I~ L4L' a of

INDUSTRY AND ENERGY DEPARTMENT WORKING PAPERINDUSTRY SERIES PAPER No. 12

Impact of Technological Change onIndustrial Prospects for the LDCs

~ .

June 1989

Report No. 10437

The World Bank Industry and Energy Department, PPR

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

INDUSTRY AND ENERGY DEPARTMENT WORKING PAPERINDUSTRY SERIES PAPER NO. 12

Impact of Technological Change onIndustrial Prospects for the LDCs

June 1989

The World Bank Industry and Energy Department, PRE

IMPACT OF TECHNOLOGICAL CHANGE ON

INDUSTRIAL PROSPECTS FOR THE LDCs

Carl Dahiman

June 1989

The views expressed in this paper are those of the author and should not be attributedto the World Bank or its affiliates.

IMPACT OF TECHNOLOGICAL CHANGE ONINDUSTRIAL PROSPECTS FOR THE LDC'S

by

Carl J. DahlmanIndustrial Development DivisionIndustry and Energy Department

The rate of technical change, having speeded up in the last fewyears, has implications for ,.he industrial prospects of the LDC's as well asfor the World Bank. This paper covers three topics--a brief summary of themain trends in technological change in industry, implications of those trendsfor LDCs, and implications for the Bank. As other papers at this seminaraddress r;rends in technological change in greater depth, this one focuses moreon the implications of those trends.

Two clarifications need to be made at the outset. The first isthat this paper defines technology quite broadly as technological knowledge.procedural methods. and organizational modes used to transform inputs intooutputs. Thus it is not so much just hardware as knowledge, organization, andmethods that structure the activities for carrying out the transformations.This is important because it means that technology is to a large extentembodied in people and institutions, not just in physical objects, and thatacquiring technological capability is therefore mostly a matter of building upskills and institutions, not buying hardware.

The second clarification is that technical change offers both apotential and a threat to developing countries. This will be developedfurther in Section II.

I. TRENDS IN TECHNOLOGICAL CHANGE IN INDUSTRY

Although there are many trends, the main ones may be summarizedunder the seven headings below. So far they are evident mostly in theindustrialized countries, but they are also appearin among the more advanceddeveloping countries, and have implications for all._/

A. Increased rate of innovation

Although as recently as 15 years ago, talk was of a slowdown inthe rate of innovation, in the last decade a tremendous acceleration hasactually bean occurring. Much of this has affected primarilymicroelectronics, biotechnology, and new materials. The accelerating trend intechnical change is related to two factors. On the supply side, it has beenpushed by a series of advances in material sciences, solid state and plasmaphysics, genetic engineering, and substantial improvements in scientific

./ For more information on the various trends, see the references at the endo. this paper, farticularly OECD (appendix 2 to chapter 6) and OTA.

-2-

instrumentation. On the demand side, the economic multipolarization andintense competition for world markets has stimulated technological rivalryamong nations and industrial firms. As a corollary to this trend, in the lastdecade there has been an increase in R&D expenditures as a perc3ntage of GNPamong the industrialized economies and the most rnpidly industrializingdeveloping economies in East Asia. Table 1 shows this increasing trend in R&Dexpenditures fcr the U.S., Japan, and some key East Asian developingeconomies.

TABLE 1: R&D EXPENDITURE AS X OF GNP

1965 1970 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

qrazfi - - - 0.70 0.60 - - - 0.60 - - - -

Mexico 0.20 - - - - 0.39 0.51 0.52 0.46 0.32 0.56 0.34 0.30

Korea - 0.39 0.42 0." 0.60 0.63 0.56 0.58 0.65 0.90 1.05 1.26 1.59

Singapore - - 0.00 - 0.2D - 0.20 0.30 - - 0.60 - 0.90

Taiwan - - - - 0.66 0.84 0.72 0.94 0.91 0.94 0.99 1.06 1.04

Japan 1.93 2.22 2.40 2.37 2.35 2.36 2.52 2.63 2.87 3.01 3.15 3.29 3.49 -

United States 3.09 2.82 2.45 2.43 2.38 2.36 2.44 2.57 2.64 2.83 2.88 2.89 3.06

Sources: Japan and United States: Japan - Ministry of Scif-ce & Technology, Indicators of Science, Korea: Republic of Korea - Ministry ofScience & Technology, Science and Technology Han Taiwan: Taiwan, Repub(ic of China, Taiwan Statisticel Data Book, 1987. w

Notes: t-) indicates data not available.Taiwan's data for 1984 and 1985 includes humanities and social sciences.

-4°

B. Broader applicability of new technologies

The most dramatic changes so far have been occurring in the areasof electronics and telecommunications. The changes have been not only in theprocesses and products within the electronics and telecommunication sectorsthemselves, but also in their applications to a wide range of other sectors.These include process control in continuous industries such as steel andpetrochemicals; automation in assembly-type industries such as automobiles andother consumer durables; and automated data processing and communications inservice industries such as banking, insurance, and others that requirerecording and tracking large numbers of transactions. For example, althoughsales by information technology industries only accounted for between .9% and2.3% of GNP in 1984 in the United Kingdom, France, Germany, and Japan,estimates for the same year indicate between 60% and 65% of manufacturingfirms in those countrias adopted some form of microelectronics technology.:/

C. Shorter life cycles and greater flexibility in resgonse to customer'sneeds

In the industrial sector, especially in manufacturing, a conse-quence of the above two trends has been a shortening of the life cycles oftechnological processes and especially of products. With new ele'.tronics-based technologies for computer aided design (CAD), numerically controlledmachine tools (NCMT), industrial robots, automatic guided vehicles (AGVs),computer-aided manufacturing (CAM), automated warehouses, and automated orderand distribu-ion systems, a move to computer integrated manufacturing (CIM) isunderway. This innovation permits a very short period of time between newproduct design and production. It also permits rapid response and flexibilityin relation to the specifications of different customers. As a result thereis an important trend toward more product diversificati.on and more competitionin design, distribution, and service in addition to actual productionactivities.

Further, the rapidity of technological change, an increase in thenumber of participants, and acceleration in the diffusion of technology havealso led to shorter technological life cycles. This has meant more pressureto cash in on technological rents as quickly as possible biefore each innova-tion becomes obsolete. This is leading to greater internationalization oftechnological development among industrial countries and new competitivestrategies among major players, including the formation of strategicalliances. For example, of 974 international cooperation agreements amongfirms between 1982 and 1985, 28% were for distribution and marketing, 26% forintegration of R&D activities, 17% for technology transfer, 16% for integra-tion of production, 6% for supply and 7% for other./

2/ OECD [1988] p. 254 and ff 29.

2/ OECD [1988] p. 255. See also Mody [1988] for a recent analysis of trendsin technology alliances between firms.

