitted quasi-monopo-
lies in the technology market hence the sale of technology at a high price. UNCf AD
(1972) has estimated the direct costs involved in overt technology transfer. The
estimated costs of payments for patents, licenses, knowhow, trade marks and techni~
                                                4


                                                             Utafiti—Vol. 4 No. 1 July 1979
cal fees were $1500 million in 1968. These figures exclude costs of technology
inherent in under-invoicing and over-invoicing of goods and services and the payment
for foreign personnel. In addition to these direct costs there are also indirect costs
which take many forms. Probably the most common is that of tying the purchase
of imported inputs, machinery and spares to a particular source. Other indirect
costs arise from the restriction of exports, limitation of competing supplies, dis-
couragement of use of local personnel and last but most important is the discourage-
ment of generating local technological capabilities. The technology suppliers making
transactions in technology in favour of the more informed party exploit the quasi-
monopoly situation through simple direct sales of technology, process packaging
and even project packaging.
2.3. INAPPROPRIATE TECHNOLOGY
      The issue here is that imported technologies may not be suitable for the LDCs
environments. Rosenberg (1976) indicates clearly how the history of technological
 development shows that new techniques and processes were developed in particular
industries and in particular environments. The technologies which have been deve-
loped in the advanced country structure of resources and environmental factors
may not necessarily be suitable for the LDCs structure of resources and environment.
The imported technologies may be inappropriate with respect to scale of production,
resource use, climatic conditions and consumption technologies.
2.3.1 SCALE OF PRODUCTION
      In advanced countries technologies have become increasingly large scale and
increasingly specialized. Stewart (1977) clearly illustrates the increasing size of firms
 and plants in recent years in the U.S. and U.K. This increasing scale encourages
 technical changes designed for the new forms of organization, so that they can only
 be operated by large and specialized units. In fact Worley (1962) demonstrates that
 large firms account for a more than proportionate share of research and development,
 devoting it to technology suited to large scale production.
      Stewart (1977) shows that with much lower income per capita, the size of the
 market in most LDCs is only a fraction of that of the U.K. market. Thus even
 those industries which are efficient at a relatively small scale in advanced countries,
are large in relation to LDC markets. As a result in many lines of production one
 plant is often more than sufficient to cater for the entire market. Production therefore
 tends to be monopolistic and centralized. In the case of Tanzania, Wangwe (1977)
 has argued that this is one of the causes of excess capacity to be found in manufactur-
 ing. For instance under-utilization of capacity in Mara dairy plants. Steel Rolling
 Mills, Metal Box and the General Tyre is of this type. The small markets are frag-
 mented further by the inadequate conditions of transport. An inadequate transport
 network or a low capacity to distribute goods in the whole economy may call for
 small size plants to be spread in the country. In this sense large scale technologies
 usually turn-out to be even more inappropriate e.g. in Tanzania cement production
 centralized in one plant has left many areas up-country without cement.


s. W.npe-llsues     andPolieiee
2.3.2.   RESOURCE   USE:
       The appropriate technOlogyispartly identified in relatIOnto the types of resources
which the technology uses. These resources include labour, machinery and material
inputs.
      Rosenberg (1976) argues that the de:velopment of technologies has tended to
economise on expensive resources. The type of technologies developed in a county
largely reflects the SlI'ucture of resources available in the country. Since the LDCs
hardly develop their own technologies they often have no choice but to use those
technologies which have been developed in the advanced countries. Such technolo-
gies are'more in line with the advanced country structure of resources than with
 the resources in the LDCs.
       Technologies imported from the advanced countries and used in LDCs have
 often been capital intensive. This is appropriate in high-income countries since a
high investment per head can be afforded. In capital scarce LDCs, the use of capital
intensive technologies does not reflect this scarcitv.
      Techniques designed in the advanced countries have assumed high levels of
labour skillsand literacy at all levels. This is in line with the vast growth in educational
and training expenditure in those countries. Lack of such a high level of education
and training in LDCs necessitates the importation of skilled manpower along with
the hardware part of technology.
       Advanced country techniques usually require inputs from the advanced coun-
 tries. In fact Stewart (1977) argues that there are all sorts of links between different
 techniques. In some cases the technique requires inputs of a particular quality and
specification. Kuuya (1977) shows this clearly in the case of cement and other indus-
tries and Coulson (1977) shows this in case of the fertilizer company in Tanzania.
 2.3.3.  CLIMATIC  CONDITION~
 Differences of temperature, humidity and seasons lead to differences in natural
vegetation and in conditions of production. These differences affect agriculture
most and attempts to transfer agricultural techniques unmodified are likely to
fail. These climatic differences are also capable of affecting processing, manufacturing
and construction technology.
2.3.4. CONSUMPTION TECHNOLOGIES
      Studies of the history of technological development in America and Britain in
the 19th century point to the importance of the composition of consumer demand
and the malleability of consumer tastes of production technology. Final product
mnovations required some innovations in the production technologies. Production
technologies, particularly in Britain were shaped to meet consumer tastes as indicated
by Rosenberg (1976). The consumer demand in such advanced countries is a function
of cultural and economic factors. On both counts the underdeveloped countries
differ substantially from the advanced countries whose production technologie~
presuppose certain patterns of consumer demand i.e. consumption technologies.
In this sense, choice of production technology is to varying degrees choice of product
by type and/or quality and vice versa.
                                               6


