ABSTRACT
This chapter aims to define the objectives governments that may have in their policy towards technology transfer (TT) and discusses some basic facts about technological development and TT. Technology creation among some developing countries has widened the potential market for developing countries, but the advanced countries still largely dominate the nature and direction of technical change. There has been very rapid advance in two areas — biotechnology and microelectronics — with major implications for developing countries’ strategy towards TT and indigenous technological efforts. Three types of policies are relevant: direct regulation of the form and terms of TT; policies to build up local technological resources; and general policies towards the economic environment. Much research suggests that active local efforts are needed to ensure efficient TT, with consequent learning effects. Despite the emergence of “new” forms, TT through direct foreign investment remains the dominant model.
