Acquisition of Capabilitities through International Technology Transfer

Doctoral thesis, 1987

The focus in this thesis is on the acquisition of static and dynamic capabilities in LDC industry. This has been studied in small industries in Tanzania, which were started through international technology transfer, in which small producing firms from Sweden acted as technology suppliers (The Sister Industry Programme). The data has been collected during an eight-year period, beginning from the start of the first projects in Tanzania in 1978. In total, interviews have been conducted in 22 Tanzanian firms and 18 Swedish firms, supplemented by interviews with authorities and consultants. An in-depth study of acquired capabilities was carried out in 1983, forming the basis for an assessment of the technology transfer programme. An analytical scheme was made for the analysis of static and dynamic technological and managerial capabilities. These include production/administrative and inventive/entrepreneurial capabilities. Furthermore, during the course of the research, a method was developed for estimating the dynamic long-term effects in terms of magnitude of the capability contribution from the international technology transfer project. It was found that capability acquisition is a complex and long-term process, of which an international technology transfer project is only one step. Previous industrial experience is essential in order to benefit from an overseas training programme. While small scale industries were shown to be excellent in transferring production capabilities, they were less successful in the transfer of administrative and dynamic capabilities. This was primarily due to their inherent weakness of having a shortage of qualified personnel for training activities. However, through long-term cooperation, initially based on a contract and later developing in to a business relationship, and recurrent training periods in Sweden, it has been shown that several of the small Tanzanian firms have been able to acquire substantial stocks of dynamic capabilities. The Swedish firm has thus supplied the Tanzanian firms with new information and knowledge, having the double function of compensating for weaknesses in the local Tanzanian network and sometimes serving as a link to an international market. Based on these findings, the present study also makes some additions to the conceptualization of the infant industry process. Lastly, recommendations are provided for improving a sister industry type of technology transfer.