                                                               Utdti-VoL   4 No. 1 1 .....
        In fact almam .:::harge against import substitutIOn industrialization is that it ha,
 concentrated on wrong products in that they embody technological characteristics
 that are either unnecessary. undesired or too costly e.g. nylon shirts are uncomfor-
 table in heat. yet they are. prOduce~ and pUt on in the tr?pICS, maize milling in comp:
 lex automatIc rollers whd~ rem0.vmg much of the nutntious content are less appro-
 priate than the hammer mills whIch they replace as Stewart (1972) hasdemonstrated.
       The foreign technologies may therefore have been developed to suit foreign
 consumption patterns yet the very proces~ of importing these production technoloBies
 carries. along the consumption technologies which they embody.
       It should also be noted that international       trade also supports this tendency
 because a country must ofter Internationally        acceptable standards of manufactures
 to compete in international         markets.
 3.0 STRENGTHENING              THE LOCAL TECHNOLOGICAL                  CAPACITY
      The brief summary of the main issues in the transfer of technology points out
 that there is need for an approach requiring policies at two interrelated levels.
 One set of policies would seek to establish a new set of international norms to bring
 about a more equitable sharing of the benefits between the underdeveloped countries
 and the developed countiresfrom         the transfer of technology. This set of policies is
 usually covered under the international         code of conduct and the reVision of the
 industrial property system. The other set of policies would have the' aimof streng-
 thening the capacity of the underdeveloped          countries to acquire, use, adapt and
 generate technology that meets their needs. This section deals with some aspects
 of this second set of policies .•
 3.1. THE ENGINEERING               SECTOR AND LOCAL TECHNOLOGICAL
 CAPACITY
      That an underdeveloped country lacks autonomy in decisions referring to tec.h-
 nology is due to the fact that a large proportion of production techniques in use
is acquired from advanced countries. This is bound to be the case bec8use while
 the advanced countries have the capacity to generate production techniques the
underdeveloped countries lack. this capacity largely because of the absence of capital
goods sector which is responsible for generating technology primarily in the form of
capital equipment and mac-hinery. In fact McLean and Round (1978) have found
'that the producer goods industries are relatively more innovative than the other
industries. In addition, the producer goods industries show the closest links between
R&D inputs and product innovativeness. Lack of autonomy in technological deci-
sions is not a deliberate option by an underdeveloped country rather it arises from'
the underlying structure of production in these countries.
      That the world market for technology is monopolistic and advantageou~ to
the seller follows from the fact that the seller has the capacity to produce the tech-"
nology while the buyer does not have this capacity. Technical know1cd~e is not
readily available and technOlogy is effectively appropriated to some ~            1D ~y
all cases. Under the capitalist economies it is this exclusion and appropnatlOn which
                                                7


