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EMERGING FROM THE TECHNOLOGY COLONY

:
A VIEW FROM THE SOUTH
Gideon de Wet
Department of Engineering & Technology Management
University of Pretoria, South Africa

Abstract -This paper explores the notion that, even though many for the improvement of the quality of life of their citizens. They
developing countries of the world gained political independence tend to blame this failure on the poor point of departure for their
after WW-II, they essentially remained “technology colonies”. A development trajectories, that was the legacy of their colonial
definition of the technology colony is developed, to serve as masters. The former colonial powers on the other hand, tend to be
framework for the development of guidelines to grow out of this
so hard put competing and surviving in the modern global market
mind set towards national independence, also with respect to the
technological dimensions of the national economic system. Being a place, that they find it extremely difficult to devote significant time
technology colony is neither something to be ashamed of, nor and effort towards the resolution of the problems of the
necessarily a disaster. Remaining one, should not be a fate to be “colonies”, especially if it involves the redress of historical
suffered, but an opportunity to be managed. disadvantages, created by previous generations.
Both parties in the debate find themselves poorly served by
HISTORY their economic advisers, since these experts tend to have a limited
understanding of the technological factors that need to be taken
Even though many countries of the world gained political into account when former political colonies have to also become
independence after WW-II, they essentially remained “technology technologically “independent”.
colonies”. This has had the effect of delaying, if not thwarting the
economic development of such countries and could be one of the FEATURES OF THE TECHNOLOGY COLONY
major reasons for the acrimonious debate between “the North”
and “the South”. The frustration of former (political) colonies The general notion of a technology colony could be explained
arises from a failure to achieve the economic growth, necessary by means of the diagram in Figure 1, where the levels of activity

OVERSEAS TECHNOLOGY SOURCES

Research Developm ent Production

Activity Level Scale
Present M ain Technology
Transfer Channel
Activity Level Scale

W eak Technology
Local Research Local Industry & Industrial
Transfer Flow
Organisations Products

Basic Applied Design and Production/Manufacture Sales
Reasearch Reasearch Development

PRODUCT DEVELOPMENT LIFE CYCLE

Figure 1: Technology transfer channels in the Technology Colony

kind. is at the manufacture and “trade-in-final-products” end has to remain open. This could be termed lateral to serve the market in that particular country. it would have to identify opportunities to export to a market beyond the local limits. Typically the point of departure for this Ø there is a small group of activities at the research end of strategy was to educate and develop the skills of the human the life cycle in the colony. in the sense that these companies did not. with Singapore probably the industrialised. i. This leads to the question: Three features: under what circumstances would the colony have the option of exporting at the desired level? The answer is rather obvious. mainly because the relevant R&D is done “back home”. but not necessarily to supply the rest of the world from that significant way. stages of the product life cycle and the decision about this capacity is taken at the headquarters of the multi-national rather than by the government of the relevant THE TECHNOLOGY COLONY WITH ABUNDANT country. Being a R&D technology colony per excellence is therefore a viable.g. but there is some communication between the local and Gaining technological independence: foreign R&D communities. are compared to the levels in the generic. While marketing and STRATEGIC BUSINESS ALTERNATIVES FOR selling the productive capability of a country can provide TECHNOLOGY COLONIES sustained growth over a number of decades. First World country in the background. is under their own brand names. while activities in the colonialism” paid handsome dividends to these countries. in the form of licensed product high risk. as follows: of the fact that. They base. in the absence of other natural resources. Many countries have made a tremendous success of being These levels of activity in the technology colony in the technology colonies. In the case of South Africa. subsidiary of a multi-national corporation For the purpose of this discussion. So the capacity of the subsidiary will be determined by the simply gained some independence by adding value at earlier size of the relevant market. is how to grow its economy beyond the limitation of its domestic where many companies started to develop their own design market. representing the R&D resources appropriately and to create a business environment that activities of tertiary education institutions.(in terms of monetary value) is plotted over the product life cycle. and possibly that innovation. e. industrialised country tend towards a continuum over the provided that the business concept was understood and managed whole life cycle with a high level of skill. even though it does have aspects of world into the colony. when other countries develop similar capabilities or designs. more than 80% of the value in Although no country in the world is technologically self industrial business activity is done under (foreign) licence. developed this approach to a fine art. One of the major historic reasons for the acquisition of colonies that exports would make business sense if they could be achieved was to gain and secure access to natural resources. Stated differently.e. the strategic issue for the technology colony and consumer electronics (just to cite some illustrative cases). Recent examples are Taiwan in Personal Computers (PCs) and South Korea in vehicles Broadly speaking. to some extent. each colony has to arrive at the point where it wants to have a larger share in the Deriving benefit from colonial status: determination of its economic future. rather than by total global demand. will be referred to as a technology colony of the first the local R&D community to the local industrial sector. The “little dragons” of the Pacific rim have foreground. and sufficient. If the colony therefore has to grow its economy in any NATURAL RESOURCES significant way. . the Ø the predominant industrial business activity in the colony human resource had to be utilised to obtain the maximum benefit. This most sophisticated example. The observation is simply that “technological of the product life cycle. in a region. some R&D made it attractive for multi-nationals to base a significant part of done in local industry and some government-funded their global manufacturing capacity in the country. It therefore at the desired level of quality and at a better price than from became a feature of most colonies that their industrial growth anywhere else. processes. a technology colony that derives its competitive advantage mainly from human resource Ø there is an almost insignificant flow of technology from productivity. typical technology colonies would have to industrialise more than 50% of this activity is subject to market constraints. when one “client” becomes a dominant part of the national often implemented in the colony in the form of a business. such as hard disk technology in the case of Singapore. move away from their product ranges. and even Ø there is a large flow of technology from the developed a lucrative business strategy. the primary consideration for capability in order to compete globally in their own right and establishing a subsidiary of a multi-national in a given country. would evolve around the mining and/or the agricultural industries. subassemblies and final products. The question of the extent to which presentation provides the first general features of the technology this was an intentional strategy rather than a pragmatic recognition colony. simply to achieve levels of growth that would provide for their growing populations.