-5-

D. Increased automation. smaller role for unskilled labor

Increased automation and the greater emphasis on product design,development, and marketing mean that being a low-cost producer relying oncheap labor is no longer a sufficient condition for competitiveness.Competitive advantage in many se cors now depends less on lower productioncosts than on speedy and reiiablu delivery, high quality, and the ability toexpand the range of products and services to fit customers' changing needs.On one hand, this trend tends tc work against LDC's whose most abundantresource is cheap unskilled labor. On the other hand, the development ofautomated technologies such as NCMTs, CAD, automated accounting and managementsystems, and expert intelligence systems are also substituting for skilledlabor, and even for white collar professionals in business and technicalfields such as architecture and medicine. This could relieve some of thetechnical skill constraints that handicap m-ny LDC's. However, adoption ofthese technologies will require a new set of operational and maintenanceskills. As a result, a different skill profile, with a more flexible laborforce is required.

E. C.hanges in. ise of inputs

Inci d process control is leading to increased energy efficien-cy in energy-ir: e process industries such as steel and cement. Betterintegration betweei Xcign and production and new optimization techniques areleading to material savintgs. The development of synthetic and new compositematerials is also substitating for many traditional materials such as rubber,jute, steel, copper, and -ners ti. c are important exports from many LDCs.

F. Changes in the organizac RJ paradigm of productivitv

A major change has taken place in the organizational paradigm forproduction. Pioneered by the Japanese, the new mode has involved the conceptsof just-in-time (JIT) inventory, zero defects, and total quality control(TQC), which have reduced costs, improved quality and flexibility, and madethe Japanese formidable competitors across a wide range of products andmarkets. Many other producers are scrambling to implement some of these neworganizational techniques. The result has been a quantitative and qualitativechange in the nature of competition. Moreover, the Japanese model dictates adifferent relationship between final assemblers and suppliers, which ofteninvolves the need for geographic proximity between assemblers and suppliers,as opposed to very distant facilities that, by necessity, tie up capital ininventories. To the extent that the Japanese model predominates over the U.S.model, and ba.,ed on the concept of worldwide sourcing from distant low-costlocations, t markets for LDC suppliers in some subsectors (such as autoparta) may L decreasing in the future.!/

i/ For an elaboration of this in the engineering and electronics industriessee Hoffman [19891 and Castells and Tysons [1988].

-6-

C. Increased globalization and greater competition

Furthermore, technical changes have reduced transportation andcommunication costs, leading toward greater globalization of world productionand trade. Exports as share of GNP have increased in virtually all economies.As a result, international competition in almost all markets has increased,which means countries must constantly adapt to changing competitive situa-tions. In addition, tremendous structural change has taken place in theindustrial manufacturing sectors and between industry and services, a situa-tion that also underlines the need for flexibility and adjustment to change.

II. IMPLICATIONS FOR LDCS

A. TECHNOLOGY AS POTENTIAL AND THREAT

Technology trends, in addition to other trends, have many implica-tions for the industrial prospects of LDCs. The principal one is that in thecontext of rapid change and increased international competition technologicalchange can be both a potential and a threat. It can be a potential to theextent that a ccuntry can react to and take advantage of the opportunitiesoffered by new technologies and new forms of organization. It can be athreat to the extent that a country cannot use the new opportunities to itsadvantage. For example, the rapid development and diffusion of automationtechnologies is undermining LDC comparative advantage in tne production ofsome labor-intensive products such as clothing and foatwear, and in theassembly of electronic components, at the same time glving the edge once againto the developed economies that adopt these new technologies.:/ Similarly,improvements in the efficiency of processes usirg raw materials exported byLDCs and the substitution of new materials for traditional materials arereducing the demand for some key exports from de-^loping economies, such asjute, copper, steel, and rubber, among others.

B. INCREASED POLARIZATION

Economies that cannot react to these technology changes are likelyto be adversely affected. Their industries will lose competitiveness and mayface closure, with the consequent problem of increased unemployment. Alterna-tively, adjustment to new technologies may be postponed because of increasedprotection of domestic industry, with the consequent social costs of reducedconsumer welfare compared to what would result from commerce with moreefficient foreign suppliers.

Economies that can take advantage of these changes and adjust willbe able to increase their growth prospects and standards of living. The groupof East Asian newly industrializing economies (NIEs) are a very good exampleof successful adjustment to technological change and increased international

51 See Castells and Tyson [1988], Hoffman and Rush [1982], and Mody andWheeler [1989].

-7-

competition. Table 2 shows their dramatic performance compared to the rest ofthe world. To a large extent that better performance is related to, amongother things, their technological strategies.

The current situation has resulted in increasing polarizationbetween LDCs that can successfully adjust to technical change and increasedinternational competition and tho3e that cannot. This puts a premium ondeveloping successful strategies so as to be able to take advantage of tezhno-logy and technical change.

8-

Table 2: GNP PER CAPITA, ITS GROWTH RATE, AND POPULATION FORSELECTED ECONOMIES

ECONOMY GNP/CAPITA AVERAGF ANNUAL POPULATION1986 GROWTH RATE (MILLIONS)

DOLLARS 1965-1986 MID 1986

LOW INCOMEECONOMIES A/ 270 3.1 2493.0

MIDDLE INCOMEECONOMIES / 1270 2.6 1268.4

INDONESIA 490 4.6 166.4PHILIPPINES 560 1.9 57.3THAILAND 810 4.0 52.6MALAYSIA 1830 4.3 16.1KOREA 2370 6.7 41.5TAIWAN 3976 6.9 19.5HONG KONG 6910 6.2 5.4SINGAPORE 7410 7.6 2.6

INDUSTRIAL MARKET'ECONOMIES g/ 12960 2.3 741.6

SOURCE: World Bank, World DeveloRment ReRort 1988; except for Taiwan,which is from ROC, Council for Economic Planning and Development,Taiwan Statistical Data Book 1987.

^/ Low income economies are those with less than US$450 dollars per capitaand consist of 39 economies, including India (US$290 per capita) andChina (US$300 per capita).

b/ Middle-income economies, in order of increasing GNP per capita, are:Liberia, Yemen (PDR), Indonesia, * men (Arab Rep.), Philippines,Morocco, Bolivia, Zimbabwe, Nigeria, Dominican Rep., Papua New Guinea,Cote d'Ivoire, Honduras, Egypt, Nicaragua, Thailand, El Salvador,Botswana, Jamaica, Cameroon, nuatemala, Congo, Paraguay, Peru, Turkey,Tunisia, Ecuador, Mauritius, .olombia, Chile, Costa Rica, Jordan, Syria,Lebanon, Brazil, Malaysia, South Africa, Mexico, Uruguay, Hungary,Poland, Portugal, Yugoslavia, Panama, Argentina, Korea (Rep. of),Algeria, Venezuela, Gabon, Greece, Oman, Trinidad and Tobago, Israel,Hong Kong, Singapore, Iran, Iraq, and Romania. It does not include fourhigh-income oil exporters: Saudi Arabia, Kuwait, Uriited Arab Emirates,and Libya.

