The entire increase of technology in underdeveloped countries comes from the advanced capitalist countries for apparent reasons, which is the highlight of the discussion. Multinational corporations play part in technology transfer, the motive being profit maximization for that parent company through their subsidiaries. These corporations behave as the main instrument of technology transfer, through either their subsidiaries or through contractual contracts created using developing countries. The concept would be to bring mechanized processes and equipments that aren’t in your area available.
We’ve got the technology supplier typically takes top of the hands because of his monopolistic strength that comes from the patents protection for differentiated products and procedures. Very frequently, the conditions and terms of transfer are arbitrarily settled under highly imperfect market conditions through the technology offering multinationals. Advanced nations have the benefits of reduced population density, even distribution of national wealth, high quality lifestyle, more infusion of capital into development and research, accessibility to skilled personnel inclined towards research etc. Third world countries however are susceptible to the pressures of high population density, uneven distribution of monetary wealth (the indegent be poor and also the wealthy even more potent),moderate or low living standards etc. Capital drain occurs because of heavy borrowings in the World Bank which results in rise in the social overheads. In this situation, it’s difficult for any developing nation to function capital into activities concerning research.
The bargaining power third world countries is weak, as other product use of details about alternate technologies as well as their sources nor the required infrastructure to judge the suitability of equipments, intermediates and procedures. Furthermore, the big area of the increase of technology in developing countries is as a result of the insurance policy of industrialization through import substitution. Change in technology in the designed to the underdeveloped countries is created in many ways. They has sorted out into two broad groups, viz. , direct mechanism and indirect mechanism. The direct mechanism includes change in technology through banks, journals, industrial fairs, technical co-operation, movement of skilled people etc. Here there’s an option for that developing nation to decide on the appropriate technology that most closely fits their requirement. However, this isn’t the main type of technology transfer that advanced nations would like.
The indirect mechanism implies technology transfer inside a “package” or perhaps a “bundle” that contains technology-embodying equipments, industrial qualities like patents and trademark, skill, equity capital, etc. Within this system, a nearby enterprise negotiates with multinational corporations for transport from the needed aspects of technology, and also the conditions and terms are settled via a procedure for commercial transaction. Because the buying and selling partners are unequal, the relation to contract are almost always restrictive and also the cost extended for that technology unreasonably high.