 S. Wanpe-Issues     and Policies
Transfer 11
 leads to quasI-monopolIes whose superpronrs act as an mcentive for industrial innova-
 tion. Cooper and Hoffman (1977) argue that the existence of an international market
 for technology implies that Paretian optimality in the production and use of tech-
 nology in the world economy is strictly unattainable. They conclude that national
 LDC governments have to intervene in transfer of technology. One form which
 such intervention could take is the development of local technplogical capabilities
 by developing the engineering industries. These can be responsible for generating
  local technologies andad.1a Dung foreign technologies to local conditions ..
       The use of inappropr'iate technology arises because wis technology has been
  developed in a different environment to solve a different set of problems. The tecn-
  niques were developed and perfected in response to the demands of specific customeps.
  The experience of the advanced countries shows that physical proximity between
  the producer and the user of machinery seems to have been indispensable for reasom
  rooted in the problem of communication as has been indicated by Rosenberg (1976).
  Successful technological development seems to involve a kind of interaction tha'
  can best be provided by a direct confrontation between the user of a machine and
  the producer who is thoroughly versed in problems of machinery production and
  who is alert to possibilities of reducing machinery costs. This requires that producers
  of machinery and the users of these machinery be in the same environment. However
  in a country like Tanzimia we have users of machinery but we don't have any signifi.
  cant number of producers of machinery. The root cause of the use of inappropriate
, technology therefore primarily lies in the production structure and only secondarily
  in the bad choice of imported technology.
       The little experience Tanzania has had in the manufacture of capital equipment
  indicates that although in most cases the designs were copies from some imported
  models the interaction between users and producers of these technologies has re~ulted
   in modifications to make the technologies more appropriate. Cases in point are the
  manufacturers of hammer mills and farm implements who have made a number of
  modifications in the light of the customers' response and the environmental factors.
  The interaction between engineering and the user of technology appears to be closer
  when the engineering activity (i.e. central workshop) .is attached to the user of tech-
  nology (i.e. the main plant) as Collande and Wangwe (1977) have argued.
        The interaction between the user and the producer of technology cannot be
  expected to occur so long as almost all production technology is imported from the
  advanced countries. The users of technologies in a country like Tanzania cannot
  influence the decisions of the producers of production technologies in the advanced
  countries. After all about 98~()of current R&D efforts takes place in advanced coun-
  tries and the LDCs market for machinery is too small to influence the machine manu-
  facturers in the advanced countries (Stewart 1977)..
        New techniques frequently require considerable modification before they can
 functionlsuccessfullylin a new environment. This process ofmodification,often~nvolves
 ~ high order of skill and ability which is typically underestimated or ignored. Yet
 the capacity to achieve these modifications and adaptations is critical to the successful
 transfer of technology - a transfer which is erroneously' thought to be a matter of,
                                              8


                                                             Utefiti—Vol. 4 No. 1 July
transporting a piece of hardware from one location to another. The ability to under-
take modifications and adaptations of technology requires facilities on which to
work. The creation of a capital goods sector is regarded here as the creation ot an
important aspect of the facilities on which modification, adaptation and generation
of technology can take place.
3.2. THE ENGINEERING SECTOR AND LEARNING-BY-DOING
      A major reason for a domestic capital goods industry is that the ability to utilize
complex machinery effectively whatever the country of origin of the machinery
depends on the kinds of skills which such an industry uniquely makes available.
Many of the technical skills however are acquired through direct on-the-job partici-
pation in the work process. Since this includes a large component of uncodified
skills, such-skills cannot be transferable easily through formal education. In*this
case learning-by-doing becomes crucial to the acquisition of those skills.
      Arrow (1962) has proposed that the installation of capital equipment provides
the vehicle for learning in the economy to the extent that a cumulative gross in-
vestment' has been made the measure of experience. It should be noted that this
proposition holds only if installation of capital equipment is accompanied by the
experience to manufacture the capital equipment and the transfer of this skill to
the Uaers ol the equipment. It is in view of the crucial role of learning by doing that
Rosenberg (1976) argues that the history of the advanced countries shows that
where transfer of technology involved places geographically distant from one another,
the reliance upon migration of trained and or experienced personnel (at lieast tempo-
 rarily) was very strong.
      Learning by doing is in this case a process of interplay between men and machines
 rather than the passive comtormity of the ordinary agents of production to rules
 and systems laid down by some foreign developers of technology. The learning
process of this type cannot be attained in the absence of a sector manufacturing
 machines (at least as regards the technology of making and or modifying machines).
       Experiences elsewhere support the hypothesis that on-the-job training is an
 indispensable complement to formal training particularly in the engineering sector.
 In his study of Soviet metal fabricating, Granick 1967) shows how the government
 invested heavily in formal technical training in the first five year plan yet by 1933
 it was clear that on the job training had to be accepted as a complement to formal
 education. Even the observed tendency to increase the man-machine ratio was
 intended to maximize on-the-job training. In the case of Brazilian capital goods
 industry Leff (1968) has shown that the industry increasingly became more skill
 intensive and more than 50% of skilled workers acquired skills through on-the-job
 training. A study of the engineering industries in Tanzania (undertaken by the author)
 reveals that shortage of manpower skills seems to be more critical in the activities
 which have been introduced into the sector very recently e.g. moulding, steel casting
 and pattern-making. All these findings show that the learning effects acruing from
 the establishment of engineering industries are substantial. It is not enough to talk
 of scientific and technological manpower development without focusing on the