./ Industrial market economiies, in order of increasing GNP per capita, are:Spain, Ireland, New Zealand, Italy, United Kingdom, Belgium, Austria,Netherlands, France, Australia, Germany (Fed. Rep.), Finland, Denmark,Japan, Sweden, Canada, Norway, United States, and Switzerland.

-9-

C. ELEKEjTS FOR THE SUCCESSFUL EXPLOITATION OF TECHNOLOGY IN DEVELOPInECONOMIES

Technology is becoming an increasingly important element ininternational competitiveness for firms as well as for countries. Technologi-cal capability is thus central for successful participation in the worldeconomy. However, the development of technological capability requires time,planning, and investment in human and institutional capital. In addition,different types of technological capabilities are appropriate at differentstages of a firm's or country's development.

To be at the forefront of international competition it is neces-sary to develop new technology continually. That is why technology policy indeveloped countries is concerned primarily with innovation and R&D. Since,however, to develop new tech-nology takes large financial and human resources,one of the key elements of a successful early technology strategy is theeffective acquisition of foreign technology instead. This is particularlyimportant for developing countries, given their limited resources, since itgenerally is cheaper to acquire technology from abroad and adapt it to localconditions than to develop it entirely indigenously. A tremendous stock oftechnology already is in existence around the world and is increasing rapidlyas new technology is developed daily. In addition, there is evidence at botnthe firm and the country level that technological "follower strategies" canhave high returns, at least until the technology gap with the leaders isconsiderably narrowed.

The latter case has been very dramatically illustrated by Japan'ssuccess in catching up to Western technology through its initial reliance onimported technology, coupled with reverse engineering, adaptation and improve-ment of that technology. Once at the frontier, however, Japan has had toallocate more resources to technology development. As will be discussedbelow, some of the other rapid industrializers such as Korea and Taiwan havesurged ahead by becoming very good at acquiring foreign technology.

In any case, the technological problem of a country is not justacquiring foreign technology but diffusing and using the technology effi-ciently. One of the most striking features in analyzing virtually anyindustrial sector in a developing country is the tremendous dispersion in theeconomic performance of firms in the sector. Differences in economic perfor-mance are due, in part, to the very different nature of firms that may coexistin the same sector. In most cases there is a fragmented structure, with firmsranging from traditional craft-based industries in the informal sector, at oneextreme, to modern, often large, firms using the latest equipment andtechnology, at the other.

Some of the differences in performance are due to the differentnature or vintage of the technology that firms use. However, even within asector there may be a very different economic performance with the same equip-ment, due to different capability among f'rms using the technology. Thus,although the introduction of new technology to a sountry is an importantelement of a successful technology strategy, another very important aspect is

- 10

diffusing .echnology internally and increasing the efficiency of existingtechnology. Efforts to increase the internal diffusion of technology and toimprove the efficiency with which technology is used can have high economicreturns in terms of increasing the competitiveness of local industry.

A third general concern is the need to improve and developtechnology locally. This is important because technology is dynamic, notstatic, with continuous advances in many elements of technology. Some ofthese are minor changes in processes, inputs, equipment or organizationalarrangemnnts. Others involve completely new approaches, including productsand processes that can only be embodied in new production facilities. Inaddition, technology has many tacit elements and has to be adapted to aspecific environment, whi. h itself is constantly changing. Thus it isnecessary to develop th_f capability to adaRt technolog, to improve technologyconstantly, and evenr to develop new technology more appropriate to localcircumstances. Local factors might include smaller-scale, special rawmaterial conditions, special product needs, etc. For some developingcountries, targeting specific technologies for development may also makesense. However, the tricky issue is choosing areas most likely to offer realpossibilities of adequate returns .o the risky investments in R&D efforts.

Developing technological capability requires appropriate policiesaffecting the demand and supply of technological elements as well as the linksamong them. But it requires more than policies. It involves building theappropriate institutions and networks and initiating interaction among thedifferent agents. It also involves use of specific mechanisms aimed atdeveloping demand for and supply of technological elements and the linksbetween that demand and supply. The development of many of these capabilitiesand links may occur spontaneously as part of the natural development ofmarkets.

However, in the technology arena, many significant differencesexist between private and social objectives and returns. In areas where themarket fails, government has a role in intervening to overcome some of theseimperfections. In other areas the market may be slower to develop some of thecapabilities for facing the challenges of the developed world. In thoseinstances, there may be a role for the government to intervene to speed upthat development process. However, it should be kept in mind that althoughmarket failures (or market slowness) may indicate a need for governmentintervention, there is no guarantee that such intervention will insure asuperior solution. In designing a strategy in any country, it is necessary toconsider the nature and efficiency of the government and the bureaucracy thatis to implement the strategy. Even well-intentioned policies can havedeleterious effects if improperly designed or if the people charged with theirimplementation do not have the relevant background or expertise.

From what has been said above, technology Rolicy in the context ofa developing economy could be defined as the network of policies and institu-tions that affect how an economy acquires foreign technology, then diffusesand uses technology efficiently, and later improves and develops technology.The capacity of developing countries to take advantage of the potentialoffered by technology depends on five interrelated factors.

- 11 -

The first is an aDDroDriate policy and legal framework foracquiring foreign technology. Much technology from abroad can be obtainedinformally, for example through imitation, foreign study and training,purchase of foreign capital goods, and technical assistance from suppliers ofequipment, components, and material, as well as from users. However, muchforeign technology has to be acquired through more formal means. Manycountries have legislation that restricts some aspects of formal technologytransfer. To acquire foreign technology efficiently, countries may need toreexamine their policies affecting technology transfer, direct foreigninvestment, and intellectual property protection. Excessive limits on royaltypayments and other restrictions on technology licensing agreements may makeforeign licensors unwilling to transfer proprietary technologies. Some of thenewest and most desirable technology can only be obtained through allowingdirect foreign investment in which the foreign producer retains full controland can generate and repatriate royalty/profit flows. Adequate legislation(and its enforcement) to protect intellectual property is needed to assureforeign investors and foreign licensors that their technology will not leakout to competitors.

In addition, it is critically important that the policy environ-ment put pressure on firms to reduce costs, improve quality, and adopt moreefficient new technology, by exposing them to foreign and domestic competi-tion, and that it keep them free from cumbersome restrictions, so that theycan use the most efficient new technology and redeploy resources.

The second is good information networks on existing technology.trends in technolo2y. Rroduct markets. and technology suDpliers. As notedabove, while technology is increasing at a very rapid pace, the stock ofavailable foreign technologies is also expanding very rapidly. This opens uppossibilities for developing countries to draw on that expanding stock toimprove their efficiency and performance. However, because of rapid technicalchange, it is necessary to go beyond information about what is currentlyavailable and learn about technological trends in order to avoid choosingobsolete technology. It is also important to know the key trends in foreignand local markets, particularly the ones that a country plans to produce for,and trends concerning alternative technology suppliers. Thus it is necessaryto combine technological information with market intelligence. Most of thishas to be done at the firm level, but because of economies of scale ininformation gathering and assessment, specialized institutions includingtechnology agencies and special consulting organizations, can play animportant role.

