Transfer of Technology: Competition or Cooperation

Looking at an economy as consisting of several layers of techniques gives us a way to spell out the implications of macroeconomic situations to micro levels. For instance, if macroeconomic consideration point to reducing total employment, a map of the layers of techniques of the economy should be able to pinpoint the firms of different regions that are likely to be effected. In such cases, to be able to delineate the effects of extra final demand of the new investment on the production and employment in the economy, we require best input-output and labour coefficients instead of the average ones that are at present computed worldwide. Similarly, for capacities going out of production either because of the lack of demand, or obsolescence, we want to have the knowledge of the least efficient techniques of production for finding out their economic implications [Azid (2002)]. This will not only would be necessary for predicting the effects of changes in the final demand but will also through a significant light on the international competitiveness. There is a view that one of the reason for the competitive advantage of Japan and West Germany after the war was that while the price structure in the rest of the countries was determined in such a way that the even the least efficient producer may be able to produce without losses, the new industries in these countries were producing with the latest techniques transferred to them by allies, giving them sufficient cost advantage. Similarly, current developing countries are not able to become exporters of manufacturers, as the technological transfer coming their way is of the techniques on the verge of obsolescence in the developed countries.