7.2 Technology Generation and Development

Most governments in the developing world today are undertaking major roles in the “formulation, appraisal and implementation of technology-oriented projects”. As far as governments themselves undertake industrial R&D, their role is required, in effectively correlating these activities with the industrial milieu. It is essential to take measures for a sound project selection to monitor and control the process of technology generation and to show an incessant concern for the industrial application of the technology being generated. As far as R&D by the industrial sector is concerned, fiscal policies couched in the form of tax credits, grants, risk insurance etc. coupled with other appropriate incentives can motivate the private sector to invest in in-house R&D.

Government initiatives are most needed in the areas which required high-risk and/or long term investment, and which private industry is unable or unwilling to undertake alone. In addition to undertaking joint research with industry, governments are, therefore, sponsoring large R&D projects in Japan and in the Republic of Korea – projects that require long gestation periods. Even where governments do not directly undertake industrial R&D, they have to provide support services such as higher, specialized educational infrastructure for standardization and quality control, technological information services.

Among the several facets of the government role in utilizing indigenous technologies, one can mention the following:

• providing risk and venture capital for promoting technology commercialization process;

• undertaking necessary risk for technology commercialization or sharing such risk with private industry;

• market protection afforded by policies for promotion of indigenous technological capacity by way of a protected market (with a phased reduction of the extension of protection);

• apart from market regulation, the purchasing policies giving preference to indigenously developed technology products through mechanisms of public procurement.

The role of government is also important as regards support for promoting domestic engineering and consultancy services. Most developing countries place great emphasis on protecting and providing domestic market for local engineering firms either by insisting on making them prime consultants, or as a second best, alternative, sub-contractors. Governments play an important role in dissemination of indigenously generated technologies through different modes such as recognition, promotion and appreciation of inventive and innovative activities, exhibition and demonstration of technologies generated indigenously, etc.

It is indeed paradoxical that in countries where the government assumes directly the role of undertaking activities for generating technologies by their R&D institutions, the necessary successive role of the same government in assuming the tasks involved in commercialization of their research results including risk coverage is not undertaken to any appreciable measure. On the other hand, in countries where the government plays by and large only a promotional role for stimulating activities of technology generation rather than themselves undertaking such activities, their role in undertaking necessary tasks including risk-sharing, fully or partially, in commercializing industrial R&D generated technologies is by far more significant.