The third factor in a country's ability to take advantage oftechnologv is the caRability to assess information on technology. markets. andsuRRliers and determine the kind of technology most aDDroRriate to theeconomy's specific circumstances. In some instances, given relative factorprices, markets, and existing skill levels, it may make sense to acquiretraditional technologies that may be easier to assimilate and master. Inother cases, given the absolute advantages of some of the newer technologies,it may make more sense to acquire them outright.

- 12 -

This raises the issue of "leapfrogging," the potential for whichappears to be greatest where there is no previous commitment to the moretraditional technology since there are no sunk investments or entrenchedvested interests. This makes the possibility of leapfrogging particularlyattractive to less developed economies, although adopting some of the newtechnologies usually demands special skills and presupposes the existence ofcomplementary support activities and infrastructure. Therefore, thepossibility of leapfrogging often depends on whether the required ancillaryskills and supporting infras;ructure already exist in the LDCs. If they donot, the cost of developing them must be factored in. These extra costs,which may include extensive technical training in new fields and bettertelecommunications infrastructure, are likely to make leapfrogging lessattractive. Another relevant consideration is whether further technologicalchange may be expected to require new types of skills. In telephone switchingequipment, for example, it has been foundS/ that economies that do not havemuch capacity with old technologies but at the same time have considerableancillary capabilities as well as rapid growth rates (in order to takeadvantages of the scale economies of the new systems) are most likely toi.eapfrog.

Probably more extensive than the opportunities for leapfroggingare the opportunities for blending new and older technologies. In some casesit is possible to take elements of new technologies, graft them to existingtraditional technology and improve their performance. An example is the long-tailed boat in Thailand. Large automobile engines equipped with long propel-ler shafts have been installed on traditional river boats, which havedeveloped into very efficient and fast river transportation. In other casesit may be possible to apply modern science and te:hnology to development ofnew products and processes appropriate to developing country conditions. Highyielding rice varieties, or the use of advanced fermentation techniques toproduce gasohol, are two examples of this process.

The fourth factor in a country's ability to use technology is thecapability to assimilate and diffuse technology efficiently throughout theeconomy. This requires well functioning internal information networks andeffective product, labor, and capital markets. Product markets have tofunction efficiently so that the more price effective products drive out theless efficient ones. This requires elimination of entry and exit barriers andfew regulatory constraints on competition and pricing. An appropriate levelof worker skills must exist, to be able to assimilate the new technologies andacquire technological mastery; labor mobility is required to permit furtherdiffusion of skills and technology throughout the economy. There also have tobe adequate sources of financing for the introduction of new products andservices and the improvement of the existing ones.

A related point on diffusion is that it is important to distin-guish the benefits from producing new technologies from those of using them.This is particularly relevant in the context of electronics and computers.Many developing countries, excited by the prospects of these new technologies,

i/ Mody and Sherman [1988].

- 13 -

seem to think it is very important to produce virtually all the hardwarethemselves; instead they end up producing inferior products at a higher cost.However, the main benefits in this area, as in many other high technologyareas, are not so much in developing the technologies and producing theproducts but ir. using them effectively.2/ Therefore, strategies that focus onadopting new technologies and making economies into very good users often tendto bring much greater returns that those that focus on the production of thetechnology.

At a more general level, a large part of the early success ofJapan was in its good use and assimilation of technologies developed else-where--only when it caught up with the rest of the world did it begin to focuson developing its own technology. However, very important symbiotic interac-tions occur between producers and users that create special advantages interms of information flows and which cannot be disregarded. The importantpoint, nonetheless, is that the greatest benefits are to the use of newtechnologies and that any focus on production must be quite specializedbecause it is extremely difficult to be competitive across a wide front. Theproduction of almost any good now requires complementary inputs which them-selves often embody new and rapidly changing technology.

The fifth factor in technology use is the calabilitv to adaDt.improve. and develop technology. Because technology is dynamic, it isnecessary to develop the capability to adapt technology to the local setting.It is also necessary to be able to improve the technology constantly as moreexperience is acquired in its use and as local conditions, such as price,availability of inputs, and market requirements change over time. Inaddition, new technological elements can be grafted onto the technologyoriginally acquired, a process that can go on for some time before a tech-nology becomes obsolete.!/

A special point here has to do with the role of public R&Dlaboratories. In most developing countries with large public R&D infrastruc-tures, the orientation of these institutes is academic and removed from theneeds of the productive sector. Typically, the ministries under which theyfunction do not stress support of the productive sector and do not provide anyincentives to do so. Such an incentive would be to ask R&D labs to finance atleast part of their operational costs through support services and contractresearch. In Japan, research centers historically played an important inter-mediary role in assessing, acquiring, adapting, and improving foreign techn-ology for use by the productive sector.!/ It is only since Japan haas caughtup with the West that its research institutes have focused more on basic pre-commercial research. In Taiwan, publicly supported research institutes stillplay primarily that intermediation function, and it is thanks to that role

Z/ On this point in the specific context of computers see Flamm [1988].

t/ Dahlman and Westphal [1982].

i2/ See Nagaoka [1988] for an overview of the Japanese experience in industrytechnology development.

- 14 -

that Taiwan has been able to move up the technological ladder into moretechnology-intensive areas of electronics.

In Korea, publicly supported R&D institutes were established inthe late 1960's and early 1970's to play a similar role and accounted for mostof the R&D effort in that country. Thus in 1975, R&D expenditures as apercentage of GNP were about .5%, with 80% of their financing from the publicsector. However, in the 1980's as the industrial sector matured, requiredmore advanced technology, and had more difficulty acquiring it from abroad,the private sector started to invest very heavily in its own R&D. CurrentlyR&D expenditures as a percentage of GNP are 2%, and 80% is financed by theprivate sector. As a result, publicly funded R&D institutes are nowredefining their role and moving into more basic pre-commercial researchareas. D

Thus, the role of R&D institutes changes over time and depends onthe level of development of the economy in question. For most developingeconomies, focusing more on intermediation and support for the acquisition,assimilation, adaption and improvement of technology obtained primarily fromabroad is most appropriate, except for some R&D focused on special problems,such as use of particular local raw materials or specific production problemsor product characteristics of the local environment. It is only as theeconomy matures and has difficulty in obtaining technology from abroad thatthere is a greater role for more basic research.

A final point is that most of the action in terms of technologicalimprovement and development has to take place at the level of the firm, not inseparate R&D laboratories. As a result, strong incentives and penalties arenecessary to make firms focus on improving technology and performance. Ofcourse, they also have to have some capabilities in terms of the skills oftheir workforce, engineers, and managers to undertake technological effort andimprove their technological performance. Firms need supporting networks andinstitutions for technological and market information, technical assistance,testing, quality control, and research and development, but ultimately it isthe firms themselves who must want to improve their performance.

