Challenges in the Era of Globalization - iaabd

Challenges in the Era of Globalization
Edited by Emmanuel Obuah
New perspectives on Foreign Direct Investment and Technology transfer in Africa: Insights
from the construction industry in Ghana
Ellis L.C. Osabutey: e.osabutey@mdx.ac.uk
Middlesex University, The Business School, The Burroughs, Hendon, London, UK.
Y. Debrah: y.a.debrah@swansea.ac.uk
University of Wales, Swansea, School of Business and Economics, Singleton Park, Swansea, UK.
Abstract
Foreign Direct Investment (FDI) is a conduit for transferring technology and knowledge to developing countries
because less developed countries lack requisite technology for sustainable development. Much of the FDI literature
on Sub-Saharan Africa (SSA) focuses on the attraction of FDI with an almost total neglect of technology transfer.
Semi-structured interviews of selected professionals and practitioners within the construction industry in Ghana via
qualitative analysis explore the technology transfer and knowledge transfer concepts within an African context. The
study reveals that technology transfer and knowledge transfer should go together and suggests that knowledge
transfer should precede technology transfer. The paper therefore views Technology and Knowledge (T&K) transfer
as a single integrated concept. The absence of good educational infrastructure for construction professionals can be
blamed for the poor knowledge base. In Ghana, the knowledge base among consultants can be argued as being
adequate but because of poor knowledge base among the majority of local contractors T&K transfer was ineffective.
Technological needs should be identified at the design stage of construction projects to ensure that requisite
knowledge base exists to utilise these technologies. To benefit more from FDIs developing countries should
concentrate on preparing the requisite knowledge base to increase absorptive capacity.
Introduction
Foreign Direct Investment (FDI) inflow can have far-reaching effects on processes of economic
development in a host country. FDI is a conduit for transferring advanced technology and knowledge to
host countries (Lim, 2001).The ability to adopt and adapt to changing world conditions have become the
basis of competitiveness, growth and development for nations and organisations. In Pack and Saggi’s
(1997) view less-developed countries lag behind the technology frontier. Sub-Saharan Africa (SSA) lag
behind the technology frontier (Lall and Pietrobelli, 2002; UNCTAD, 2003) and must rely on foreign
technology inflows for development. Much of the FDI literature on SSA has focused on attraction and
neglected other benefits such as technology transfer. There is paucity of research on technology and
knowledge (T&K) management and transfer in SSA. This paper seeks to appraise the T&K management
and transfer debate on SSA and uses evidence from the construction industry in Ghana. Essentially the
paper explores the technology transfer and knowledge transfer concepts and places them in an African
context. It attempts to examine how knowledge transfer and technology transfer processes occur in the
construction industry in Ghana. Specifically, it attempts to explore the question below:
• Can technology transfer take place without knowledge transfer to developing countries?
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