Technology Transfer in the TRIPS Age

The Need for New Types of Partnerships between the Least Developed and Most Advanced Economies

by Dominique Foray

ICTSD Programme on IPRs and Sustainable Development Series • Issue Paper 23

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Technology Transfer in the TRIPS Age:
The Need for New Types of Partnerships between the Least Developed and Most Advanced Economies

By Dominique Foray
Ecole Polytechnique Fédérale de Lausanne
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Technology transfer to developing countries has been discussed by the international community for more than three decades. Today, the relationship between technology transfer and intellectual property stands high in the deliberations of the Council for TRIPS, in the discussions of the UN Framework Convention on Climate Change (UNFCCC) and in the implementation of the WIPO Development Agenda recommendations adopted in 2007.
Technology Transfer in the TRIPS Age: The Need for New Types of Partnerships between the Least Developed and Most Advanced Economies (Issue Paper 23) by Dominique Foray (http://ictsd.net/i/publications/50415/) is a recent contribution of the ICTSD Programme on Intellectual Property Rights and Sustainable Development to this ongoing debate. It focuses, in particular, on technology transfer to the least developed economies.
According to the paper, many countries are increasing their exposure to foreign technologies by means of trade and foreign direct investment (FDI), while improving absorptive capacities to facilitate the dissemination of technologies and spillovers within the domestic economy. This represents a virtuous path that a number of developing countries – notably middle-income countries – follow. The experience of LDCs, however, is less promising. FDI and trade remain at a low level and their limited absorptive capacities makes it unlikely that the few foreign technologies that are transferred will disseminate throughout the economy.
The paper makes practical recommendations, applicable, first, to least developed countries (LDCs), that want to use technology transfer as an effective growth engine, and, second, to developed countries that have to comply with Article 66.2 of the World Trade Organisation (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
With respect to TRIPS Article 66.2 obligations, the study suggests that transfer of technology should be part of a principal economic operation and not be a joint product or by-product, contingent on other operations. As far as additional incentives by governments are concerned, they should consist of assistance for projects that are socially beneficial but with low expected profitability for technology supplier firms. This should ensure that conditions for technology transfer involve the choice of relevant partners on both the supply and demand sides, selection of the right area related to a clearly expressed local demand for technology and the creation of organisational forms that favour the consolidation of the transfer (absorption, adaptation and subsequent spillover), as well as the related entrepreneurial dynamic.
In this context, the study advances the need for greater use of public-private partnerships (PPPs) as a mechanism for ensuring the effectiveness of the technology transfer operation.
A central objective of the ICTSD Programme on Intellectual Property and Sustainable Development has been to facilitate the emergence of a critical mass of well-informed stakeholders in developing countries – including decision makers and negotiators, but also within the private sector and civil society – who will be able to define their own sustainable human development objectives and effectively advance them at the national and international levels.
We hope you will find this paper a useful contribution to the debate on IP, innovation and sustainable development, and particularly in responding to the need for increased awareness and better understanding of the complexities of technology transfer and, among others, its interface with IP.
Dominique Foray is Chair in Economics and Management of Innovation, Ecole Polytechnique Fédérale de Lausanne.

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