D. KEY ROLE OF TECHNICAL HUMAN CAPITAL. INSTITUTIONS. AND NETWORICS

Key requirements for the above are a good technical human capitalbase, appropriate institutions, and efficient networks. The technical humaneiapital base is necessary at two levels. At the university level it isnecessary to have qualified personnel who can monitor technological and othertrends, assess their relevance to the prospects for the country and individualfirms, and help to develop a strategy for reacting to and taking advantage ofthe trends. In addition, high level technical human resources are necessaryto assimilate, adapt, improve, and even develop local technology that may bemore appropriate or otherwise superior to what can be obtained from abroad.

]/ See Dahlman and Kim [1989] for an overview of technological strategy andpolicy in Korea.

- 15 -

At the primary and secondary level, good basic education, includ-ing a strong concentration in technical and engineering areas, is necessaryfor speeding the diffusion and adoption of new technologies, to make localadapt. tons and improvements on the shop floor, and more generally to increasethe e .reness and ability to take advantage of technological opportunities.Here it is relevant that a good part of the success of the East Asian NIEs hasbeen due to the heavy investments that they have made in improving secondaryand higher education, particularly their focus on engineering and othertechnical applied areas (Table 3). Higher education in many Latin Americanand African countries, by contrast, has been giving heavy emphasis to law, thehiumanities, and the social sciences.

TABLE 3: EDUCATIONAL ENROLLMENT RATIOS AND SCIENTISTS AND ENGINEERS PERMILLION POPULATION

NUMBER NUMBERENROLLED IN ENROLLED INSECONDARY HIGHER ED. SCIENTISTS AND ENGINEERS

AS % OF AGE AS % OF AGE IN R&D PER MILLIONGROUP GROUP POPULATION

LOW INCOME 22 34 2 -- --

MIDDLE INCOME 22 49 5 14 --

BRAZIL 16 35 2 11 256 (1982)MEXICO 17 55 4 16 216 (1984)KOREA 35 94 6 32 1120 (1984)HONG KONG 29 69 5 13 --

TAIWANPROVINCE OF CHINA NA NA 8 21 1138 (1986)

SINGAPORE 45 71 10 12 949 (1984)

INDUSTRIAI. MKT 63 93 21 39

JAPAN 82 96 13 30 4743 (1986)UNITED STATES -- 99 40 57 3282 (1986)

SOURCE: Enrollment ratios: World Bank, World DeveloRment ReRort 1988, pp.280-81, except for Taiwan, which is from ROC, Council for EconomicPlanning and Development, Taiwan Statistical Data Book 1987.

Scientists and Engineers in R&D per million population: UNESCOStatistical Yearbook 1988.

- 16 -

However, technical human capital by itself is not sufficient. Ithas to be embedded in appropriate networks and institutions that can tap intoinformation about technology and market trends both worldwide and locally, andto induce local action. These networks and institutions do not developautomatically or quickly. Furthermore, often they are plagued by problems ofeconomies of scale, large differences between social and private costs andbenefits, and lack of appropriability of the results. Therefore, many requiregoverrunent action to get them started or to make them develop ahead of themarket.

The experience of some of the East Asian economies is veryrelevant here. They have also developed a variety of institutions andmechanisms to promote diffusion and efficient use of technology.

In Japan some of the clearest examples date from the periodimmediately following the Meji Restoration (1869). These include establish-ment of government-owned factories in several sectors (textiles, shipbuilding,engineering, steel, paper) to demonstrate modern technology introduced fromabroad. Between 1872 and 1892, the government invited more than 5,000 foreignexperts to help run the government-owned factories and to give training. TheMinistry of Engineering also established schools for engineering, tele-communications, and iron and steel production. Many Japanese were sentoverseas for study and returned to replace the foreign experts in the govern-ment factories an.l training institutions.LD/ In addition, the federalgovernment and the prefectural governments established national testing andresearch institutions to provide technical guidance for industry.L /

In the 1950's and 1960's the Japanese government set up variousfiscal incentives targeted specifically to introduction of new products andprocesses. More general incentives, such as accelerated depreciation,encouraged industrial investment more broadly. However, the size of bothtypes of measures was not very significant even as a percentage of corporatetaxes, and the importance of the more general incentives in particulardeclined sharply after the early 1960's.

The most important mechanisms for promoting diffusion and effec-tive use of technology in Japan have been the subcontracting system, thequality control systems, and policies and institutions supporting small andmedium-scale enterprises. Subcontracting involves a long-term comprehensiveand implicit contract that includes the supply of technical guidance, workingcapital, and even leasing of equipment from the parent firms, as well as

11/ Most of these factories were sold to the private sector in 1880 becauseof a fiscal crisis, but their demonstration effect was very important. SeeNagaoka [1989].

2/ Forty-six such institutions were established between 1894 and 1925 on theinitiatives of prefectures and industrial cooperatives. It is reportedthat some of them contributed substantially to the modernization oftraditional small and medium industries. See Nagaoka [1989].

- 17 -

strong incentives and pressures for the subcontractor to innovate.f/ Sixty-five percent of all small and medium enterprises in Japan produce undersubcontracting arrangements, and 82% of them are specialized in such produc-tion.

The introduction of quality control systems in Japanese enter-prises took place mostly from 1950 to 1965. Two key institutions promotingthis effort were the Japanese Standards Association and the Union of JapaneseScientists and Engineers, which were established in 1945. D An IndustrialStandardization law, establishing the legal framework for developing theindustrial standards system and for administering a certification systemlinked to standards, was passed in 1949, although national certificationactivities actually started in 1921. The certification system encouragedenterprises to adopt quality control systems and also facilitated the develop-ment of subcontracting in Japan. Contacts with foreign experts were also veryinstrument&l in developing a consciousness for quality. / The extensiveadoption of quality control in Japan, and the success of the concept of totalquality control is attributed not only to strong national promotion effortsbut also to the high level of education of Japanese workers, the Japanesemanagement style, which encourages worker participation in production improve-ment (through such mechanisms as quality control circles), and the fiercecompetition for quality among Japanese producers.!&

The Japanese government has also developed comprehensive policiesand institutions supporting small and medium enterprises (SMEs) that includefinancial assistance, tax reductions, technology assistance, facilitation ofinfrastructure for joint businesses, and a favorable legal framework. Tech-nological assistance has included information provided through varioustechnological guidance and support institutions at the provincial level andfactory visits by experts, subsidization of new technologies, subsidies toadaptive R&D projects applied by SMEs, and training programs for engineers andtechnicians working in SMEs (see boxes for information about similar institu-tions in Korea and Taiwan).

13/ See Nagaoka [1989].

