Summary

The technology transfer goals under consideration by the UN Open Working Group include general and technology-specific targets, as well as goals that are foundational to technology transfers that occur through trade and foreign direct investment. The ultimate goal of these targets is to promote sustainable economic development.

Pamela J. Smith reviews the technology transfer proposals of Keith E. Maskus and then offers a broader perspective on policy options.

Maskus proposes two policies that have the potential for increasing technology transfers to developing countries. The first is to increase the ratio of R&D spending as a percentage of GDP in developing countries. Maskus calculates benefitcost ratios for developing and emerging countries corresponding with a range of R&D spending scenarios. He concludes that the proposed policies do not qualify as “strong or phenomenal” priorities for the UN agenda. Smith agrees with this conclusion and that developing countries would benefit more from investing in policies that yield a higher benefit-cost ratio.

The second policy is to establish “innovation zones.” This would involve offering ten-year visas that permit free mobility of skilled labor among participants in the zones. Maskus calculates benefit-cost ratios for countries that are the source and destination of migrating skilled labor within a North–South zone and South–South zone. He concludes that the proposed policy qualifies as a “phenomenal” priority for the UN agenda. Smith agrees that the technology transfers that would occur within an innovation zone are economically significant, but adds the caveat that benefits and costs vary considerably across source and destination countries of the migrants.

In Smith's assessment, the Maskus analysis is conservative so as not to overestimate the effects of the policies. Smith also notes two intentional omissions. The first is the omission of international spillovers in the analysis of the R&D spending policy. The second is the omission of human capital spillovers in the analysis of innovation zones. Smith discusses the implications of these omissions, yet concludes that these omissions do not change the basic conclusion regarding the economic significance of the policies and their priority in the UN agenda.

Smith offers broader perspectives from the literature on policy options that support economic development through technology transfers.