The Japanese experience in technology transfer and how it may apply to Saudi Arabia.

• Author: Batarseh, Issa E.

INTRODUCTION

THERE IS NO DOUBT THAT THE TECHNOLOGICAL PROGRESS of the Japanese has been one of the primary reasons behind its unprecedented modernization and becoming one of the world's leading industrialized powers in only four decades. Furthermore, it has been said that "Japan's technological progress has been achieved so far primarily through the introduction of foreign technologies."(1) This, coupled with Japan's human resources and managerial practices, has made Japan a role model for the rest of the developing and developed world.

Having said that, it is the objective of this essay to shed some light on the following four questions: 1) Can a Third World country like Saudi Arabia benefit from the Japanese experience in technology transfer? 2) How did Japan successfully implement the process of technology transfer? 3) What would motivate Japan to eventually allow its technology and experience to be transferred to a Third World country like Saudi Arabia? and 4) Why should Saudi Arabia look to the Japanese to transfer the needed technologies?

No doubt, the next one or two decades will witness dramatic changes in information technology that will affect our society at all levels. It is not an exaggeration to state that many of today's business practices are becoming obsolete and new business techniques are evolving daily to meet fast changing circumstances.(2) Moreover, information technology has allowed for the transmission of large volumes of information around the globe in a very short time. As a consequence, governments, companies and cultures have been brought closer together than any time in history. As a result, managerial practices at all levels are taking new turns in today's fast changing world.

The strategic use of information technology may very well depend on the availability of state-of-the-art technologies on the one hand, and the knowledge of how to fully operate and utilize such technology on the other. Senior managers or decision makers must have the necessary knowledge and the advanced technology in order to make the right decision to meet even tougher challenges. In the words of a business writer, "for decision-makers with only a superficial knowledge, it has been compared with trying to hit a moving target blind folded." In other words, information technology should serve as a tool to management and the effective use of it is contingent upon effective utilization and considerable knowledge of available technology(3).

It is very important to succeed in the upcoming phase; the phase in which science and technology plays the essential role in the development process. Japan has reached the pinnacle of success not by way of aggressive industrial managerial plans alone, but by constantly looking to the United States and Europe for recent advances in science and technology and transferring home what is most needed. It is a fact that for the past four decades since the end of the World War II, Japan has invested both money and effort to transfer technology from abroad, especially from the United States to Japan.

As Japan made use of the post-World War II state order to slowly build its industry, strengthen its economy and transfer the West's technology, the Third World countries can now make use of the "New World Order" to achieve new heights if their respective governments draft responsible and careful policies that involve analyzing scientific and technological priorities that meet development goals.

In my opinion, the task of learning about the Japanese experience as it relates to the development of its industry is as important as their experience in transferring technology and know-how for industrial growth. We must understand the "process" or ways and means through which Japan has used advanced technology as a major thrust to gain a competitive edge in its modernization drive. It is the attempt of this essay to address this point.

THE JAPANESE EXPERIENCE IN TECHNOLOGY TRANSFER

In this section, the reader is given a glimpse of the Japanese experience as it relates to technology transfer. Certainly such a topic is a very broad one and the space provided here will not suffice to cover all the angles one would desire. Moreover, it is not the intention of this essay to discuss technology transfer as a major topic either, nor to study specific technological capabilities of Japan and technological needs of Saudi Arabia. The focus will be on the major dimensions of technology transfer and how Japan handled them.

By achieving unprecedented heights in industrial and technological advances, Japan has become the only nation in history to have risen "as a phoenix" from the ashes of war in four decades. As a result, Japan is now held with a degree of awe, veneration and has won the admiration of the entire world. This admiration has generated curiosity, and an urge to learn what has become known as the "Japanese Experience."

After World War II, Japan's major aim was to re-build its economy. Japanese policy-makers realized then that the latest and most cost effective approach to achieve economic recovery was through imported technologies. Indeed, Japan succeeded in obtaining most of its technology from the United States and Europe in a very short time without having to invest either large sums of money or effort. It was reported that the United States technology transfer to Japan was estimated to be U.S. $10 billion in the Fifties and Sixties and "included transistor patents, semiconductor technology and IC technology," which served as building blocks for Japan's technology achievements.(4)

Technology Transfer: Requirements, Obstacles and Channels

In the words of Gruber, the concept of technology transfer means "the utilization of an existing technique in an instant when it has not previously been used."(5) The key word in this definition is "instant" which implies that a great deal of money, time, resources and efforts are being saved. Hence, the benefits of technology transfer are abundant if it is successfully implemented and fully utilized. According to Dahlam, there exist three levels of technology transfer:

1. The capability required to operate a technology. Such capabilities are either operational or technology-specific (know-how). The former can be learned through the job training and the latter can be acquired by the technology transfer package.

2. Investment capability that wishes to create a new production capacity.

3. Innovation capability that requires a proper environment for R&D activities.(6)

   Unfortunately, many developing nations only understand technology transfer to mean the "physical" transfer of hardware or software for some application. True technology transfer is only possible when the recipient has the above three capabilities. Furthermore, the "physical" component of technology transfer will not be utilized effectively unless it is part of a "technology package." For this package to be complete, it must at least include the following major components:

   * actual hardware, software and materials,

   * documentation that gives the operational, technology-specific and know-how skills,

   * training team and/or consulting firms, and

   * management systems.

   For the transfer to be smooth and less time consuming, the training team and the consulting firms must play an important role in easing the transfer of the new technology and its adaptability in the new society.

   Because of their previous experiences, Japanese have excellent on-the-job training programs, including sending employees of the host country to Japan to gain first hand knowledge about the technology being transferred. This is normally done at moderate costs with satisfying outcomes.(7)

   Generally speaking, obstacles to technology transfer may vary widely from one host country to another. This in large part depends on the host country's previous experience in technology transfer, and other internal and external parameters. The first is easier to deal with than the latter since the host country has direct control over such parameters. Hence, some of the measures to encourage or facilitate technology transfer would have to be taken by the host country: It must fully participate in the process. It was shown in previous studies that the obstacles are predominantly internal and particularly in government policies that discourage technology transfer, although that is not their purpose.(8)

   The lack of skilled and professional manpower has often delayed the successful implementation of technology transfer. It is known that one of the most important dimensions of technology transfer is the human resource dimension. This dimension could very well become a major constraint that inhibits the transfer or becomes a vital tool that facilitates it. It has been reported that many countries suffer from a great scarcity of highly educated people in fields related to technology transfer. This is noticeable especially when it comes to technical expertise. Developing countries have suffered from the "brain-drain" caused by a large emigration of engineers, researchers and scientists to more developed countries. In order to avoid shortages of managerial and entrepreneurial skills, the host country should actively pursue a policy of training technical and managerial personnel, hire qualified graduates and use local faculty for consultation and research.

   Another potential obstacle to technology transfer is what is known as the "technology gap" between the supplier and the recipient.(9) This gap gives a measure of technical competence between the two sides. When the gap becomes...