14/ Other institutions promoting quality control and productivity improvementhave been the Japan Productivity Center, the Japan Management Association,and the Operations Research Society of Japan.

1/ Seminars by W.E. Deming on statistical quality control in 1950 arousedgreat interest. A study group on quality control sent to the U.S. in 1958was also important. Between 1955 and 1961, the Japan Productivity Centersent about 2500 engineers to the U.S. on study tours related to technology,under an economic assistance program with the U.S.

IV Nagaoka [1989].

- 18 -

SPECIAL INSTITUTIONS AND MECHANISM TO PROMOTETHE DIFFUSION AND USE OF TECHNOLOGY

In Korea, at least six public agencies offertechnical extension services to local firms, particularly smalland medium-'zted one. The Industry Promotion Administration offerstechnical assistance to firms that obtain Korean StandardizationCertificates to en'ble them to improve further their productquality and standardization. The Korea Advanced Institute ofScience and Technology (KAIST) and the Korea Institute of Metaland Machinery (KIMM) have technical extension services that caterto the technical needs of both large and small f'rms. The Smalland Medium Industry Promotion Corporation (SMIPC) provides exten-sion services exclusively to small and medium-industry firms.The Korean Institute for Economics and Technology (KIET) collects,processes, and disseminates scientific and technical informationand publishes monthly periodicals covering various areas ofengineering and new technology development (see BOX 2). Finally,the Korean Productivity Center (KPC) is a major organizationpromoting the adoption of microelectronics-based factory automa-tion by local firms. It has a Flexible Automation demonstrationroom that shows what the technologies can do and offers extensivetraining in the use of the new technologies, as well as technicalassistance to local firms.

- 19 -

BOX2

IMPROVING MARKET INTELLIGENCE AND COMPETITIVENESS

The Korean Institute for Economics andTechnology (KIET) is an autonomous economic research institutionand technical information service center, established to enhanceKorean industries' competitiveness in the world market and to helpthe government and industry. With overseas offices in Tokyo,Washington, Frankfurt, and Hong Kong, much of its work is stronglyoriented toward identifying market opportunities worldwide forKorean products and helping Korean businesses take advantage ofthese opportunities. KIET also has an extensive on-line databaseconnected to Korean and foreign data sources and which can beaccessed from 16 cities around the Korean peninsula.

KIET's Trade Studies Department serves thebusiness sector by analyzing and providing current information onoverseas commodity markets and conducting industrial feasibilitystudies for direct foreign investment by Korean private enter-prises. The Industry Studies Department analyzes industrialstructure, home and foreign markets, and developments in techno-logies and products. Its studies help businesses to formulateinvestment strategy and help the government in making industrialpolicy. The Technology Information Services Department collectsand provides information on technology and business opportunitiesto industries, both through publications and computerizedsearches; its eight branch offices in Korea advise individualenterprises on technology and marketing. KIET's separate Inter-national Economic Survey Division monitors, analyses, and fore-casts developments in the world economy. KIET has cooperativeprograms with overseas research institutes, information serviceinstitutions, and other international organizations.

- 20 -

BOXa

INSTITUTIONS TO PROMOTE THE USE OF TECHNOLOGY

In Taiwan, one of the most effective has beenthe China Productivity Center. Until 1984 it was a productivityorganization similar to many others that aimed to improve enter-prise management and industrial technology. In 1984, however, itwas merged with the Factory Automation Task Force (FATF) that hadbeen set up by the Ministry of Economic Affairs. This was topromote automation in Taiwanese industry in response to rapidlyrising wage rates and increased competition from lower-wagecountries, on the one hand, and the trend towards increasedautomation and flexibility in the developed countries, on theother. Besides an extensive array of courses and other teachingprograms, this organization visits plants throughout Taiwan andhelps manufacturers solve specific problems. In the course of itsplant visits, the CPC has discovered that in 40% of the cases theproblems have been the lack of adequate rationalization of theproduction process because of insufficient knowledge of industrialengineering. It, therefore, sends out a team that includesindustrial engineering, mechanical design, mechanical manufac-turing, industrial planning, and computer aided design/computeraided manufacturing (CAD/CAM) experts. The team studies theproblems and makes suggestions for improvement, which the enter-prises decide whether to implement. Besides it own staff, the CPCrelies on consultants and engineers borrowed from privatecompanies and other government organizations. It also usesindustrial engineering students who go through a special summertraining course. In a period of about two years the CPC visitedmore than a thousend plants and made more than 4,000 suggestionson improvement. It has also carried out more than 500 researchprojects on improving production efficiency. Finally, the CPCworks as a catalytic agent linking entrepreneurs with researchcenters to solve difficult techniL-l problems.

- 21 -

III. IMPLICATIONS FOR THE BANK

The trends in technical change described above have implicationsfor the Bank at three levels, with the Bank needing:

e To be on top of the new technological and market trends;

* To know more about the interaction between technology and economicdevelopment; and

* To design and implement prcjects that can help developingcountries take more advantage of the opportunities offered bytechnology.

In the past few years more and more Bank clients are asking forpolicy advice and project assistance in developing their technologicalcapability. In addition, the success of structural adjustment and industrialrestructuring operations also depends on the capacity to respond to newparameters that include a lot of technological elements and even specifictechnology choices.

A. IMPLICATIONS FOR MONITORING AND ASSESSMENT

In light of the rapid rate of technological and other changes andof their implications for developing countries, the Bank needs to keep abreastof the main technological, marketing, and investment trends. This is impor-tant for the viability of the specific industrial projects the Bank supports,as well as for the more general industrial restructuring, structural adjust-ment projects, and policy advice on industry, education and technology issues.The Bank is uniquely placed as a transnational, cross-sectoral institution todevelop formal and informal networks of information on trends in technology,industrial investment, and competition.

However, as currently structured, the Bank is not well organizedto monitor and assess most of these new trends in any systematic way. TheBank could remedy its lack of a central locus for detailed sectoral expertiseby tapping into existing information networks. This includes subscribing todatabases such as SRI, Chemical Abstracts, etc. Divisions in differentregions of the Bank already subscribe to some of these databases, but there isno systematic coverage.

The Bank also has to develop informal networks with people inorganizations that monitor trends, such as private consulting organizations(Batelle, PA, McKinsey, Arthur Anderson]; national institutions (U.S. Officeof Technology Assessment, MITI's Agency for Science and Technology, etc.],universities [Science Policy Research Unit at Sussex, Center for PolicyStudies at MIT, etc.], and international organizations [OECD Science andTechnology Directorate, UNIDO, UNCTAD, UN Science and Technology Fund, etc.]The objective here should be to get assessments from these more specializedagencies on what some of the emerging trends and issues are in order to studypossible implications for the Bank and its clients.