profile of the colony as that of a primary product supplier to . by their careers and experience as employees in either the primary industries or infra structural enterprises. i. and countries like development and growth. mostly overseas. So when the oil direction of the former colonial power. in order to assist The net effect of these factors is to perpetuate the industrial other developing countries. diamonds and all the other minerals that were the traditional culture rather than in citizenship) that are involved in the providers of economic welfare. Whereas the So they would not only face the displeasure of their colony of the first kind has a “singular” option and the way to present customers. even though the generic strategy of moving “upstream” into forward integration. What universities or employers [1]. This aspect is expanded these countries failed to do however. they produce. reflect their training and their organisational loyalties. Fig. rubber. local. They therefore tend to “stick to their knitting” and if it is to utilise the potential of its natural resources to enhance the are rewarded by their (foreign) shareholders for doing scope and rate of its industrial growth.and that the location of these natural resources would form the industrialised countries. communication networks. clients. approach between them differs in essential ways. thereby adding value at earlier stages of the life development environments. technology-based enterprises. It seems to be almost a logical process that “backward or teach from First World textbooks.again with a preponderance of ownership in the many of these resources are of a finite quantity.e. was to write a textbook on upon later on. institutions are either educated in First World countries. they would become the in the product life cycle seems to be similar. meet with entrepreneurs in cycle and gaining ownership of intellectual property (IP). industry of the (now technology) colony. therefore be decreased in relative terms. that in technology-based ventures. while more technology should be shape them into entrepreneurs for establishing new. railways. Japan and her material would be inferior and would lead to colonial Pacific Rim followers have demonstrated this process over many qualifications not being recognised by foreign years and over a wide range of technological disciplines. the declining value of primary products and the fact that companies . and should they be so bold a to venture and that. and particularly the Third World ones. There are therefore two compelling reasons for goods and other consumables would be established. a trivial problem. 2. power economic disaster. as an limited spectrum of export products such cocoa. Third. as the bank accounts of the Middle Eastern oil distribution and so on. Neither their production and trade in final products end of the life cycle should experience and training nor their environment. one generic element of the strategy for both services. because it reflects the evolution of the engineering is overshadowed by the perception that any other and technical skills base in developing countries. applied research capability and eventually. Stated Unique problem: differently. or become familiar with a turn provides the freedom to export. They therefore have rather limited opportunity kinds of technology colony. That these features wells eventually run dry. sugar. best. transferred in the form of design and development capability. could be explained as follows: South Africa should be prepared to cope with the loss in value of Ø the business orientation of those “foreigners” (foreign in gold. A second feature would be the producing countries demonstrate. or both. is supported by the observations by Peter Ø the business orientation of the natives (native in terms of Drucker [2] about the chances of developing countries to mind set rather than of descent) of the colony is formed industrialise successfully. is not necessarily an infrastructure of roads. i. a commodity provider. the more detailed competition of their present. the managers and engineers involved in mining operations have little if any knowledge of the From the foregoing it is clear that technology colonies of both secondary industries that utilise the raw materials that kinds have compelling reasons to diminish their colonial status. the finer details of how to do this successfully. evolutionary feature. the foreign markets where they are enthusiastic amateurs at colony of the second kind has to follow a more complex strategy. being a technology colony of the nodes that would determine the development of the country’s “second kind”. MANAGING THE COLONIAL STATUS delivering utilities to industry or forming part of government organisations that provide regulatory As indicated before. The insight that this is not so. design and product life cycle. but also have to move smartly into execute it successfully has been developed to a large extent. either as the technology colony of the second kind to escape from that independent local businesses or as subsidiaries of foreign status. This is illustrated graphically wide range of technological activities that do not form in Fig.e. Again. but then there are also the many predominance of nationals from the former colonial power in the countries that had to face the radical decline in the price of their financial and industrial sectors of the colony. The fact integration” should proceed from the later to the earlier phases of that such material is rather inappropriate for the colony the life cycle. basic scientific Ø the teachers and professors at the local tertiary education research capability. is to “integrate backwards” along the to gain training and experience in research. the Arabian countries should have together form an almost insurmountable barrier to real industrial something in place to sustain their economies. 2 indicates that technology transfer at the part of the local technology base. secondary industries to cater for consumer copper and so on.

