Technology Transfer as a Vehicle for Industrial Development Case of Basic Metals and Engineering Industries

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Addis Ababa University


Technology played a prominent role in satisfying social demand throughout the human history resulting in today’s human development. It is one of the most important and powerful instrument that leads to improved standards of living by reducing poverty. Furthermore, the importance of technology to domestic economic development has been widely recognized and become the main strategy for competition between nations. Technology has made a huge impact on many nation’s economies and societies through technology transfer, which is regarded as an essential step for technology advancements. The objective of the research is to show direction of how industrial development can bring through coordinated and integrated transfer of technology, which leads to sustainable social and economic development in Ethiopian industries. To conduct this research, various related literatures have been reviewed both published and unpublished. It has also been reviewed the practice of China, Korea, Malaysia, Singapore, Brazil and South Africa and practice of technology transfer in Ethiopia since 1400 G.C. Furthermore, surveys on basic metals and engineering industries, international technical assistant agencies, government enterprises and institutions have been made. Moreover, ratio of imported to total raw material cost, percentage distribution of value added, and employment contribution of BMEIs have been analyzed by considering the past 14 successive years. Review of socioeconomic development paths of the NICs of East Asian countries revealed that their initial conditions in early 1960s as being similar to many of the African countries. However, their rapid and successful transformation into industrialized economies through "free riding" technology transfer system based on the scientific, and technological knowledge base developed by the industrialized countries have contributed for their rapid technological development. Ethiopia has a remarkable record of achievement of a two digit economic growth for the last five consecutive years. However, the contribution from the industrial sector remains minimal. To ensure the sustainable economic and social development of the country in today’s competitive world, building technological capability of the industry is critical. This Technology Transfer as a Vehicle for Industrial Development Gulelat Gatew Abstract iv could be achieved through well organized and coordinated technology transfer system based on the need of the industry and society. Most of the imported technologies to the country in the past had failed to be adopted, improved, re-engineered, and disseminated to other similar industries at the desired level, especially in BMEIs. Ethiopian Basic Metals and Engineering Industries (BMEIs) are facing various challenges. Most of all, the challenges related to technology seriously affect the product development, profile versatility and quality of the product in terms of geometrical fitness and required properties. Moreover, the product profile and technological process are being stagnant. The country BMEIs have been engaged in low value addition activities. Therefore, there is no opportunity to develop new technology that enhance the capital income of the industries in particular and the nation as a whole. As the research shows, besides the above mentioned challenges the industries are also suffering due to: low productivity caused by old technologies and inadequate attention given to their improvement and development; inadequate support and facilities for research and development activities ; lack of fully assimilating or internalizing the technologies and hence not using them to full extent; limited diffusion of knowledge within the country; lack of coordination, implementation, evaluation and controlling mechanism across the stakeholders. Therefore, the researcher proposed various solutions that would enable technology transfer to BMEIs in particular and to the country at large. The proposed solutions mainly focus on technology policy, technical development of higher institutes, practical oriented Science and Technology Education, coordinate participation of the stakeholders, applied R&D, University-Industry linkage, establishment of Basic Metals and Engineering Industries Technology Transfer and Innovation Centre (BMETTIC) and Technology Incubation Centre. Key words:- Technology, Technology Transfer, Technological Capability, Basic Metals and Engineering Industries.



Technology; Technology Transfer; Technological Capability; Basic Metals and Engineering Industries