Chapter 8 Technology Transfer: Gold or Glitter?—Taiwan's Applicable Experience of Progress and Problems

We said in Chapter 1 that unless hitech and higher—tech are available from the internal research facilities of the corporation/country, they have to be acquired from external source(s) through techtransfer. But there is an inherent conflict in techtransfer. The transferee is with the transferor on technology, but against on trade. Without a definition of techtransfer, protagonists can argue that Malaysia receives excellent techtransfer, while detractors can argue, with equal justification, exactly the opposite. Therefore we need a proper definition of techtransfer: Duplicating on a self‐sustained basis, a foreign process of multiplying manyfold, the output/input ratio in converting physical/mental, matter/energy inputs into directly useable output(s). To assess the role of techtransfer in Malaysian development, it would be instructive to learn from possibly another Developing Asian country with comparable population, size, stability, and geographic location. Since Taiwan enjoyed the current per capita GDP of Malaysia ten years ago, Taiwan techtransfer experience ten years ago would be an instructive parallel for Malaysia today. Since trade is 94.8% of Taiwan GDP, the three leading export industries of Taiwan were chosen‐electric and electronic; textiles, and plastic industries. A sample of eight Taiwanese firms from these industries was selected; so also two multinationals with long‐standing ties with Taiwan. The top management was interviewed in depth on techtransfer as defined above. Six elements of progress and six problems were identified in techtransfer in the mid‐80s. The elements of progress were: (1) Higher‐value manufacture, (2) Spawning of competitive companies, (3) Overseas hitech training, (4) Learning to operate hitech machinery, (5) Indirect acquisition of Know‐Why, and (6) Hitech contacts within the multinationals. The problems were: (1) Manufacturing segmentation, (2) Segmented technical assistance, (3) Overseas manufacture of critical components, (4) Short‐run improvements, (5) Inability to innovate, and (6) Ignored marketing. One of the self‐preservation techniques of the hitech transferor is to provide the glitter and not the gold. If the hitech transferor can make the transferee believe that hitech is transferred in substance while only doing so in form, that would help preserve the former's territory (market) without jeopardizing technology.