Technology transfers as an alternative to export

3 weeks ago

The Covid 19 pandemic has shaken the world in the first few months of 2020. On the health level of course, but also on the economic level.  Why the entire world? Because, for decades, the countries and peoples of the world have been connected and interdependent.

As the global economy began to collapse, voices have been raised here and there to denounce the misdeeds of this globalization, to announce that nothing will ever be the same again and to encourage the implementation of new solutions, such as the relocation of essential productions (not only surgical masks…).

Is this a stop to the expansion of international trade?  

Obviously not! But this Covid-crisis may have the beneficial effect of leading to reflections on a more virtuous conception of international trade. From its traditional definition as “exchange of goods around the world”, international trade could evolve into “exchange of know-how around the world”.

This exchange of know-how is commonly referred to as “international technology transfer”.

For innovative and dynamic firms, the notion of a domestic market that would be distinct from the international market is no longer relevant. Such companies must consider the international market from the start. Indeed, the narrowness of the niches in which their products are successful rarely allows economic viability on the domestic market alone. Moreover, the permeability of borders to products, but also to the ideas that renew and destroy them, accentuates the pressure of foreign competition on national soil. Research and development programmes, which create, bring to life and then let disappear in a decade, sometimes less, new processes and objects, are nowadays determining elements of international exchanges and of the strategies of companies wishing to have a strong presence in several areas of the world.

Should we then continue to consider international trade in the traditional way: Irish whisky against French cognac? For this type of product, of course! But for innovative companies, the fruits of their technological progress are more effectively disseminated through the granting of manufacturing licenses, whether or not they are accompanied by direct industrial investment abroad. If such operations are decided on wisely, prepared carefully and negotiated professionally, they constitute a very effective means of international development for companies.

Technology transfers also play a driving role in sustainable development today: while the growth of traditional international trade has resulted in increased inequalities in the international sharing of wealth and economic power, technology transfers, by promoting the creation of local added value and the local use of natural resources, have become a more effective means of promoting sustainable development. For these reasons, international technology transfers have the potential to be a preferred form of trade in post-Covid world trade.

Contact me at claudine@infinite-value.fr if you want to exchange on this topic. Also feel free to visit my website www.infinite-value.fr to know more about my services.