establIshment of industrial activities which made significant contribution to techno-
logical and innovative skills.
 3:3. THE ENGINEERING                SECTOR AND SCIENTIFIC             INSTITUTIONS
       In order to strengthen the local technological capacity it is necessary to streng-
 then the It & D activities and scientific institutions. It has been noted by Herrera
 (1972) that tl}escientific institutions in the LDCs are not only weak but they are also
 alienated from production activities. Often the scientific institutions are involved
 in research activities which are not closelylinkedto the production activities in the
'1J)Cs. Even when'these institutions QO research and recommend the types ottechn ••
 logies 'required it stilI requires that the recommendeorechnolugies be generated
 To generate such technologies is possible if the production capacity for machinery
  and equipment (the hard ware) exists. In its study of the Colomhian engineering indus-
  tries the Bogota InStitute of TechnologIcal Research (1975) argu~s that as a result of'
  !li.ck of communication between manufacturers of agricultural equipment and
  research institutions, designs and prototypes are not being taken up for commercial
 production. In the case of Tanzania the agricultural machine testing unit at Arusha
  designs, develops and tests the prototypes. fhese prototypes have not been taken
 up for production-by manufacturers like the Ubungo Farm Trripliimen'tsLtd partly
 because of lack ot coordination and partly because 01 an insufficient productive
 capacity on the part of 'manufacturers of farm implements. These findings demon-
 strate that the collaboration of the research institutions with the whole productive
  ;ystem cannot Decomplete in the absence of a fairly developed engineering sector.
 ,..4. CHOICE OF TECHNIQUES AND THE TRANSFER OF TECHNOLOGY
        No doubt in the absence of a strong technological capacity the choice ot tech-
 niques from other countries will be very limited. More often than not the use of
 inappropriate technologies may not be avoided. However, it is recognized here that
 of the limited range of techniques tha~ exist in advanced countries some are less
 inappropriate than ot!1ers. We note that in baking, for instance, one can choose
 manual, mechanical or automated technology. In textiles one can choose technolog)
 of the Mwatex type. the Friendship type, the Kiltex type etc. The choice is limited
 nut the chOicematters,
       David (1975) has observed tha t technological learning depends upon the accumu-
 lation of actual production experience. Short sighted choices of techniques in effect
 .~overn What SUbsequently comes to be learned. ChOIce 01 techmque oecome the
 link through which prevailing economic conditions may influence the future dimen-
 siom:nftechnological knowledge. For instance. an automated technology may requi're
'very htth: operation skill besioes switching a iew huttons, The technologIcal learnmg"
 oy-me operators may remam minimal even after many years 01 experience. The
 technological learning effect oartly depends on the type of technique chosen To
 the ~xtent tha~t~chnolOglcall1earningltakes!usnearerlto t>ffdivetranster ofte<,hnology,.
 chOIceof techmques wmch possess potentials for learning ettects are more deslraDl~.
                                               10


