Technology transfers and their effect on human capital · Technology transfers and their effect on...

Lampert Fellowships in Public Affairs

Technology transfers and their effect on human capital Ameetosri Basu Colgate Class of 2014 Sponsored By:

Navine Murshid Assistant Professor Department of Political Science

Technology transfers and their effect on human capital

2

I. INTRODUCTION ................................................................................... 3

a) Human capital and developing countries ............................................................ 3

b) Technology transfer ............................................................................................. 4

II. LITERATURE REVIEW ........................................................................... 6

III. WHY ARE TECHNOLOGICAL TRANSFERS IMPORTANT TO THE

DEVELOPMENT OF HUMAN CAPITAL? ....................................................... 9

IV. QUALITATIVE SURVEY AND ANALYSIS ................................................ 13

a) General description of the sample population interviewed ............................. 13

b) Description of the joint ventures ....................................................................... 13

c) Nature of the training imparted ........................................................................ 14

d) Survey method ................................................................................................... 14

e) Analysis of the presented questionnaire and its results ................................... 15

(1) Leadership skills .................................................................................................................... 15

(2) Entrepreneurship skills .......................................................................................................... 17 (a) Supervisor assessment ...................................................................................................................... 17 (b) Creation of new enterprises .............................................................................................................. 20

(3) Technical skills and knowledge .............................................................................................. 20 (a) New machinery .................................................................................................................................. 20 (b) New software .................................................................................................................................... 22

(4) Changes to company organisation ........................................................................................ 23 (a) Company culture ............................................................................................................................... 23 (b) Hiring policy ....................................................................................................................................... 25 (c) Greater investment and emphasis on public relations ...................................................................... 25

V. DISCUSSION OF RESULTS ................................................................... 26

a) Administration of the survey ............................................................................. 26

b) Relationship between employees and firms ..................................................... 26

VI. CONCLUSION ..................................................................................... 28

VII. WORKS CITED .................................................................................... 30

VIII. APPENDIX ................................................................................... 33


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I. Introduction

How effective are technology transfers in the form of collaborations with foreign firms

in facilitating human capital development? The study analyses the apparent success of

technology transfers (in the form of skill transfers) in stimulating the growth of human

capital by looking at the changes occurring in worker productivity and firm culture of

textile firms that have recently formed joint ventures with foreign companies. The

findings of this research present the “true potential” of technology transfers from a

human capital perspective.

a) Human capital and developing countries

In the context of labour economics, human capital can be thought of as the set of

marketable skills of workers in which a variety of investments are made, such as training

and education. It “corresponds to any stock of knowledge or characteristics the worker

has (either innate or acquired) that contributes to his or her productivity.” (Acemoglu

and Autor, 2011). Developing countries such as India are usually dominated by labour-

surplus conditions, and this excess labour is an important resource that can be

developed into human capital.

Like all forms of capital, human capital needs investment for development. According to

the Romer model of endogenous growth, economic growth arises from investment in

human capital.1 This investment mainly takes the form of health and education.

However, developing nations face resource constraints that restrict them from making

1 Romer, Paul M., Human Capital and Growth: Theory and Evidence (November 1989). NBER Working

Paper No. w3173.


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adequate investment in these sectors, and as such, the potential of this human resource

remains mostly untapped and undeveloped. Thus technology transfer from

industrialised countries may be a way to import skills and knowledge from developed

nations to developing ones and accumulate human capital.

b) Technology transfer

In the field of growth economics, both standard neoclassical growth theory and recent

endogenous growth theory attribute the income difference between developing and

developed countries as being partly due to differences in technology between rich and

poor countries. Neoclassical theory (the Solow-Swan model)2 considers technology not

only generally available but also universally applicable: therefore technological

differences are explained as gaps in the endowments of objects, such as factories,

roads, machinery et cetera. In contrast, endogenous growth theory3 postulates that

gaps in the endowment of ideas and the limited capacity of developing countries to

absorb new knowledge are the main reasons for the income gap. It also implies that the

interaction between technology and skills with a view to reducing the idea gap is the

most effective method for growth.

