Börje Kyrklund
Börje Kyrklund is Chief, Pulp and Paper Branch, Forest Industries Division. FAO. Rome.
Any transfer of technology involves much more than a simple purchase of equipment. The key elements are the existence of a good management organization, the proper choice of technology, the securing of the appropriate kind of foreign assistance, and adequate training. The transfer of pollution-abatement technology in the pulp and paper industry presents a number of additional problems, particularly regarding the role of the government and national laws and regulations.
· A number of articles and papers on the transfer of technology have been published in the past 10 years, referring either to industrial technology in general or to the pulp and paper industry in particular.
While reflecting different views on the transfer of technology, these articles all agree on one point: that the transfer of technology is not simply a matter of purchasing equipment. It encompasses a number of activities which need to be taken into account during the initial planning of the project, then during the plant construction and start-up, and also during the actual operation of the plant.
Various types of technology can be transferred in the pulp and paper industry, even when departments as specific as pollution abatement and environmental management are involved. These may be purely process technology, or they may relate to licensing agreements regarding the manufacture of equipment, or they may comprise composite technology, which includes setting up a plant and operating it. Nevertheless, the basic features of technology transfer are essentially the same, although the way transfers are made may vary considerably.
A review of projects in various developing countries shows that the basic reasons for success include:
· the choice of a technology tailored to fit local and prevailing conditions, both in design and application;· suitable equipment;
· appropriate training of both management and operational personnel prior to start-up, and continued training during the early stages of plant operation;
· availability of detailed operating manuals.
Whenever projects were unsuccessful, the main reasons were:
· unsuitable equipment and no consideration given to the standardization of motors, pumps, process controls and other components;· defective construction and equipment installation;
· no advance training of local personnel before start-up, and insufficient foreign personnel;
· no proper operating manuals available;
· turnkey contracts with no provisions for setting up management services after completion of the installation.
These lists, especially the second, could be expanded considerably, but they suffice to highlight some important points about the transfer of technology.
The first requirement for the successful transfer of technology is the existence of a good management organization. This is not always well understood.
PAPER MILL IN OPERATION: where technology transfer finishes
Management. The first requirement for the successful transfer of technology is the existence of a good management organization. This is not always well understood. The setting up of a local project management group should be given top priority. This management group should preferably remain the same throughout the project, and it should be given the necessary authority for decision-making, at least at a functional level. Higher management levels may also be involved from time to time in making major decisions.
Once the project management group is formed, it should examine the possible constraints on project implementation resulting from the organizational structure of the company. One example would be the lack of liaison between this group and the purchasing department: the latter might feel that its authority is being threatened if it is simply "told" to purchase certain equipment. As a result, it may start raising procedural obstacles, causing considerable work delays; this, in turn. would increase a project's cost. Such complications could be avoided by inviting a representative of the purchasing department to take part in meetings whenever the selection of equipment is discussed, or by having such a representative as a regular member of the group.
Since it is the company's higher management level that establishes the project management group, it should be aware of the organizational pitfalls within the company, and take these into account from the beginning. Otherwise, it may well be that failure of the project or increased cost is caused by the higher management itself, regardless of the quality of the individuals in the project management group.
The choice of a technology. The transfer of technology is not an abstract concept. It is always conditioned by the concrete circumstances of its application. Here are some guidelines for the selection of technology.
· Identification of the objectives of the envisaged environmental management or pollution-abatement activities. These may relate to environmental legislation or to agreements between the companies and the authorities.· A survey of technologies available for pollution abatement, for either internal or external measures.
· Evaluation of the level of local technical development. Here there may be a considerable number of constraints on the application of certain types of technology.
At this point, there are two main questions to ask. First, is the technology suitable for the objectives? Second, if so, is it suited to the local level of technical development, or can it be adapted to local conditions?
If the answer to either question is negative, the desirability of using the technology in question should obviously be reconsidered. On the other hand, if the answer to both questions is positive, a survey of the requirements for adaptation and transfer would follow, as well as an estimate of the costs involved. These costs, together with information on costs of plant capital and operation, would then be examined to evaluate whether the proposal is economically acceptable. At this point we can say that the transfer of technology is now beginning.
One important point to consider, when technology and equipment are being selected, is their compatibility with those being used in other departments of the mill. Ancillary items such as motors, pumps, instruments and controls deserve particular attention. In this way, a spare-parts inventory can be kept to a minimum length and, at the same time, the maintenance crew will be familiar with the equipment.