something foreign. reasoning behind this is threefold: first. but it must be understood that they are not necessarily other development organisations in Africa. second. the intention here is to technology colony. at best be ignored by foreign. local industries. Furthermore. technology colonies of the entrepreneurs in the colony may. second kind have to deal with a wider scope of alternatives and owned. others.many examples could be cited where they were the elements of the transfer process are in place. problem of limiting the scope of technology transfer projects. arises from the concerned. that seems to contain a number of features that may be of companies. similar countries. Much of the actively involved in helping the colony on its way to greater lament about failed development projects of the World Bank and maturity. and may therefore have less need of another discussion on based organisations find difficult to achieve. their particular problems. making the participation of the local government an essential part of success. the author is familiar with the particular case of South negative action if they are identified as future competition to these Africa. technology colonies of the viable technological community are established. the rest sustenance and growth of the technological “implant”. but what is often overlooked is the availability of Rather than to dwell in too much detail on the strategic the scientific and technological skills base to ensure the alternatives that are common to the colonies of both kinds. OVERSEAS TECHNOLOGY SOURCES Research Development Production Activity Level Scale Additional Future Technology Transfer Channels Activity Level Scale Local Industry & Industrial Local Research Products Organisations Basic Applied Design and Production/M anufacture Sales Reasearch Reasearch Development PRODUCT DEVELOPMENT LIFE CYCLE Figure 2: The effect on technology flows resulting from “backward integration” While this is clearly a facetious statement. but they could well face some very third. necessitates long first kind seem to have had a much higher level of success than the term staying power of 10 to 20 year horizons . The to keep the implant alive while other elements of an embryonic. has to be (primarily) a joint effort between emphasise that simple logical considerations are often overlooked local enterprises/entrepreneurs and government. This does not when colonies (or enterprises in colonies) go about technology mean that multi-national corporations would not participate in acquisition and transfer exercises and they fail to ensure that all these efforts . Consequently the conclusion can be made that the “management” of the technological evolution of the . This is clearly an issue that goes beyond the private interest to other. simply because no individual project could afford to “fix” the STRATEGIC CONSIDERATION FOR THE NATURAL national contextual problem in a particular country. sector only. The effort of the discussion focuses on the natural resource rich country. What RESOURCE RICH COLONY normally comes to mind here is the absence of essential elements of infrastructure.

