Trade Policy and the Impact of Foreign Technology
William A. Fischer
The ability to develop new industrial products and processes is associated with the process of economic development. In fact, it is often not the products or processes themselves that are desired, but the industrial capabilities embodied in them.
The less developed countries' preference for industry does not arise from the sheer pleasure of producing industrial goods. Industrialization is simply a proxy for concomitant changes in labor productivity, technological diffusion, "learning by doing" and the resulting economic environment which appears to be relatively more conducive to development. 1
The acquisition of foreign technology often serves as a means of rapidly achieving access to "improved" industrial products and processes. Hence, international technology transfer represents a central issue in the policies of industrialization. Technology transfer is not, however, a culturally neutral phenomenon. Technology reflects characteristics of the society and situation in which it was developed. As a result, the acquisition of foreign technology involves a series of trade-offs between a variety of often conflicting societal goals. The technology transfer decision is one with multiple policy dimensions revolving around the costs and benefits of allowing the penetration of foreign influence via the national markets.
Despite the fact that the "communications" nature of the technology transfer process has been demonstrated in a variety of studies, 2 it is not an entirely evident proposition. Consequently, this aspect often tends to be ignored in more hardware-oriented discussions of foreign technology acquisition. In order to be able to appraise the impact of foreign access to a particular market competently, it is important to emphasize that any technology, no matter what its level of sophistication, embodies within it the norms and values of the society in which it was developed. Products produced in the more industrialized countries contain resource, usage, and