LABORATORY PULPING OF WOOD SAMPLES: where the transfer of technology starts
Foreign assistance. The need for outside assistance in one form or another is inevitable in planning technology transfers. If a company already has a foreign technical partner conversant with the technology involved, it might be able to provide all the foreign assistance needed. In fact, this partner would be the best agent for this purpose, since it would already be familiar with the managerial and technical aspects of the recipient company.
In other instances the company will have to resort to contractors of turnkey projects, consulting companies or individual consultants from abroad. A manual on how to deal with consultants in developing countries has been published by UNIDO (1973). It contains, among other things, useful information on how to formulate contracts with consultants.
In defining the requirements of foreign assistance for the transfer of technology, the specific activity for which assistance is sought must be identified. The service required may be:
· technical assistance for the selection of technology, the purchasing and installation of equipment or the start-up and operation of equipment and plants;· economic services relating to overall economic planning of pollution-abatement measures and environmental management for the pulp and paper mill;
· management services, which could mean environmental management in general, the overall management of the project, or the management of specific aspects of the project's implementation;
· training assistance, both abroad and in the company's own country.
Whenever foreign assistance is involved, cultural problems and shortcomings in communications on a human level are bound to arise between the technology supplier and its recipient. These problems do not relate simply to East-West or North-South differences in backgrounds. There is an abundance of cultural differences within regions as well, especially in areas as diverse as Asia.
It is important to recognize this, starting at the negotiation stage. Failure to do so may result in financial losses, either through technical errors and misunderstandings or through delays caused by human failures in communication.
To illustrate the type of confusion that may arise between local contractors and foreign consultants, let us take a well-known construction material, concrete. In Canada, to mention one country, concrete has many grades and is defined according to use in many ways: thus, there are three grades of Portland cement. There is a definite requirement about the water/cement ratio for various structures. There are specifications for types and properties of aggregates for various uses. There are also definite requirements about the consistency of the concrete sludge used for various structures.
But in spite of clear specifications prepared by the foreign consultant in a given developing country along such lines, the local contractors may recognize concrete simply as concrete, without any distinction, and make their offer accordingly. They may also, if they get the contract, use their own type of concrete, which may or may not be able to withstand the load that will be applied in the future installation.
To avoid such mistakes, the consultants must be aware of the fact that offers submitted by contractors in developing countries are not always for work in accordance with the given specifications. They must, consequently, check details and supervise the work closely to prevent possible failures in the project.
There are basically two kinds of consultants whose services may be required for technology transfer: (1) short-term consultants, for specialized tasks during planning, purchasing, engineering, construction, installation, start-up and so on - most of the consultant services in environmental management and pollution abatement at a mill level would be of this kind; and (2) long-term consultants, usually needed for management of the plant operation after start-up and very rarely required for pollution-abatement measures.
At times, complications may develop between consultants and their employees. When short-term assignments are involved, consultants know that their work will usually last less than a year and that no difficulties will arise when it is completed. Consultants on long-term contracts, however, may, after a period of adaptation, begin to enjoy the developing country's way of life and the salary offered. As a consequence, they may attempt to have their contracts prolonged, arguing that "the local engineer is not able to take over the plant in the foreseeable future" or "the basic educational level of the local workers is not as high as originally assumed when the training period was planned". At this point, an inquiry should be made to ascertain whether the consultants have deliberately failed to train the local personnel. If so, they should be replaced. Often, however, such a failure is caused by the consultants' having to meet production targets rather than achieve training targets.
Training. The training requirements for the project must be established in its initial stages and training provided to the personnel prior to startup. In the case of pollution abatement the instruction essentially relates to four different groups of activities: functional management, manufacture of equipment, operation of equipment and plants, and preventive maintenance.
One of the most important aspects of industrial training in developing countries is preventive maintenance. Although management usually realizes quite fully that if a machine breaks down it has to be repaired and that, consequently, there must be a specialized crew at the plant, very little in fact is done to prevent breakdowns from occurring. The maintenance unit is seen more as a repair crew than as a proper preventive maintenance group. Even where the necessity of preventive maintenance has been understood, it has often been applied unsystematically. There is a real need for regular maintenance schedules for inspection, cleaning, greasing and the like.
Training periods will vary considerably. They may involve training abroad for short or long periods, not only at the management level but also at that of the skilled worker. Decisions on this question must be taken at the start of operations and suitable training facilities identified or even established, if necessary. In addition, there needs to be continued training after start-up. This presumes that appropriate operating manuals have been prepared well in advance and are ready for consultation as soon as they are needed. Furthermore, foreign assistance may be necessary for some time before operators and other personnel have become sufficiently acquainted with the new technology.
