Multinational corporations and national technological capability

By:

Pillai , P. Mohanan

Contributor(s):

Shah, Jayshree

Material type: Text

TextPublication details: Ahmedabad; Sardar Patel Institute of Economic and Social Research; 1988Edition: 1st edDescription: 90 pSubject(s):

International business enterprises

DDC classification:

338.88 Pil

Summary: Are there signs indicating positive contribution by Multinational Corporations (MNCs) towards building up national technological capacity in the third world countries? This study proposes to answer this question in the light of Indian experience. In order to trace the influence of MNCs in building up India's technological capacity a comparative study is made to differentiate the technological strategy of as between firms with or without the control of MNCs and its effect on the sequential stages of learning process in their growth path. The methodology of the study consists of drawing general inferences by observing the behaviour of firms under different degree of foreign ownership/control in two industries viz (1) Drugs and pharmaceuticals (2) Electronics in regard to: (a) Changes in the negotiating capability as reflected in the terms and conditions of imported technology. (b) In building the imported technology with adoptation to national production conditions by establishing linkages with the national technological infrastructure. (c) Generation of modified/new technology elements-product addition or process changes and innovations. The study tends to suggest that foreign investment as a source of technology transfer does not impart the advantages of internalised learning. The relationship between transfer of techno logy from MNCs and the development of local technological capability is not generally complementary; often the former is in conflict with latter in more than one way. Technology transfer in highly packaged form limits the freedom to make choices and to experiment with changes in basic designs and material specifications and thus precludes the possibility of learning by doing. MNC controlled firms do not respond to the pressures of local environment for adaptation and assimilation. Intra-mural research for product innovations does not come through in the case of MNC controlled firms, Therefore, the movement of MNC controlled firms along the technology dependence-independence continnum becomes tardy.

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Holdings
Item type	Current library	Call number	Status	Date due	Barcode	Item holds
Books	Gandhi Smriti Library	338.88 Pil (Browse shelf(Opens below))	Available		41117

Total holds: 0

Are there signs indicating positive contribution by Multinational Corporations (MNCs) towards building up national technological capacity in the third world countries? This study proposes to answer this question in the light of Indian experience.
In order to trace the influence of MNCs in building up India's technological capacity a comparative study is made to differentiate the technological strategy of as between firms with or without the control of MNCs and its effect on the sequential stages of learning process in their growth path. The methodology of the study consists of drawing general inferences by observing the behaviour of firms under different degree of foreign ownership/control in two industries viz (1) Drugs and pharmaceuticals (2) Electronics in regard to:
(a) Changes in the negotiating capability as reflected in the terms and conditions of imported technology. (b) In building the imported technology with adoptation to national production conditions by establishing linkages with the national technological infrastructure.
(c) Generation of modified/new technology elements-product addition or process changes and innovations.

The study tends to suggest that foreign investment as a source of technology transfer does not impart the advantages of internalised learning. The relationship between transfer of techno logy from MNCs and the development of local technological capability is not generally complementary; often the former is in conflict with latter in more than one way. Technology transfer in highly packaged form limits the freedom to make choices and to experiment with changes in basic designs and material specifications and thus precludes the possibility of learning by doing. MNC
controlled firms do not respond to the pressures of local environment for adaptation and assimilation. Intra-mural research for product innovations does not come through in the case of MNC controlled firms, Therefore, the movement of MNC controlled firms along the technology dependence-independence continnum becomes tardy.

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