How is this interaction between technology and skills put into effect? One method is

technology transfer. Technology transfer is defined as the process of sharing of skills,

knowledge, technologies, and methods of manufacturing from a developed country to a

2 Solow, Robert M. (1956). "A Contribution to the Theory of Economic Growth". Quarterly Journal of

Economics (The MIT Press) 70 (1): 65–94. 3 Romer, P. M. (1994). "The Origins of Endogenous Growth". The Journal of Economic Perspectives (The

American Economic Association) 8 (1): 3-22.


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developing one4. Through technology transfer, ideas and skills could be shared between

countries, thus increasing the stock of ideas in the receiving country and reducing the

idea gap. This paper performs a qualitative assessment of the effectiveness of

technology transfer in increasing the skill level of textile industry workers in India.

4 Allen, Thomas J. (1984)."Managing the Flow of Technology: Technology Transfer and the Dissemination

of Technological Information Within the R&D Organization," MIT Press Books,The MIT Press.


6

II. Literature review

The existing literature on the impact of technology transfers in developing countries

concentrates mainly on large-scale indicators such as employment, income distribution,

economic growth and development. Berman and Machin (2000) study the impact of

technology transfers on the composition of labour markets, while Djankov and

Hoekman (1998) study its impact on TFP (Total Factor Productivity5) growth. Hu,

Jefferson and Jinchang (2003) concentrate on how technology transfers are

complemented by intra-firm research and development. Gemmell and Kneller (2002)

analyse the post-war growth experience of developing countries as affected by shocks in

the form of technology transfers. The most comprehensive analysis directly linking

technology transfer to skill development is by Miyamoto (2003), but it concentrates on

imports of technology and the accompanying training spillovers rather than direct skill

sharing.

An important point that the literature concentrates on is the relationship between joint

ventures and knowledge spillovers. Clarke-Hill and Robinson (1998) compare

international joint ventures and buying alliances and find that joint ventures are

characterised by a greater level of knowledge-sharing. In contrast, Smarzynska (2000)

suggests that although developing countries tend to favour joint ventures over other

forms of foreign investment, joint ventures in industrial sectors with a high degree of

investment in research and development may present less potential for technology

5 Total Factor Productivity (TFP) is the portion of output not explained by the amount of inputs used in

production. As such, its level is determined by how efficiently and intensely the inputs are utilized in production.


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transfer than wholly-owned subsidiaries. However, in a later paper, Smarzynska (2004)

finds that there are positive knowledge spillovers associated with projects with shared

domestic and foreign ownership but not with fully owned foreign investments.

A contrary viewpoint is offered by research from Haddad and Harrison (1993). Using

data on the Moroccan manufacturing sector, they find no evidence that foreign

presence accelerates productivity growth in domestic firms. Similarly, Görg and

Greenway (2004) find that empirical support for positive knowledge spillovers is at best

mixed.

The literature clearly shows that foreign investment has a significant positive effect on

knowledge spillovers. Branstetter (2006) suggests that foreign direct investment

increases the flow of knowledge both to and from the investing firm of country, which

provides firms in developed countries with the incentive to invest in developing nations.

As for the relationship between intellectual capital and knowledge spillovers from

foreign trade or investment, Grossman and Helpman (1991) show that policies that

restrict foreign trade or investment have an adverse effect on innovation. Engelbrecht

(2010) confirms that human capital has a positive role in the absorption of international

knowledge spillovers.

Mottaleb and Sonobe (2011) take a more country-specific approach in their in-depth

analysis of the rapid growth of the Bangladeshi garment industry. They explore the

process of continuous learning started by the initial infusion of knowledge by the

technology transfer from South Korea in the 1970s, and provide evidence (at least for a

particular industry) that technology transfer leads to rapid and continuous growth and


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development. However, a review of the academic literature reveals that it is mostly

silent on the impact that technology transfer has on long-term human capital

development: the issue this project attempts to analyse.


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III. Why are technological transfers important to the development

of human capital?

In general, firms in developing countries do not invest enough in training of employees

(Batra and Tan, 2002). This, coupled with the fact that this training is relatively

unequally distributed among employees may be a hindrance to progress, especially

when developing countries are trying to catch up with the skill level of the developed

economies. Enterprise training is one of the most important sources of skills acquisition;

studies have shown that enterprise training raises labour productivity substantially,

especially in small to medium sized firms (World Bank, 2007).

