1. Technology capability enhancement is
critical to value addition and economic
growth of developing countries.
Consistent increase of the technology
content in different industries leads to
industrial integration, self-reliance and
sustainable economic prosperity
TECHNOLOGY
MANAGEMENT &
GOVERNANCE
PROSPECTIVE STRIVE FOR
DEVELOPING COUNTRIES
ALI KHAN

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TECHNOLOGY MANAGEMENT & GOVERNANCE
PROSPECTIVE STRIVE FOR DEVELOPING COUNTRIES
With the establishment of World Trade Organization as a separate entity, our globe has
become even more interconnected and interdependent. The fundamental objective led to
the formation of legal heir of GATT is not only to harmonize the world trade but also to
allow freer trade among member nations. These objectives are being achieved by way of
gradual reduction of duties and other barriers to free trade. After cessation of the
protected reign of economies, there exist a worldwide optimism in favor of WTO charter.
Macro and micro economic prosperity has to be achieved within the domain of WTO.
We can expect a trade boom across the nations, which is the prime mover of economic
growth but its magnitude and direction will hardly be homogeneous. Technologically
developed countries are likely to find vast markets for their products in the developing
world. Beyond any doubt it will inflame competition in the long back protected markets
leading to better standard of living for a common man. It is however important to see
whether such improvement is real or timely or at the cost of long term national economic
prosperity.
Industrialized countries will take the distinctive advantage of their learning curve
experience, and their enterprises will be competitive in global markets. Their late starter
southern counterparts will not be in position to retort back with the same magnitude of
trade or in other words to equally glean the benefits of removal of trade barriers. Even if
they do so, it will be limited to the areas of primary goods.
In today’s world, no organization can be called local. Every enterprise wherever located is a
global unit. If it will not cross the border, it should be prepared to face competition from
the crossing ones. Since availability, quality and competitive cost are the strategic variables

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for a successful market entry there will be no way to desist the stride of agents of change –
global conglomerates. There will be remote chances for local enterprises to excel or keep
continue with their operations. Consequently, the developing country firms will not be able
to compete with the leading world MNCs. It will lead to mergers and acquisitions.
The most pragmatic scenario thus emanate in the form of squeezing of local industry, value
addition, GDP and finally real economic growth. Under these qualifying factors, developing
countries are likely to become selling houses of imported brands available at a competitive
price but at the cost of long term national interest.
The economic imbalance has already got worsen for most of the regional countries facing
budget deficits due to heavy imports. The gap in the balance of trade will continue to
elevate, which means need for more exchequer and getting far from self-reliance.
Although imprudent government spending, inefficiency of local financial system and
corruption are other contributing factors but still former is the prime cause. Government
with little chances of generation of funds through local sources often arrives at the only
option of conditional external debt from international institutions. This is a portentous
impediment to the real economic progression for the country. Not only debt leads to
increase in resources and services cost causing inflation but more sedately its seducement
results in long-term immutable dependency.
Pressing Need of Time:
It is time to discern that:
 WTO is a hard reality - barriers to trade are being removed;
 Global companies will capture markets being competitive in strategic variables;
 Developing countries will soon switch to selling houses of imported brands;
 Manufacturing industry of developing countries will shrink;
 Poor GDP, roaring imports, lack of funds, thriving resource prices, inflation are net
resultant; and

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 Accretion of debt will be ineluctable.
The above process is cyclic and will aggravate over time. Developing countries must strive
with reasonable resources and commitment to plan for a prospective, longer run and a
sustainable future. National economic and technology planning is of extreme importance
under the emerging future scenario. If trade is the prime mover of economic growth, then
technology capability is the engine of this prime mover. Technology capability building is
time consuming and meticulous, but unfortunately is the only available option to survive
and thrive.
It is indubitable that local capability enhancement in technology based industries is the
pressing need of time for developing world. This is also reflected in the following excerpt of
UNIDO’s report§:
“Without a capital goods industry, the developing countries even if they achieve the
rate of industrial growth corresponding to the objectives of ‘Lima Declaration’ and
plan of action, cannot emerge from dependence. They will in fact even be
accentuated by industrialization. Their industrial fabric will depend exclusively on
the industrial and technological centers of the industrialized countries. Integral
integration of the industries, and even sub-regional integration, will be almost
impossible”
Formulation and implementation of policies for the development of technology-based
industries are inevitable. Appropriate identification of industry needs, focused
prioritization, good governance and implementation are the keys to achieve the objectives
of real economic growth, and subsequently to abate the debt.
Foreign direct investment can be a possible support and should be encouraged. It should
be coupled with synchronal local capability building in key industries, which will increase
bargaining power of developing countries for inward investment.
§ UNIDO report “First Global Study on the Capital Goods Industry”.

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Promise to Growth:
Creation of local export led high value-added industries seems to be the most viable
solution to assuage debt problems and to achieve self-reliance. Industry prioritization
should be based on the size and number of supporting industries to form business clusters
maximizing the scale of value addition and subsequently contribution to GDP.
Developing countries cannot afford waste of their scarce reserves. Need identification and
prioritization are the critical elements of technology policy. Often policy instruments are
not well designed, less contributing and undermining the fundamental objectives. The
government has to take full responsibility of the local technology content addition,
expanding and encouraging private sector development to meet the additional funding.
Evidence shows most of the developing countries traded off this important component with
the timely influx of foreign investment, which later on proved to be damaging to their long
term economic interest. The importance of central technology management has now been
realized even in developed countries. Hidden hand of the Government to facilitate
consistent increase in technology content, and consequently more value addition and
economic growth is vital in the broad national economic policy.
It does not mean that the government should be engaged in industrial operations. Under
the emerging scenario its role shall be limited to providing conducive and fair atmosphere
for industrial activities, and in striking a fair balance between immediate monetary gains
and long-term national interest. The need of central economic planning is also imperative
to oversee the issues of income re-distribution, inflation, establishment of commodity
prices and future prices, balance of payments and trade as well.
Efforts must be directed for the development and promotion of nation wide innovation
infrastructure. The strength of innovation infrastructure in developing countries will be a
driving force in achieving the objective of capability building. The innovation triangle

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comprising government, industry and academia should be closely connected with
continuous exchange of industrial information and experimentation. It will lead to the
development of innovation culture in the country.
Developing countries though some of them enjoy quality R&D institutions poorly lacks in
commercialization of their research and innovation. Government has to take the
responsibility of establishment and development of mentors and guiders institution for
improving the commercialization competitiveness. This would help local enterprises to
keep on innovating at low cost as well as following a continuously moving target.
Finally the technology management governance plans must be objective oriented and time
based. Concept of common enemy has to be developed. Government has to set vision for
the next say 15 to 20 years ahead for technology capability building in selective industries in
their annual development plans with strict monitoring and evaluation. Rewards and
recognition should be publicized on the national level.
Through learning curve experience companies in the developing world will develop
expertise over time in key strategic variables – cost, quality, flexibility and dependability,
and will create market value differentiation to compete globally. Chronicle economic
diseases comprises debt, poor GDP, raising resource prices shall gradually be leveled off by
technology capability enhancement in key value added areas. Needless to say top-level
commitment is the lifeblood for achieving the cause of technological self-reliance.
September 2015