The survey on technological licensing by SMEs of advanced
countries to Korea reveals many interesting facts. First, SMEs
have been an important source of foreign technology. In a wide
range of industries, transfer of technology by SME's have
allowed Korean firms to produce goods that have not been
produced domestically. SMEs also habe contributed to the
transfer of process technology.
Second, SMES's rely ,ore on TL as a channel of technology
transfer rather than DFI. This is part is causes by the
governmental policy of unpackaging. In Other words, the korean
government had been relatively restrictive to DFI while less
restrictive to TL. The other part of the reason may be traceable
to intrinsic characteristics of SME's. Through engaging
arms-length contracts, SME's do not have to bear risk involved
in capital transfer. In addition the remuneration from the
technology is more stable if arms-length contract is used.
Third, transfer of technology is a very complex process and
much different from trade in goods and services. The markets
for the technology is very imperfect and it takes considerable
time to find the partners and to transfer technology. Personal
contacts such as training, and technical consultancy is an
essential element in the successful transfer of technology.
Fourth, adoptation of imported technology is usually carried
out to meet the differences in demand, The modification of
technology to local production conditions such as the relative
prices of factors, does not seem to be part of adoptation,
Firth, S/SME's are not enclaved from domestic industries.
They have very strong forward and backward linkages with
domestic industries. They have also contributed to strengthening
the competitiveness of the domestic economy.
Efforts have been made to judge the comparative
performance of SME's and TNC's by utilizing previous surveys
on TL. The evidence, however, is not conclusive in most cases
due to the lack of the study on TNC's and licensing in general.
Further study is necessary to have an more concrete
It is very difficult, however, to repute the hypothesis that
SME's can be as efficient as TNC's in the transfer of
technology. On the other hand. SMEs are more likely to transfer
technology to SME's in the host country and are less likely to
increase the concentration of the domestic markets. Thus, there
is a good reason for the host government to prefer SMEs as a
source of technology.
The main obstacle of SME's-going -abroad lies in high
transaction cost associated with it. Markets for technology are
inefficient; thus, it is costly for SME's to collect of analyze
information. Equity participation or contractual arrangements take
time and usually is costly. Thus, is seems desirable to have the
government reduce these transaction costs for SME's and their