Why do firms under-invest in training? There are varying reasons specific to each

industry and economic environment, but the most common are (Batra, 2003):

training is not affordable because of limited resources;

training is costly because of high labour turnover;

the firm lacks knowledge about training techniques and organisation;

the firm used a mature technology, so learning-by-doing is sufficient6;

informal training is thought to be adequate;

skilled workers are readily hired from other firms; and

the firm is sceptical about the benefits of training.

6 For firms already using mature technologies, there is little scope for improvement of pre-existing

techniques; therefore, workers can become more proficient by learning by doing or through informal training (Batra, 2003).


10

The problem of limited resources is the most widespread one, according to the World

Business Enterprise Survey. This is most often likely to be the case due to the credit

constraints faced by many enterprises in developing countries. While the numbers of

training grants and subsidy schemes available in developing countries are increasing

with time and awareness, not all firms or industries are eligible for training subsidies

and credit availability may thus be very limited. Small and medium-sized enterprises

(SMEs) are more likely to face this type of training constraints, because they are the

ones who are less likely to have access to the credit market.

However, the existing literature shows that multinational corporations train more than

domestic firms (Miyamoto and Todo, 2003). The reasons for this are:

Multi-national corporations (MNCs) are less likely to face credit constraints since

they usually have wide access to foreign capital.

MNCs are more likely to gain information on techniques and organisation of

training since their range of information is global.

They can also reduce the probability of labour turnovers7 by providing attractive

compensation packages to keep the employees after the training provision.

The comparison indicates that collaboration with a multinational foreign firm may be a

way for domestic firms to invest in training and development of human capital. Training

development activities conducted by the foreign firm are important since they bring in

7 Labour turnover is the ratio of the number of employees that leave a company through attrition,

dismissal, or resignation during a period to the number of employees on payroll during the same period.


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advanced skills and technologies to which domestic firms otherwise have no access. One

important channel through which this technology may transfer from the foreign firm to

the domestic firm is the training spillover. Training spillovers may occur through four

routes:

Vertical linkages: Vertical linkages happen when the foreign firms train or

provide technical support to domestic firms that supply them with intermediate

goods (backward linkages), or to buyers of their own products (forward

linkages).

Horizontal linkages: Horizontal linkages occur when domestic firms in the same

industry gain skills through industry or region-wide skills development

institutions that are supported by foreign firms.

Labour turnovers: Labour turnover occurs when workers trained by foreign firms

or managers transfer their knowledge to other firms when switching employers.

Labour spin-offs: Labour spin-offs happen when an employee of a foreign firm

starts up a new firm based on the know-how gained from previous experience.

In this particular study, horizontal linkages are the primary area of focus, specifically in

the form of joint ventures. A joint venture is a business arrangement in which parties

agree to develop, for a finite time, a new entity and new assets by contributing equity.

They exercise control over the enterprise and consequently share revenues, expenses

and assets. The horizontal linkage formed by a joint venture between a firm from an

industrialised economy and a company in a developing country can lead to technology


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transfer in the form of sharing of concrete assets as well as impartment of skills. The skill

sharing in particular could have a positive impact on the development of human capital

because of skill accumulation.

This paper utilises a qualitative survey of three Indian textile firms with a history of

recent foreign collaboration to investigate the claim that collaboration with a

multinational foreign firm may be a way for domestic firms to invest in training and

development of human capital. I personally conducted the survey (with the help of firm

employees) in two of the firms. In the third, I used data that the firm had collected by an

internal survey and conducted an additional survey. The total number of employees in

the firms surveyed was 110, distributed across several departments and functions.

Additional information was obtained by individual interviews of people employed in an

administrative capacity within the firm.