- 22 -

In addition, the Bank must contract and carry out research andpolicy work in areas particularly relevant for the Bank and its clients. Someof this work could possibly be funded through REPAC, but there may be a needfor a specific budget for this. The idea would be to go beyond a focus ontechnology trends and potential application to include expected rates ofgrowth of demand and market trends, investment requirements, and likely impacton Bank projects and Bank clients.L /

To some extent, the Bank is already doing this. The problem isthat there is no centralized locus for this work to which staff could bereferred for specific aspects. Because of this lack, it is not known whatpart of the relevant information or trends is not being covered. Furthermore,since many of these trends are interconnected and have implications across aw'de range of sectoral specialties, some of the implications of the largerpicture likely are missing. Therefore, it would appear that some centralmonitoring unit could play a very useful function. It could identify data-bases (the ones the Bank already has and ones it should subscribe to), serveas a reference center, promote informal contacts with specialized agencies,and propose additional research and policy work.5/ A study to identify howthe Bank might organize and staff such a unit may be appropriate, with theidea that the unit could start out small and expand only as it proves itsrelevance and effectiveness.

B. IMPLICATIONS OF RESEARCH AND POLICY WORK ON THE ROLE OF TECHNOLOGY INECONOMIC DEVELOPMENT

However, the role for the Bank is not just monitoring and assess-ing the likely impact of rapid technological and other changes. As a develop-ment institution with a cross-sectoral and cross disciplinary approach, andthrough its policy dialogue and operations, it can cover everything frompolicy reform to financing of specific hardware, programs, institutionbuilding, and educational and research infrastructure. It can also play a keyrole in helping countries take advantage of some of the potential offered bytechnology and technical change. Policy reform, for example, can range allthe way from liberalizing restrictive import policies, to direct foreign

IZ/ Some of this is done in the context of industrial restructuring operationsin specific country projects. Specialized consulting organizations arecontracted to do studies on key worldwide trends in specific subsectorsand what they imply for the strategy of the particular client country.

it/ This unit could, for example, sponsor a few world studies on specificsubsectors of particular relevance to Bank clients such as textiles andgarments, footwear, steel, electronics, telecommunications, etc. Thesecould be contracted out to specialized consultants as is done in the caseof industrial restructuring operations noted above. The difference wouldbe that the results would be made available to all relevant Bank divisionsand clients in order to maximize the return from such scale economies oLglobal studies, instead of having to hire consultants to redo a globalstudy every time a new country client asks the Bank for assistance for anoperation in that sector.

- 23 -

investment and technology transfer, greater adoption of norms and standardsfor increasing the diffusion of techr.ology and increasing quality, betterintellectual property protection, and to the removal of restriction onresearch institutes and university faculty regarding consulting services toindustry. Policy reform in the technology area can also be linked to moregeneral policy reform to improve productive and allocative efficiency through-out the economy.

In order to do this successfully, however, the Bank has toincrease its own understanding of the role of technology and technical changein economic development. Examples of three issues on which the Bank needsbetter understanding in order to play a more effective role are the following:

The first is the relationsbip between macroeconomic conditions andthe general policy environment, on one hand, and technological effort andtechnology policy, on the other. Research to date has shown that there mustbe pressures and incentives in the environment to stimulate firms to payattention to improving quality and efficiency, and to respond more effectivelyto changing demand and supply for goods, services, and inputs. However, thereis still relatively little understanding on how to improve the capacity torespond to those pressures and incentives in different settings, and what arethe key bottlenecks. In addition, there are still many unanswered questionsregarding the most effective mix between government-sponsored efforts andprivately sponsored efforts to speed the development of some of thesecapabilities, or of how long they take to develop under different socio-economic circumstances.

The secon issue is how best to help clients with very differentcapabilities. The problems and needs of the upper-middle-income and relative-ly large economies such as Brazil, Mexico, and Korea, which already have largeindustrial sectors and significant technological capability, are very dif-ferent from those in small, low-income economies such as Guinea-Bissau,Bhutan, Laos, Ethiopia, Haiti, and Nepal, which are still dominated bytraditional agricultural technologies and have very underdeveloped techno-logical capability and technical human resources.

In instances where some of the basic capabilities already exist,it may be largely a matter of more and better technical information services,developing missing specialized technological capabilities, and strengtheninginteraction among specialized agents such as research institutes, uni-versities, engineering consultants and firms. This would all be under anappropriate general policy environment fostering increased efficiency. Inothers cases, where the basic technological capabilities are not yet very welldeveloped, it may be more a matter of building up the basic capabilities,consciousness of what can be done with newer technologies, and institutions tohelp the economy to take advantage of technology. This may require largelytechnical training, the development of some engineering capabilities, verypractical hands-on technical extension services in selected industries, thedevelopment of a small core of technology specialists to do technologyassessment and selection in a few relevant sectors of an economy, etc. Oncethe basic building blocks are in place it might be possible to focus on links,integration, and closer interaction with the macro environment.

- 24 -

A third issue concerns what is the most appropriate technicalhuman capital base to develop for different types of economies. This isclosely linked with the issue of whether it makes sense for a particulareconomy to "leapfrog" or to concentrate its technological efforts in somespecial areas, as opposed to developing generic basic skills. This in turn isrelated to a better assessment of where technologies are going and whatopportunities or threats they pose to a particular country. For example, ifit appears that there are attractive prospects for a particular country insome aspect of biotechnology, or some aspects of informatics, what are thebasic education and skills needed for the different levels of participation inthose special activities? Since specialized technical human resources taketime to develop, what sort of planning mechanism should be used and how shouldthey be financed? Or is it too risky to try to anticipate demand? What hasbeen the experience of some of the countries that have developed very pro-active sectoral strategies?

C. IMPLICATIONS FOR TECHNOLOGY-ORIENTED PROJECTS

Specific technology-oriented projects can involve everything fromdevelopment or improvement of institutions, mechanisms, and networks forcollecting and disseminating technological and market information; acquiringforeign technology; providing technical assistance, and financing techno-logical development within firms; to restructuring public research institutesto respond to the productive sector; and to redirecting the educationalsystems toward educational and technical human resources needed for takingadvantage of technologies.

However, to carry out successful operations, the Bank has to learnmore about implementing them most affectively in different country settings.So far the Bank has done very little in the area of industrial technologydevelopment. D/ Relatively little "cross fertilization" has carried over fromone project to the other. Since information, incentives, and capabilities torespond to those incentives are so closely intertwined, it would appear that amore integrated approach could be effective in some settings because of thesynergies among different components. More needs to be known about when suchsynergies are important, when they imply a need for a more integratedapproach, and when these operations can be done as specific stand-aloneprojects, or as part of industrial restructuring or other adjustment opera-tions. Each approach has some advantages and disadvantages and will work moreor less well in different situations.

In short, there is a need for a better conceptual framework forthe kinds of activities the Bank could promote. There is also a need for afuller inventory and assessment of what the Bank, other institutions, and

19/ For a review of what the Bank has done in area of industrial technologysee the strategy paper developed by the Telecommunications, Electronics,and New Technology Development Division of the old Industry Department,"Industrial Technology Development in the New Industrialized Countries,"June 11, 1987.