Training may involve considerable cost, and it is therefore essential that training requirements be evaluated thoroughly when the final choice of the technology is made. For the same reason, trainees must ultimately be given positions and responsibilities for which they have been trained. Otherwise, frustrations will be created and the trained staff may soon seek employment elsewhere.
Small-scale mills. The preceding considerations on technology for pollution abatement seem to be valid only for comparatively large pulp and paper mills which can afford to hire foreign consultants and provide for the staff. However, the majority of pulp and paper companies in developing countries are comparatively small. Although the guidelines provided may be applicable to companies with total production capacities in the range of 50000 tonnes and above per year, it is difficult to envisage that the same approach could be used by a company producing only 5000 tonnes per year.
However, the size of the company is not the only element that determines the methodology to be applied in the transfer of pollution-abatement technology. Although one company alone may not be able to carry the costs of transfer, a number of small mills can be associated in such an operation at a country or sub-regional level.
In such cases the transfer of technology to the small mills can be carried out through essentially four types of intermediaries or combinations of intermediaries, depending on the size and structure of the industry in the chosen area:
· through a government body set up specifically to transfer pollution-abatement technology;· through the manufacturers' association, by arranging training facilities and providing a forum for exchange of experience, possibly in cooperation with the government;
· through the manufacturing of pollution-abatement equipment and the creation of specialized local consulting services with outside contacts;
· through an already-established large-scale local pulp and paper mill.
In all instances, the intermediaries would most likely follow the general methodology described for the transfer of this technology first for themselves. Regardless of how the final transfer is achieved, it should be kept in mind that the technology requirement and the pollution-load objectives for its abatement in small-scale mills are almost by definition different from those of large mills.
The role of governments. The primary role of governments in environmental management is to provide guidelines for all national industries and to monitor the steps taken to meet these guidelines. This applies to pulp and paper industries as well, regardless of size. However, large pulp and paper companies probably do not need further involvement by the government. They are usually able to handle transfers of technology from within, but they may need some incentives in the form, for instance, of tax holidays or special depreciation allowances.
Smaller pulp and paper companies, by contrast, especially if there are only a few in the country, would probably need assistance in complying with the government's environmental-management regulations. In that case the role of the government would include at least two additional activities: advising on how to implement the environmental-management programme and assisting with technical and financial means in the transfer of the required technology. Both these activities can be carried out by bodies expressly created by the government, either through their own experts or, if experts are lacking, through bilateral or international aid organizations.
The role of the government becomes even broader if the transfer of technology includes the manufacture of equipment, which could involve licensing by a foreign partner who may also invest some funds in the local company. Many developing countries have become aware of this - India is among the first - and have established legislation for the transfer of technology. The basic principle of this legislation is that it provides a framework for the gradual transfer of know-how to the domestic industry and regulates investment and profit activities of the foreign partner. However, legislation in developing countries in this matter is by no means uniform, since the general technical and development conditions also vary extensively.
The role of international organizations. What, then, is the role of international organizations in this transfer of technology? General advice on the establishment of standards for environmental management, and assistance in selecting technologies appropriate for the local conditions are two obvious aspects. At an individual project level, assistance may be required from the UN family of organizations in the form of expertise. However, perhaps the most important task of the international organizations in this area is to act as an adviser.
Sometimes the provider of technology transfer may want to introduce over-sophisticated technology. Beautiful photographs of the plant are then shown throughout the world as proof of a particular consultant's competence and experience. The recipient, on the other hand, is interested in minimizing the costs of the project. By acting as an adviser at an early stage of the project, the UN organizations can prevent the introduction of either over-ambitious or inadequate technologies.
GARTNER P. (Ed.). 1977 Technology and manpower, FAO Forestry Paper 4, Vol. 1, p. 235-259.
MOLLEDA. J. 1981 Achieving operating efficiency: meeting marketing needs and control of general costs. Paper presented at the twenty-second session of the FAO Advisory Committee of Experts on Pulp and Paper, Rome.
SILA-ON, A. 1978 The transfer of technology. Unasylva. 30 (122): 2-6
UNCTAD. 1980 Legislation and regulations on technology transfer: empirical analysis of their effects in selected countries. The implementation of transfer of technology regulations: a preliminary analysis of the experience of Latin America, India and the Philippines. Document TD/B/C. 6/55 of the Trade Development Board, Committee on Transfer of Technology, third session. Geneva.
UNIDO. 1973 Guidelines for the acquisition of foreign technology in developing countries. New York, United Nations.
UNIDO. 1973 Manual on the use of consultants in developing countries. New York, United Nations.