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IV. Qualitative survey and analysis

a) General description of the sample population interviewed

Although stratified sampling was attempted in the survey population, it was not feasible

since only certain departments received training after the foreign collaboration or joint

venture. Employees surveyed were generally production managers, human resources

employees and machine operators working at three different Indian textile firms,

referred to as Firm 1, Firm 2 and Firm 3 to ensure anonymity. Apart from machine

operators, who had generally completed high school and received vocational training,

the highest level of education earned by the participants of the survey was generally a

Master of Business Administration (MBA) or a Bachelor of Technology (B. Tech).8 The

gender composition of the surveyed population was 74% male and 26% female.

b) Description of the joint ventures

Firm 1 is a 50:50 joint venture of a major Indian textile company and an Italian

textile manufacturing firm. Firm 1 is currently the one of the largest

manufacturer and exporter of bathrobes in India. The plants surveyed were

located in Vapi, Gujarat and Anjar, Gujarat.

Firm 2 is a 50:50 joint venture of an Indian garments firm with another Italian

textile company. It produces cotton shirting and bottom weight fabrics. The

plant surveyed was located in Kolhapur, Maharashtra.

8 A number of studies have addressed the issue of whether educated employees are more likely to receive

enterprise training. Since productivity gains of training activities among educated workers are expected to be higher, firms with a higher proportion of educated workforce are more likely to provide training.


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Firm 3 is a 50:50 joint venture between a Coimbatore-based textile

manufacturer and an American garments firm. It produces intimate wear and is

mostly export-oriented. The plant surveyed was located in Ozahiyur, Tamil Nadu.

c) Nature of the training imparted

Training as a result of the foreign collaboration was focused on two specific directions:

increasing managerial effectiveness and improving worker productivity. Managerial

training was imparted to human resources employees and production managers while

machine operators were given basic training to improve productivity. The two pathways

affected the human capital to different extents, as will be shown in the results of the

survey.

d) Survey method

The questionnaire used is included in the appendix. The response options were

originally five: strongly agree, agree, neutral, disagree and strongly disagree. However,

in the case of one firm, information was collected from a survey conducted immediately

after the training by the human resources department of the company itself. This survey

did not include ‘neutral’ as a response option. Therefore, in order to preserve

uniformity, the ‘neutral’ response option was omitted while administering the rest of

the surveys which were conducted later.


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e) Analysis of the presented questionnaire and its results

(1) Leadership skills

Leadership skill training was imparted to production managers specifically and human

resources employees in some cases. Further interviews clarified that human resources

employees were present during the training in an observer capacity so that the training

could be replicated at a later time. A modified Kirkpatrick model9 was used to analyse

the effectiveness of the training, with inputs from both trainees and training supervisor.

Survey results:

Trainee response:

Question Strongly

agree

(%)

Agree

(%)

Disagree

(%)

Strongly

disagree

(%)

The training met my expectations. 61 30 8 1

I will be able to apply the knowledge

learned.

59 28 10 3

The training objectives for each topic

were identified and followed.

72 23 3 2

The content was organized and easy to 75 18 2 5

9 Donald Kirkpatrick’s Four-Level Evaluation Model is a process commonly used by organizations and

businesses to evaluate learning processes. See Reid Bates, “A critical analysis of evaluation practice: the Kirkpatrick model and the principle of beneficence”, Evaluation and Program Planning, Volume 27, Issue 3, August 2004, Pages 341-347.


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follow.

The materials distributed were

pertinent and useful.

83 11 4 2

Table 1.1

Supervisor response:

Question Strongly agree

(%)

Agree

(%)

Disagree

(%)

Strongly

disagree

(%)

The trainees put their learning

into effect when back on the job.

62 24 9 5

The relevant skills and knowledge

were used.

64 21 13 2

There was noticeable and

measurable change in the activity

and performance of the trainees

when back in their roles.

77 13 6 4

The change in behaviour and new

level of knowledge was sustained.

80 15 3 2

The trainee would be able to 65 26 8 1


17

transfer their learning to another

person.

Table 1.2

The results of the survey show an overwhelmingly positive response to leadership skill

training. Leadership skills are transferable and underpin technical capability, as well as

the capacity to learn, adapt, think independently and cope with technical

advancements. Leadership capability is also linked to empowerment within the

organisation, which is discussed separately. According to Edvinsson10, leadership skills

play a key role in the development of human capital; therefore the training was

effective for the purposes of this study.