                                                             Utifiti—Vol. 4 No. 1 July
       Cooper (1973) has argued that in the underdeveloped countries there is very
 little demand for local engineering goods and services. The imported technologies
 terfd to generate demand for further imports of technology in the form of components
  md spare parts and.even maintenance and repair. This puts an obstacle on the deve-
 iopment of a local" engineering capacity. However, the extent to which this factor
 operates in practice varies with the kind of technology imported. In the bread-
 making industry in Tanzania, the bakeries which are simply mechanized seem to
 obtain many of their parts and components locally fromthe existing engineering firms.
This is contrary to the case of the automated bakery where parts and components
•are too sophisticated to be manufactured locally. The use of the latter technology
 therefore exerts relativelv less (if any) demand for the local engineering products.
 At the Urafiki Textile mills a larger proportion of parts can be made locally than the
 case is for Mwatex, for instance. Even in the same industry it can be observed trTat
tthe type ol technique employed may generate more or less local demand lor engineer-
 ing products. A decision to develop an engineering sector therefore needs to be accom-
 panied by a decision to choose production techniques which can generate demand
 for local engineering products.
       Scale and length of production runs may be an important variable in developing
 the engineering sector to the extent that below a certain level of scale or length of
 production runs it may be too costly to manufacture certain equipment locally
 On this variable, choice of techniques may exert an influence. The more the produc-
 tion techniques are standardized the more economic the production of components
 is likely to be. For instance, it would not be possible to manufacture homogeneous
 sets of looms or parts for all our textile mills because several different technologies
 have been chosen for the textile industry. The decision to go into the manufacture
 of looms would be made relatively simpler if at least many of our mills were using
 not too different technologies. In fact, the failure to implement a proposal to manufac-
 ture motor vehicle spare parts in Tanzania has been partly attributed to the hetero-
 geneity of motor vehicle models that are in use in the country. Choice of technology
 in the transport equipment has therefore contributed to block the establishment
 of a spare parts manufacturing activity. When the importance of standardization is
 cited in connection with the strengthening of the technological capacity it should
  be realized that choice of techniques has a role to play.
       The choice of techniques is already limited but it will be limited further if
  the consumption technology continues to be rigid and imitative of the for**'""
  consumption patterns erroneously thought as "ideal" and "international" stanflard^,
  For example, as shown by Stewart (1977), choice of highly refined white maize
  flour already rules out the hammer mill as an alternative technique of production,
  one has to use a complex technology (the roller mill). Whereas the hammer mills
  can be manufactured locally, roller mills have to be imported. Therefore the choice
 of highly refined maize flour amounts 10 choices o) roller mills i e. generates demand
  for a technology which hgs to be imported and deprives the local munufacturers
  of hammer mills the chance to develop. Another example can be cited in the sugar
  industry. Of the two techniques ijz, vacuum pan and open pan, the quality oi sugai
                                               n


S. Wangwe—Issues and Policies
refined under the vacuum pan. technique is "higher", it is whiter and finer. Sugar
obviously meets need of sweetening food whether it is white, brown or yellow
The consumer, however, may have been used to a consumption technology of white
fine sugar in which case not so white and fine sugar may not be tolerated. This
means that the open pan technique is no longer an alternative. The open pan tech-
nique can produce at smaller scale (plants can be scattered in districts), the machines
useq are simpler and baron (1975) noted that open pan sullitation units in tfttah
Pradesh (India) stimulated local machine building industry. Choice of white and
fine sugar requires a vacuum pan technique which is complex and does not generare
demand for the local manufacture of machines for the sugar industry.
4.0. CONCLUSION
       It has been argued, in this artiele, that the problems of transfer of technology
are largely a result of the wide technological gap that exists between underdeveloped
 and .advanced countries. The former have such a low technological capacity that
 they cannot adapt, modify, and absorb imported nor can they generate their own
 technology. This is unlike the 19th century situation where the technological gap
 between the U.K. and importers of technology like the US and Germany was not
 verv significant. While the solution coula oe tackled at the international front at
 least 10 prevent the worsening tendency of the world market for technology it is
 argued here that the primary solution lies in the solutions at the national level.
 This is backed by the fact that while the LDCs seem to advocate an international
 code of conduct, which would legally bind the technology transfer activities, the
 advanced countries seem to favour a voluntary arrangement since most of their
 technology is privately owned. It is, recognized that there is need to strengthen the
 technological capacity at national level (where appropriate, at interregional level).
 One way of strengthening the technological capacity at national level has been dis-
 cussed in this paper i.e. developing the engineering soctor. This discussion is made
 on the understanding that most of the imported technology is embodied in machinery
 and equipment. Production of machinery and equipment therefore is seen as a
  significant step towards creating a base for adapting and absorbing foreign tech-
  nology and generating local technology. It is here that effective transfer of technology
  has to begin.
                                              12


                                                                                Utafiti-Vol."      No. 1 July 1919
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