pharmaceuticals. mined ores. . but the profit margin on exports may even be resource base with the appropriate potential. such as aerospace Even though the concept of beneficiation makes eminent sense. space systems. some future strategic goal. processing equipment and so on. where higher than at the next level. Similarly the strategy of solving local problems it beneficial to run some or other export incentive scheme. Ø material intensive products: steel structures. This was referred to before. it is extremely difficult to manage. directions. An example would be that the profit government and private investors would join forces to achieve on selling iron ore could be double that of selling steel sections. abundant supply of coal. the enhancement of the exporting company. to ensure that such a for this can be recognised to be. gaining “design ownership” may depend on the nature and An example is the prepaid electricity meter that was developed in quantity of natural resources available. Broadly speaking it is aimed at gaining economic advantage by increasing the value of primary products before Ever since the notion of industrial clusters had been articulated. Clearly here the government may provide automatically in developing countries. “similar” qualification. This could be illustrated by the evolution of the industries that a ton of pressed motor car body panels is worth much more than were established to serve the mining community in South Africa. Thus a ton of technology colonies have had a powerful concept to work with. and so on. Beneficiation refers to the concept of adding value to raw Strategy 4: Clustering materials. contribution to economical growth and improvement of the While they are not excluded from the primary strategy of balance of payments accrues at national level. defence people are often puzzled by the fact that it does not happen almost technologies and so on. exporting these at world commodity market prices. They have to development arena. Strategy 1: Backward integration Quite often it is found that by solving particular problems in a This strategy is as discussed in the forgoing section. and steel makers weaving a complex portfolio of strategies over time to optimise would find it extremely difficult to enter the motor car design and the net result of their resource investment. Strategy 5: White Space initiatives white goods. there is the benefit of a larger market than the skills base of their human resources. products are created that make sense in other. as well as South America. where there is an South Africa to provide electricity to disadvantaged communities. agricultural Ø primary products: agricultural products. Third. etc. there would be good reasons to consider Even though the concept of prepaid meters has been around for going into (hydro-carbon) chemicals and chemical products. etc. Typically 5 levels of value These industries expanded their product portfolios in many addition are used to indicate different levels of beneficiation. enterprises derive most of their income from exports of reasonably Ø secondary products: spun wool.e. Such initiatives should be conducting a business at the “lower” level of beneficiation may be undertaken within the context of some national strategy. The term White Spaces is used here to indicate the exploration Ø specialised products: medical equipment. motor cars. e. Governments therefore often find in the short term. rolled steel plate is at least 5 times the value of a ton of iron ore. first that the margin on new industry becomes viable. where is somewhat akin to radical innovation . The strategy of beneficiation may indicate the goals of advancing one or more steps along the 5-level scale. This would hardly be an incentive for an iron ore mining company to move into the steel making business. indicating that mining engineers may Technology colonies of the second kind have to be skilled in not feel confident to tackle secondary processing. with some country. large quantum of benefit. both in time and in content. etc. a ton of rolled steel.the to which these will be deployed in combination or in sequence. to the extent that the products/processes selected for countries. i. etc. This refers to the benefit derived by the national strategies outlined in the previous section and decide on the extent economy if an individual enterprise exports products .e. cement. i. and thus a serendipitous export advantage is created. a long time. until today some of these coal. information technology. A few of the key reasons incentives and become the first major client. Second.while it often brings a at least part of the national benefit is handed back to the exporter. the particular design to make it tamper proof. Ø capital products: machine tools. products. wine. may be rather limited thinner than that on local sales. steel sections.g. etc. chemical reactors. such as the vehicle component industry. Strategy 3: Solving local problems. they may find that the human domestic one only. businesses existed in the country before. of opportunities to establish new ventures in areas where no defence systems. At the level of the technology colonies of the first kind. has made it an export product going to a number of other African Strategy 2: Beneficiation countries. the GRAND STRATEGY scope of skill/knowledge of the key technologists and managers. there is the indirect reward understand the advantages and disadvantages of each of the phenomenon. sophisticated components and subsystems. computers.