(2) Entrepreneurship skills

According to Jones and Jayawarna11, human capital is a powerful predictor of a person’s

propensity to establish a new venture. Conversely, entrepreneurship skills can be taken

as an indicator of human capital development. To measure this, a two-way approach

was conducted, as described below.

(a) Supervisor assessment

Supervisors were asked to assess the employees directly under them, comparing skill

level before and after the foreign collaboration. This assessment may be taken as a

general indicator of the change in entrepreneurial skill level. However, it is merely a

10 Leif Edvinsson, Developing intellectual capital at Skandia, Long Range Planning, Volume 30, Issue 3, June 1997, Pages 366-373, ISSN 0024-6301, 10.1016/S0024-6301(97)90248-X. 11

Jones O and Jayawarna D (2011) Entrepreneurial Potential: The Role of Human Capital. 34th Annual Conference. ISBE, Sheffield pp 1-18


18

conjecture that this change was affected by the collaboration; there is no evidence to

directly link one to the other, since no training was given that encompassed

entrepreneurial skills.

Survey results:


(%)

Agree

(%)

Disagree

(%)

Strongly

disagree

(%)

Employees demonstrated greater

management skills, such as

teamwork, relationship

development etc. after interaction

with foreign trainers.

42 55 2 1


communication skills after

interaction with foreign trainers.

24 44 30 2


knowledge of in-firm opportunities,

such as promotions and lateral

transfers after interaction with

foreign trainers.

35 39 23 3

Employees demonstrated greater 33 27 28 12


19

risk assessment skills after

interaction with foreign trainers.

Table 2.1

The questions asked present a general approximation of entrepreneurial skill within a

firm environment and therefore should not be taken as a positive indicator of change in

skill level. However, averaging the responses seems to indicate that around 75% of

supervisors thought that there had been a positive change in entrepreneurial skill level

after interaction with trainers from the foreign firm, which may be taken as an

indication that there was a positive development of human capital.

Average response to improvement in entrepreneurial skill after interaction


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(b) Creation of new enterprises

Another indicator of rise in entrepreneur skill is the actual creation of new enterprises.

An anecdote from William Easterly’s The Elusive Quest For Growth12 would serve to

illustrate the case. In 1979, Daewoo of Korea set up a joint venture with a Bangladeshi

textile firm (Desh Garments) and began to train 130 workers in modern technology and

administration. Within ten years, 115 out of the 130 Korean-trained workers had started

their own garment firms. Although interviews with human resources directors indicated

that a minimal number of former employees were now self-employed, this particular

project was not able to unearth conclusive evidence that training by foreign firms

produced new entrepreneurs.

(3) Technical skills and knowledge

(a) New machinery

In all the firms surveyed, the foreign collaboration resulted in the purchase of new

machinery and the hiring of new employees, as well as the training of old employees.

The major part of the technical training was received by machine operators and in some

cases, engineers. Production managers were asked to complete an assessment

regarding productivity and efficiency as a result of the technical training.

12 Easterly, William H., The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Boston: MIT, 2002. 146-49. Print.


21

Survey results:

Question Strongly

agree

(%)

Agree

(%)

Disagree

(%)

Strongly

disagree

(%)

The individual productivity of old

employees increased after training.

65 15 11 9

The overall productivity of the plant

increased after training.

81 13 5 1

The individual efficiency of old employees


69 9 15 7

The overall efficiency of the plant


84 12 4 0

The quality of manufactured products has

increased.

85 15 0 0

Table 3.1

The results indicate that the new machinery purchased and the associated technical

training significantly increased the perception of productivity and efficiency as well as

the quality of the garments produced. It is also interesting to note that that the amount

of positive responses was greater for overall efficiency and productivity than individual.


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Also, since technical skills and training are strongly industry-specific and not

transferable, it is debatable whether the training received by factory workers

contributed to their human capital potential.

