14 June 1993

Doc. 6867

1403-10/6/93-4-E

OPINION

on North-South technology transfer1

(Rapporteur: Mr TUMMERS,

Netherlands, Socialist Group)


      The present opinion on the report prepared by Mr Roseta on behalf of the Committee on Science and Technology (Doc. 6866) will concentrate on the economic aspects of north-south technology transfer.

      As the report points out, north-south relations have undergone profound changes since the end of the Cold War. Developing countries can no longer turn to the one superpower, with the threat that if its plea is not heard it may turn to the other. Rather, they are left in an increasingly bitter race with other poor countries for scarce investment through official or private channels. With budgetary difficulties at home, industrialised countries are becoming less and less generous with their official development assistance, and private investors more and more tempted to invest in the "north" itself, or in the more wealthy among the newly industrialised countries (NICs), rather than in the less developed countries.

      The generation and transfer of technology becomes the key to long-term economic development, for while aid in itself can bring immediate and temporary relief, it can not alone ensure stable economic development. The question then becomes how to obtain and further develop new technology — by which term is meant any knowledge pertaining to or surrounding technology itself, including managerial and administrative know-how necessary for its use and "marketisation".

      Here it is important to recall a few characteristics of modern technology. Firstly, it is rarely tangible, and it changes its contents constantly, indeed more and more quickly for every passing year as the speed of technological development accelerates. Secondly, technology is normally not in the hands of governments (at least not technology that is commercially viable), but rather constitutes the possession (economists call it "appropriability") of individual companies, especially those operating multinationally.

      The importance of multinational corporations for north-south technology transfer was recognised by the Parliamentary Assembly already in its Resolution 639 (1976), which called on them to "to have due regard to the specific needs and conditions of developing countries, with a view to making a contribution to their economic and social progress, for instance through the setting up of joint ventures". (Indeed, the Rapporteur for that report was our present Chairman, Mr Holtz.)

      If it is less than likely that governments of the north will readily give away cutting-edge technology knowledge to governments of the south, it is more than unlikely that companies will do so, for it constitutes their most valuable asset of today, and their only insurance for the future.

      In other words, nations of the south are increasingly "condemned" to relying on foreign direct investment by companies for their long-term technological, and hence economic, development. For it is only within multinational co-operation — say between headquarters and subsidiaries in the north and subsidiaries in the south — that the latest technology will be shared. And multinationals will increasingly only come to those developing countries that provide a "fertile climate" for their investments — in terms of the educational quality of the work force, the infrastructure in transport and other fields, the political stability and, increasingly, democracy (for only free people will think creatively).

      Therefore, let us cease thinking of technology transfer as something that is only or even mainly "state-to-state" or "government-to-government", when it is in fact mostly "intra-company" or at most "company-to-company". Let us stop looking at technology as "a couple of secrets" that, once you lay your hands on them, are yours to cherish and provide you with eternal economic growth — when it is in reality part of a whole package of scientific, managerial and marketing know-how in constant flux, and vitally dependent for its valorisation on the host country's whole economic, educational and political framework. East Asian nations have understood this key to successful "dynamic restructuring", to use the term favoured in the United Nations 1992 "World Investment Report", and are reaching astonishing results, with growth rates of between 5% and 10% per year. Other developing countries are following suit — in Latin America, Africa and the Middle East. The few countries, such as North Korea, that so far have refused foreign direct investment and participation in global economy — thereby depriving themselves of the possibility to form part of the "loop of global knowledge" — do so at their own peril. In a world where the export of raw materials count for less and less, and that of high technology goods and services for more and more, it becomes increasingly important to be host to viable companies, whether domestic or multinational.

      One additional observation may be permitted the Rapporteur, considering his former capacity as Chairman of the Assembly's Committee on Culture and Education. Education is everything when it comes to absorbing, creating and diffusing new knowledge. Specific, scientific and technological education for the specialists — but also general, basic education for them and all those who work in the "periphery of new knowledge" such as in management or marketing. Technology transferred to a developing country with a neglected public education system falls on barren ground, no matter how grandiose that technology may itself be. And democracy and human rights become increasingly critical to long-term economic development, as China and other East Asian nations are now beginning to realise. The trend in the world today is thus in favour of, not against, democracy and human rights.

      A final point raised in the report prepared by the Committee on Science and Technology concerns the Council of Europe's European Centre for Global Interdependence and Solidarity, also known as the "North-South Centre". The report concludes that "the Council of Europe should be urged to make fuller use of an instrument which it has recently acquired and whose capabilities still remain to be fully exploited, namely the Lisbon Centre; its geographical location, composition, function and working methods should enable it to foster dialogue between Europe and its near neighbour Africa, and a major encounter should be organised concerning technology transfer".

      Your Rapporteur does not wish to reject this proposal out of hand, but would recall the Centre's statute, which says that the purpose of the Centre is to "provide a framework for European co-operation for the purpose of increasing public awareness of global interdependence issues, and to promote policies of solidarity in conformity with the aims and principles of the Council of Europe". Furthermore, the Assembly's Resolution 982 calls on the Centre to "focus on its central and unique mission of promoting public awareness in Europe of north-south issues and of counteracting "Euro-egoism" ....[and to] build on human rights and democracy, the pillars of the Council of Europe — strengthening the trend toward democracy in the developing world and working toward greater tolerance in Europe".

      It must, therefore, be asked whether a "major encounter" of the kind suggested in the report of the Committee on Science and Technology on the practicalities of north-south technology transfer can indeed be considered to be directed at the task of "promoting public awareness in Europe of north-south issues".

      In conclusion, the Rapporteur commends the excellent and highly constructive report prepared by Mr Roseta on behalf of the Committee on Science and Technology. He nevertheless suggests the following amendment to the draft resolution, contained in Doc. 6866.

—       Add the following new paragraph after existing paragraph 3:

      "Much advanced technology is not in the hands of governments, but rather in the possession of individual companies, especially those operating internationally. It therefore becomes vital to ensure that an adequate amount of private foreign investment is directed toward developing countries. In conformity with Assembly Resolution 639 (1976) on multinational corporations, such investment should respect essential principles of economic and social justice; aim at the transfer of technological, economic and managerial know-how and the training of personnel at all levels; and promote economic and social development."

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      Reporting committee: Committee on Science and Technology (Doc. 6866).

      Committee for opinion: Committee on Economic Affairs and Development.

      Reference to committee: Doc. 6336 and Reference No. 1709 of 22 November 1990.

      Opinion unanimously approved by the committee on 1 June 1993.


1 1 See Doc. 6866.