Volume 6, Spring Issue, 1993 BOOK NOTE TECHNOLOGY TRANSFER IN INTERNATIONAL BUSINESS Ed. by Tamir Agmon' and Mary Ann Von Glinow. 2 New York, New York: Oxford University Press. 1991. Pp. 304. $34.95 (hard). In recent years the emergence of the newly industrialized countries ("NICs') of Southeast Asia as well as the expanding economic reach of Japan have altered significantly the terrain of international business. Because of the increased competition from both the NICs and Japan, U.S. companies have been forced to re-evaluate their marketing strategies and to devise new business alliances in order to compete internationally. For the most part, these new strategies and alliances have involved the transfer of technology into foreign markets in which the U.S. companies are competing? Technology transfer, thus, has become an important part of international business transactions. Indeed, Technology Transfer and International Business suggests that international business in this era is about technology transfer. This theme is advanced by the different contributors to the book, each of whom focuses on a particular industry or aspect of international technology transfer. The book is divided into three parts. Part One explains the reasons for the recent increase in technology transfer in international business. In particular, foreign competition, together with increasing trade restric- tions, have forced U.S. firms to manufacture their products in the foreign markets in which they seek to compete (pp. 8-14). Because these markets have increasingly included lesser developed countries ("LDCs") whose technological infrastructure is under-developed, technology transfer has become more necessary to bridge the gap (p. 91). Moreover, because these LDCs also allow other firms, namely those from Japan and the NICs, to compete in their markets, the U.S. firms, as well as their I. Professor of Finance and Business Economics, School of Business, University of Southern California. 2. Professor of Organization Management, School of Business, University of Southern California. 3. See DENIS GOULEr, THE UNCERTAIN PROMISE: VALUE CONFLICTS IN TECHNOLOGY "I~ANSFER 7 (1989).430 Harvard Journal of Law & Technology [Vol. 6 foreign competitors, are forced to transfer their domestic technologies to their foreign operations in order to help them remain competitive. A second reason for the increase in technology transfer is that the pressures of international business force both U.S. and foreign companies to manufacture their products in locations offering the greatest competi- tive advantages, which in many instances are beyond domestic boundaries (pp. 70-74). For this reason, U.S. and Japanese firms have established subsidiaries and joint ventures in countries such as India, Brazil, Malaysia, and China to manufacture goods for global export. 4 Establish- ing such operations necessarily requires technologies to flow across countries. Part Two examines the macro-organizational channels through which technology transfer is effected. As U.S. firms have become increasingly innovative and less risk-averse in their managerial strategies, there has been a trend towards international inter-firm cooperation (p. 121) One example that is discussed is the strategic alliances formed between firms of different nationalities engaged in the production of similar or even wholly diverse goods. In this type of "competitive collaboration ~ each company's participation spreads the costs and risks both of developing new technologies and of combining existing technologies to develop new products (pp. 123-25). These strategic alliances emphasize technology transfer, often in response to the severe competition present in today's global market. 5 Moreover, both Parts One and Two discuss U.S. policy regarding technology transfer. In particular, U.S. policies have been restrictive with respect to allowing domestic companies to transfer their technology abroad (pp. 48-53). The general view of the book is that such restrictive policies are likely harm U.S. competitiveness. This is because such restrictive policies limit the ability of U.S. companies to compete against their foreign competitors, which are allowed to utilize more completely their domestic technologies in their foreign operations. Indeed, the editors suggest that government attempts to block technology transfer might not have any real effect, except of raising the costs of acquisition, because alternative technologies likely would be purchased from other foreign suppliers. 4. See Brian O' Reilly, Your New Global Work Force, FORTUNE, Dec. t4, 1992, at 52. 5. See Howard V. Perlmutter & David A. Heenan, Thinking Ahead: Cooperate To Compete Globally, HARV. BUS. REV., Mar.-Apr. 1986, at 136 (describing importance of cooperative alliances in international business).Spring, 1993] Technology Transfer 431 Different perspectives on technology and what constitutes its transfer have polarized the discourse on technology transfer for decades. The phrase "technology transfer" itself was coined by economists who, in seeking ways to bridge the gap in levels of development between the developed and under-developed countries, prescribed the acquisition by the latter of technology developed in the former. 6 Nevertheless, the term "technology transfer" has now come to embrace far more than that. "Technology" itself may be embodied in manufacturing processes and managerial know-how, and is not embodied in products only (p. 7). This broader definition recognizes the central role of education in technology transfer. A nation's or firm's ability to receive technology is dependent on its level of basic knowledge, which then determines its ability to put the technology to use and to develop new uses. The role of education in the process of technology transfer is particularly relevant for developing countries, since their pre-transfer knowledge base is usually insufficient for receiving and utilizing effectively the transferred technology (pp. 79- 88). Part Three of the book examines the practice of international technology transfer in the Pacific Rim. Seven independent studies examine the institutional and social environments in which technology transfer occurs in this region. Firm specific