(b) New software

The foreign collaboration also resulted in the introduction of new office software in

every case. In most cases, this took the form of installing the latest SAP13 modules in the

various departments, usually the SAP ECC 6.0. The SAP ECC 6.014 is an enterprise-wide

information system designed to coordinate all the resources, information, and activities

needed to complete business processes. The implementation of the software was

accompanied by training to properly use the software. This training, unlike the others

mentioned so far, was department-specific as each SAP module is tailored to fit the

processes of each department (for example, Materials Management and Production

Planning have different modules). Interviews with human resources managers clarified

that knowledge of SAP modules was not necessarily industry-specific although it was

department-specific, and could be counted as a transferable skill since certain

department are present in every industry. Therefore this technical knowledge can be

considered to encourage labour mobility and accumulation of human capital.15 To assess

the effectiveness of the new software, employees were asked whether they felt that the

new software was more efficient than the one they had previously been using.

13

Stands for Systems, Applications and Products in Data Processing. 14

Stands for Enterprise Core Component. It was earlier named the SAP R/3 module. 15

Eriksson, Göran. "Human Capital Investments and Labor Mobility." Journal of Labour Economics 9.3 (1993): 236-54. JSTOR. The University of Chicago Press. Web.


23

Survey results:

Module Strongly

agree

(%)

Agree

(%)

Disagree

(%)

Strongly

disagree

(%)

Financials and Controlling (FICO) 68 25 3 4

Human Resources (HR) 73 20 6 1

Materials Management (MM) 84 12 4 0

Sales and Distribution (SD) 76 23 1 0

Production and Planning (PP) 85 9 3 3

Plant Maintenance (PM) 65 29 5 1

T

Table 3.2

(4) Changes to company organisation

The foreign collaboration also resulted in several changes in company organisation.

These are documented in this section.

(a) Company culture

Company culture is the shared values and practices of the company's employees. In two

out of the three firms surveyed, employees reported that company culture had become

more democratic as opposed to a previously top-down hierarchy. Employees reported


24

that managers and supervisors were more accessible and showed enthusiasm towards

implementing ideas and projects suggested by juniors as compared to before the

collaboration took place. Several other changes occurred to the general culture of the

company, as documented by the survey below.

Survey results:


(%)

Agree

(%)

Disagree

(%)

Strongly

disagree

(%)

The adaptability of the organisation

(i.e. its capacity to adjust to a changed

environment as a result of the joint

venture) increased.

71 18 10 1

The organisation stepped up efforts to

learn and develop the competencies

of its personnel.

63 17 12 8

The organisation developed a more

teamwork oriented approach after

the joint venture.

66 21 13 0

The amount of trust in the company

culture increased after the joint

venture.

59 29 7 5


25

Table 4.1

(b) Hiring policy

Hiring policy change was difficult to document, since the firms did not allow questions

regarding equal opportunity hiring practices to be answered by employees. However, in

interviews, hiring personnel reported that policy had remained relatively unchanged

and equal opportunity practices had always been followed. Interviews also revealed that

new job titles and positions had been established to adjust to the changed work

environment as a result of the joint venture, although details were not forthcoming.

(c) Greater investment and emphasis on public relations

All three firms reported that the public relations department had been re-organised

drastically following the collaboration. Special emphasis was placed on customer

relations as well as media presence, and there were major increases in the number of

people hired in the department. The internet was given greater importance as a

medium of communication as well as advertisement.


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V. Discussion of results

Even though the survey results indicate a general positive trend in the impact that the

joint ventures had on the employees and culture of the firms, there may be a few biases

that are left unaccounted for by the nature of the study, which are discussed in this

section.

a) Administration of the survey

Although all surveys were administered anonymously, in the case of one firm, data was

obtained from an evaluation that had already been performed after the completion of

training. This may have affected the results through a reporting bias since the survey

was conducted by the firm itself and not by an impartial third party. This may have led

to a preponderance of positive responses which did not reflect the true impact of the

training.

b) Relationship between employees and firms

The relationship between employees and their employers could also affect the response

quality of the survey. Two of the firms were located in Gujarat, a state that does not

have a good history of labour unionisation and encouraging employer-employee

relations; this may have affected the study by either a preponderance of positive

opinions (in case a negative opinion expressed may result in dismissal) or negative

opinions (as a form of protest against the firm). However, the overwhelming majority of

positive opinions suggests the former. However, Tamil Nadu, where Firm 3 was located,

labour has a greater degree of unionisation and bargaining power. Tamil Nadu also


27

encourages initiatives to develop employer-employee relations, so the results obtained

from Firm 3 may be more credible.

