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International Technology Transfer



This paper surveys what’s known regarding the extent of international technology integration and distribution along economic and social lines. Productivity differences often explain much of the international difference in wages across nations, and technological advances play a large part in determining global productivity. Technological change has also generated new opportunities in many nations as companies seek new markets for their products. Technological change can also lead to increased levels of equality across countries and improved standards of living.

The extent of international technology integration varies from nation to nation. Economic diffusion may occur when technology is diffused more equally or when a single technology is adopted more commonly. Examples of diffusion of technology include the widespread use of computers in many different nations and the adoption of cellular phones by many of the world’s population. The diffusion of technologies can also be the result of political policies adopted by a nation. For instance, most developed nations restrict scientific research, making new technologies more costly and prohibiting access to knowledge in some other nations.

Another form of diffusion is technology transfer. The ultimate destination of most innovations is the developing nations. Developing nations commonly adopt technology from advanced industrial countries. Diffusion of international technology occurs when an advanced technological invention is made available to developing nations at a low cost or when a nation develops a technology suited to its needs but does not share it with other nations. For instance, Microsoft innovated a computer program for developing nations that made it possible to access the Internet without an expensive laptop. In such cases, when the domestic market lacks technology, the domestic industry is forced to develop the technology or obtain it through international trade.

Developing nations have, however, begun to take technology transfer to new levels. Some developing nations have made international technology transfers commonplace through aid programs and foreign direct investment (FDI). In these circumstances, the receiving country provides technical assistance, typically in the form of trained workers, to the recipient country so that it can utilize the invention. This process is often accompanied by royalties, payment mechanisms, technology exchanges, or licenses. Typically, the receiving nation retains ownership of the invention, with the stipulation that licensed use is done only once.

The third type of international technology transfer is information technology transfer. In this scenario, two developing nations come into contact, become acquainted, and establish a working relationship based on mutual interest. The invention here is often a product of one nation’s research and development process and then brought to the other nation for adoption. This type of international technology transfer takes place through licensing programs. In many cases, the product can be re-licensed for use, making it an even larger revenue stream for the receiving nation. In this case, the inventor does not need to share the invention with the receiving nation; he only needs to license the product or service so that others can make use of it.

While some fear that international technology transfer may hurt the U.S. economy, there is no proof to back up such fears. Many economists argue that international technological exchange provides a boost to the American economy because it encourages new inventions and discoveries from America. If an invention is “really worth a try”, it usually turns out well. So if you are a skilled individual with an amazing idea, it could very well lead to a very successful career in the international technology field. Just be sure to do your due diligence before leaping into an international relationship.

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