10.5.1 Barriers to Technology Transfer between Countries
Many barriers exist for technology transfer between countries:
- Access to capital is limited. The capital costs of ESTs are generally higher
than those of conventional technologies. Also, owing to the risks perceived
for new technologies, financing costs will tend to be higher. Moreover, the
availability of FDI is limited and unevenly distributed around the world.
- Although many countries are revising their trade policies in order to liberalise
markets, substantial tariff barriers remain in many cases for imports of foreign
technologies including energy supply equipment. This limits exposure to energy
efficiency improvement pressures from foreign competition on domestic suppliers
and prevents early introduction of sustainable energy innovations from abroad.
Where foreign exchange limitations and public revenue considerations make
across-the-board tariff removal difficult, preferential treatment of ESTs
could be a realistic option.
- National interest groups such as powerful extraction and construction companies
can influence technology choices in favour of conventional technologies.
- Institutional and administrative difficulties exist to develop technology
transfer contracts, which can be a necessity to qualify regional construction
companies as potential partners of the entrepreneurship. There is a need for
greater regional cooperation among developing countries, both in R&D work
and in the international commercial contracting network.
- Developing countries have in general poor access to information. It is
one thing to recognise that the information and technology desired are available,
but is quite another issue to gain access to them. That will require that
developing countries strengthen their linkages with the rest of the world
by investing in the infrastructure needed to receive and transfer information.
In this undertaking, partnerships are key: between research institution in
developed and developing countries, between domestic and foreign firms, and
between research institutions and the private sector. A modern information
and communication infrastructure provides up-to-date technical information
and publications, and allows instant communication among scientists around
the world. Technical information services linked to worldwide information
networks distribute knowledge quickly and cheaply to the producing sector.
Thanks to satellites, the developing world can leapfrog immediately to advanced
telecommunications capabilities, by passing the long road already travelled
by the industrialised countries (Greene and Hallberg, 1995).
- A major requirement for successful agreement in technology transfer is
the guarantee of intellectual property rights (IPR). Without an IPR law that
is effectively enforced, there is little incentive for private companies to
share their technology. The cost of IPR is usually quite small when compared
to the capital investments and risks that are involved. In the energy sector,
a well-developed mechanism exists for sharing IPR. It is the production-sharing
contract. Under this agreement, private firms contract with local parties,
usually state-owned companies or governments, to invest and share technology
with them in return for a share of the products produced. This practice has
proven very successful in the international oil and gas sectors, and could
be a model for other energy supply areas (see Section 3.5
in Chapter 3 for an elaborative treatment of IPRs).
- Needs of the developing countries are quite different to those of the developed
countries. Developing countries are generally still focused on large capacities
of cheap, reliable power with low technical risk, and have new technologies
as a lower priority. Industrialised countries have the infrastructure to assimilate
riskier new technologies, whereas developing countries do not. However, this
approach prevents developing countries from technological leapfrogging.
- Economic incentives for donors are weak mainly when energy demand is scarce
and scattered. This barrier can be minimised by the additional potential value
gained through JI/CDM schemes.