Even though the presence of certain biases (as mentioned in this section) which pushed

the trend to a more positive one is possible, it is more likely that due to the low level of

investment in human capital by purely domestic firms, the training initiatives conducted

had a significant positive effect on the human resources of the firms. A more

generalised study, which subverts any influence that firms may have on survey results

could make a stronger case in favour of the positive impact of technology transfer on

human capital. One way this could be done is by personal interviews or surveys of

employees by an unbiased third party which would guarantee anonymity and not report

results to the respective firms. Also, a study that involves a greater number of firms with

more geographical spread may be able to indicate a more substantive trend.


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VI. Conclusion

Although it is presumptuous to conclude from a qualitative survey of only three firms

that technological transfer definitively leads to development of human capital, there are

indications that show that the collaborations with foreign firms had a positive impact on

the efficiency and productivity of employees. The survey results also show that both

supervisors and the employees themselves perceived the accompanying training as

increasing their skill level and ability.

There is also some evidence to show that the joint ventures led to increase in

organisational capital. The intellectual capital of a firm consists of human capital,

organisational capital and consumer capital, which complement each other and

together comprise the intangible assets of the firm. Organisational capital represents

procedures, technologies, management systems, technical and software support,

organisational structure and organisational culture. An encouraging and supportive

work environment and culture is necessary for the development of human capital, and a

change to a more democratic work climate (as documented in the survey) was

conducive to the realisation of the full innovative potential of the human resources

available to the firm in the form of labour.

The results of this study therefore imply that technology transfers are a good resource

for cultivating human capital in developing countries. The policy implications arising

therefore would be to pursue an open economy that encourages foreign investment in

industries and collaborations with domestic firms. In the era of globalisation, the idea


29

gap and well as the skill differential between the developing and the developed need to

decrease, and technology transfer seems a very attractive option to achieve this

minimisation.


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VIII. Appendix

Questionnaire given to ordinary employees:

(Response options: strongly agree, agree, disagree, and strongly disagree)

1. The training met my expectations.

2. I will be able to apply the knowledge learned.

3. The training objectives for each topic were identified and followed.


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4. The content was organized and easy to follow.

5. The materials distributed were pertinent and useful.

6. The new software implemented after the foreign collaboration is more effective

than the one previously used.

7. The adaptability of the organisation (i.e. its capacity to adjust to a changed

environment as a result of the joint venture) increased.

8. The organisation stepped up efforts to learn and develop the competencies of its

personnel.

9. The organisation developed a more teamwork oriented approach after the joint

venture.

10. The amount of trust in the company culture increased after the joint venture.

Questionnaire given to supervisors and managers:

(Response options: strongly agree, agree, disagree, and strongly disagree)

1. The trainees put their learning into effect when back on the job.

2. The relevant skills and knowledge were used.

3. There was noticeable and measurable change in the activity and performance of

the trainees when back in their roles.

4. The change in behaviour and new level of knowledge was sustained.


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5. The trainee would be able to transfer their learning to another person.

6. Employees demonstrated greater management skills, such as teamwork,

relationship development etc. after interaction with foreign trainers.

7. Employees demonstrated greater communication skills after interaction with

foreign trainers.

8. Employees demonstrated greater knowledge of in-firm opportunities, such as

promotions and lateral transfers after interaction with foreign trainers.

9. Employees demonstrated greater risk assessment skills after interaction with

foreign trainers.

10. The individual productivity of old employees increased after training.

11. The overall productivity of the plant increased after training.

12. The individual efficiency of old employees increased after training.

13. The overall efficiency of the plant increased after training.

14. The quality of manufactured products has increased after the foreign

collaboration.

15. The new software implemented after the foreign collaboration is more effective

than the one previously used.

16. The adaptability of the organisation (i.e. its capacity to adjust to a changed

environment as a result of the joint venture) increased.

17. The organisation stepped up efforts to learn and develop the competencies of its

personnel.


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18. The organisation developed a more teamwork oriented approach after the joint

venture.

19. The amount of trust in the company culture increased after the joint venture.

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