and one that often has to artificially from wandering into “white space take place under the burden of severe political pressures. vol. such as water supplies. because it is quite often here elements of the National Innovation System (NIS) of technology where radical benefits may be obtained. Yet at operational goals. In this role it is an essential part of the NIS. i. The main role of an ITRI is seen to be the development and transfer of REFERENCES technology to industry to achieve economic growth. Yet we are all fully aware African Development Community) contains very little in that there are hardly any skilled technicians in most parts the way of national management capacity building. nor necessarily a disaster.the majority go into Developing countries are often given foreign aid.g. 6-9. institutions are the “correct” ones for the colony. This refers particularly to the “automatic” national “system” of innovation is relatively recent [3]. 1989. etc. Germany and the UK must therefore be No South African engineer would start the design of a commended as a new and most appropriate trend in product with the explicit assumption that it should international co-operation. environmental control. are at the . the pharmaceutical industries. employment situations where design and development leading to significant competitive advantage. “Aspects of responsibility in technological status symbol that local government officials show to education”.but a significant opportunity may lie in the manufacture of high mercy of government bureaucrats for their existence - grade materials. play their part in creating the best possible growth trajectories for These are still around in countries in Africa. in RSA 2000. they have no stakeholders to protect them from It is clear that the development of an optimal strategy is a budgetary manipulation. regulations. Ø the role and functions of scientific institutions need to be Being a technology colony is neither something to be ashamed revised and adapted. The recent examples of project management. should no longer Australia. In most British Therefore those skilled in the management of technology should colonies. the co-operative require zero maintenance or. That this is not a simple task. albeit in somewhat different evolutionary be a matter of dispute. that forms at least our most obvious market. yet they do achieve more than 10% of engineering graduates enter into high levels of synergy between the elements of the NIS. are forms compared to their almost identical original the ways and means by which the colonial mindset in so many role formats. rather than a [1] G. etc. Fundacion Chile is often become much more of masters of their own destiny.not necessarily more complex than that in a the provision of technology relevant to the industrial developed country. but certainly one that is less comprehensively strategy of the country. supported by donors such as management is reserved for post-graduate short courses. it should not be prevented supported by robust theory and practice. should not be a fate institutions may be limited to R&D capabilities at to be suffered. at worst. cited as an “ideal” ITRI model. operations and project management. Some Many developed countries. Canada. visiting foreign dignitaries. reliability engineering and management capability. also referred to as scientific zoos.2. their economies. Remaining one. The articulation of the concept of the community. or an industrial to see the world in a certain way. it has understanding of the extent to which they have been conditioned evolved to what is now called an “ITRI”. of Africa.11. such as Germany and Japan.. could be shifted towards an to as a university without students in the past. Japan. no. etc. In contrast. CONCLUSION because our textbooks do not address these issues. In the technology colony these of. but in many cases some separate institutions managers are poorly qualified to understand the strategic are present to serve at least some segments of alternatives that need to be considered when either national or government. since they are not seen to be of value to local industry.e. de Wet. and the word maintenance activities in South Africa. Three technologies” as well. pp. so called Science Councils were established. What may be open for alternate views. are the focus of the enterprise . colonies seem to be of cardinal importance for the achievement of Ø the approach to the management of the NIS should be sustained growth away from the dependence status. While the CSIR in South Africa was referred players in the technology colony. health services. formalised and placed under constant review for Ø the reorientation of the tertiary engineering educator improvement. e. elements of the under-graduate engineering curriculum is poor in infrastructure. but an opportunity to be managed. aimed maintenance. and a confidence that they may technology research institute. building corporate management has to decide on the way forward. forming the inputs to semiconductor manufacture. We do not know how to approach such problems. Non-technical universities. examples from the university education of engineers have succeeded in creating management systems that do could illustrate the principle: in South Africa hardly not even try to do central planning. require only programme of the member states of SADC (Southern operator level maintenance. etc. India. assumption that the syllabi taught at First World but the debate about “central planning” is an old one. Status symbol R&D institutions. While an ITRI should focus on complex task . but very seldom to build national subjects such as statistics..

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