- 25 -

countries have done in this area, to develop specific proposals for what theBank could do in the future in different types of countries. The next stepwould be to try some of these new project approaches in selected countries andmonitor them closely in order to build up Bank expertise. After these pilotexperiences, the Bank should be in a better position to determine how muchmore it can do in different types of economies.

- 27 -

REFERENCES

Castells, Manuel; and Laura D'Andrea Tyson. "High Technology Choices Ahead:Restructuring Interdependence," in Sewell, Tucker, et. al. 1988.

Dahlman, Carl, and Linsu Kim. "Technology Policy for Industrialization:Conceptual Framework and Korea's Experience." World Bank, IndustrialDevelopment Division, PPR. June 1988, draft mimeo.

Dahlman, Carl; Bruce Ross-Larson; and Larry E. Westphal. "Managing Technologi-cal Development: Lessons from the Newly Industrializing Countries,"World Development, Volume 15, No. 6 (June 1987)

Dahlman, Carl, and Larry E. Westphal. "Technological Effort in IndustrialDevelopment: An Interpretative Survey of Recent Research," in FrancesStewart and Jeffrey James, eds. The Economics of New Technology inDeveloping Countries. London and Colorado: Frances Pinter Publishers andWestview Press, 1982.

Flamm, Kenneth. Tareetting the Computer: Government SupRort and InternationalCop.etition. Washington, D.C.: The Brookings Institution, 1987.

Flamm, Kenneth. "The Computer Industry in Industrialized Economics: Lessonsfor the Newly Industrializing. World Bank, Industry and EnergyDepartment Working Paper, Industry Series Paper No. 8, February 1989.

Hoffman, Kurt (Consultant) "Technological Advance and Organizational Innova-tion in the Engineering Industry: A New Perspective on Problems andPossibilities for Developing Countries." World Bank, Industry and EnergyDepartment Working Paper, Industry Series Paper No. 4, March 1984.

Hoffman, Kurt, and Howard Rush. "Microelectronics and the Garment Industry:Not Yet a Perfect Fit," in Raphael Kaplinsky. ed. Sussex IDS BulletinSpecial Issue: Comparative Advantage in an Automating World. Vol. 13 No.2 (March 1982).

Mody, Ashoka, "Changing Firm Boundaries: Analysis of Technology SharingAlliances," World Bank, Industry and Energy Department Working Paper,Industry Series Paper No. 3, February 1989.

Mody, Ashoka (World Bank), and Ron Sherman (AT&T Bell Labs), "Leapfrogging inSwitching Systems" (forthcomming in ....

Mody, Ashoka (World Bank), and David Wheeler (Boston University), EmergingPatterns of International Competition in Selected Industrial ProductGroups" World Bank, Industry and Energy Department Working Paper,Industry Series Paper No. 2, February 1989.

Nagaoka, Sadao. "Overview of Japanese Industrial Technology Development."World Bank, Industry and Energy Department Working Paper, IndustrySeries Paper No. 6, March 1989.

- 28 -

OECD. "Technological Development and Industrial Adjustment," Annex II ofChapter 6 in Structu:-al Adjustment and Economic Performance. Paris:OECD, 1988.

Sewell, John W.; Stuart K. Tucker, et al. Growth. Exports. & Jobs in aChanging World Economy: Agenda 1988. (Overseas Development Council:U.S. Third World Perspectives, No. 9) New Brunswick (USA) and Oxford(UK): Transaction Books, 1988

U.S. Congress, Office of Technology Assessment. Computerized ManufacturingAutomation: Employment. Education. and the Workplace. Washington D.C.:GPO, 1984.

World Bank. "Strategy Paper: Industrial Technology Development in the NewIndustrialized Countries," Telecommunications, Electronics, and NewTechnology Development Division, Industry Department, June 11, 1987.

S-48a

- 29 -

INDUSTRY SERIES PAPERS

No. 1 Japanese Direct Foreign Investment: Patterns and Implicationsfor Developing Countries, February 1989.

No. 2 Emerging Patterns of International Competition in SelectedIndustrial Product Groups, February 1989.

No. 3 Changing Firm Boundaries: Analysis of Technology-SharingAlliances, February 1989.

No. 4 Technological Advance and Organizational Innovation in theEngineering Industry, March 1989.

No. 5 The Role of Catalytic Agents in Entering International Markets,March 1989.

No. 6 Overview of Japanese Industrial Technology Development,March 1989.

No. 7 Reform of Ownership and Control Mechanisms in Hungary and ChinaApril 1989.

No. 8 The Computer Industry in Industrialized Economies: Lessons forthe Newly Industrializing, February 1989.

No. 9 Institutions And Dynamic Comparative Advantage ElectronicsIndustry in South Korea and Taiwan, June 1989.

No. 10 New Environment for Intellectual Property, June 1989.

No. 11 Managing Entry Into International Markets: Lessons From theEast Asian Experience, June 1989

No. 12 Impact of Technological Change on Industrial Prospects for theLDCs, June 1989

Note: For extra copies of these papers please contact Ms. Wendy Youngon extension 33618.

- 30 -

ENERGY SERIES PAPERS

No. 1 Energy Issues in the Developing World, February 1988.

No. 2 Review of World Bank Lending for Electric Power, March 1988.

No. 3 Some Considerations in Collecting Data on Household EnergyConsumption, March 1988.

No. 4 Improving Power System Efficiency in the Developing Countriesthrough Performance Contracting, May 1988.

No. 5 Impact of Lower Oil Prices on Renewable Energy Technologies, May1988.

No. 6 A Comparison of Lamps for Domestic Lighting in Developing Countries,June 1988.

No. 7 Recent World Bank Activities in Energy (Revised September 1988).

No. 8 A Visual Overview of the World Oil Markets, July 1988.

No. 9 Current International Gas Trades and Prices, November 1988.

No. 10 Promoting Investment for Natural Gas Exploration and Production inDeveloping Countries, January 1989.

No. 11 Technology Survey Report on Electric Power Systems, February 1989.

No. 12 Recent Developments in the U.S. Power Sector and Their Relevance forthe Developing Countries, February 1989.

No. 13 Domestic Energy Pricing Policies, AFril 1989.

No. 14 Financing of the Energy Sector in Developing Countries, April 1989.

No. 15 The Future Role of Hydropower in Developing Countries, April 1989.

No. 16 Fuelwood Stumpage: Considerations for Developing Country EnergyPlanning, June 1989.

No. 17 Incorporating Risk and Uncertainty in Power System Planning, June1989.

No. 18 Review and Evaluation of Historic Electricity Forecasting Experience(1960-1985)

No. 19 Woodfuel Supply and Environmental Management

Note: For extra copies of these papers please call Ms. Mary Fernandez onextension 33637.