Globalization is one of the most important phenomena of our times. Everything—be it economic, social, or cultural—is affected by it. Multinational enterprises (MNEs) have to operate their businesses across national borders in this globalizing world. Particularly, they have to manage the international transfer of technology and knowledge, because their competitive advantages tend to rest on these. However, managing this international transfer is a difficult task, because technology and knowledge are sometimes implicit and can be incomprehensible for those who don’t share the same background. This book, edited by Pierre-Yves Donzé and Shigehiro Nishimura, demonstrates “how technology has been transferred through complex processes, involving a variety of actors from several countries” (1). It presents us with important factors or viewpoints from which to understand the international transfer of technology, and good examples of how it has been managed. In other words, it considers the history of globalization and global competitions from the viewpoint of international technology management.
Many historians of business have explored the history of globalization by focusing on the activities of MNEs, and especially on the flow of foreign direct investment (FDI) (e.g., Jones 2005). Globalization, however, is not only based on capital flow; in business, other resources besides capital are equally important. In order to launch a new business abroad, MNEs need technology and knowledge adapted to local markets. Usually, these intangible resources are transferred from a parent company to local subsidiaries and modified in local markets to achieve competitive advantage. So we have to understand how to manage the flow of such resources between countries, and to establish and develop them in new places. The focus of this book on the processes and historical facts of international technology transfer and management distinguishes it from many others studying MNEs in a globalizing world.
The book consists of an introduction, twelve substantive chapters, and an afterword. In order to develop a good understanding of the topic, every chapter uses a detailed case study, focusing on several MNEs and countries from interesting perspectives.
In its introduction, the editors set out the book’s vantage points. In reviewing the idea of technology transfer in relation to MNEs, FDI, and historical research, they point out that the flows, methods, and actors of technology transfer can vary considerably. Flow is not only from developed countries to developing countries or from parent company to local subsidiary; reverse flows have also been observed. Interactions regarding technology between countries or between parent company and subsidiary are critical for developing new business across borders. The authors also argue for the importance of institutions: “Since the late 19th century, the spread of global norms and institutions has provided a new framework in which technology transfer occurs. . . . These institutions helped unify the diverse national economies in a global system and then facilitated exchanges” (7–8). They pick up on the international patent system as an example of such an institution. Finally, they stress the importance of paying attention to the actors—not only MNEs but also international cartels, governments, public bodies, and individuals.
The twelve chapters are relegated among four parts, which correspond to some of the points highlighted in the introduction. Part 1 deals with the international patent system. Looking at Germany (chapter 1), Spain (chapter 2) and Japan (chapter 3) from the nineteenth to the first half of the twentieth century, it clarifies the process and effectiveness of the use of the patent system by MNEs. The authors discuss the importance of technological upgrading in these countries by using patents from foreign MNEs. For example, in chapter 3, Shigehiro Nishimura “details how GE transferred its corporate patent management to its two affiliates in Japan” (16). This particular case shows how GE developed the patent management capability of its Japanese affiliated companies, and how the Japanese companies then successfully upgraded their technological capabilities and developed competitive advantages.
Part 2 analyzes the role of cartels, with the histories of the rayon (chapter 4), aluminium (chapter 5), and watch cartels (chapter 6) being analyzed. “Together with the share of markets, the adoption of production quotas and sales prices, technology exchanges were a key issue within international cartels between the end of 19th century and World War II” (81). In chapter 4, for example, Valerio Cerretano describes the diffusion and exchange of rayon technology within the European rayon-cartel network. These cartels helped all their members to acquire new or advanced information and technologies. The aims of this part are to explore “the ways cartels controlled international technology transfer” and to consider “how and to what extent cartels helped to shape the global world in relation to MNEs” (81).
Part 3 explores the learning processes and interactions between organizations, especially between local domestic firms and those foreign firms with more advanced technologies. Its three chapters take up different periods and countries, analyze the technological transfer process by focusing on the level of the individual firm, and discuss the means and aims of this phenomenon. In chapter 7 María Inés Barbero clarifies the development processes of Argentinian firms through the transfer of foreign technologies from 1900 to 1930. The author also emphasizes the role of immigrants in Argentina’s early industrialization—especially of entrepreneurs and engineers—who introduced and developed new technologies. In chapter 8, Pierre Lamard deals with the postwar learning processes of the French company Alsthom, which acquired new programs for engineering and management from GE. The author depicts the process of Americanization of this French company’s management from the viewpoint of several technological flows. In chapter 9, Zejian Li describes the development processes of Chinese domestic automobile enterprises from the 1990s to the 2000s. The author emphasizes that these Chinese makers “acquired technologies from MNEs indirectly by, for example, hiring both foreign and Chinese engineers trained by major global automobile companies as experts or sourcing parts from subcontractors that also worked for the MNEs” (144).
Part 4, which focuses on postwar Japan, shows the role of individuals such as scientists and engineers in transferring and establishing new technologies from foreign countries, pointing out the importance of persons as intermediaries filling the technological gap. It focuses especially on the role of engineers and scientists. In chapter 11, for instance, Julia Yongue clarifies the introduction of penicillin-production technology from the United States to Japan, focusing on three important actors—government, entrepreneurs, and scientists. Scientists “worked assiduously with manufacturers in order to help them to engage in the mass production of penicillin as quickly as possible. Cooperation between scientists from different disciplines, information sharing and direct assistance to corporate researchers were essential factors in the postwar recovery of the pharmaceutical industry” (226). In the penicillin case, one important scientist forged a link between his university laboratories and pharmaceutical enterprises and thus provided the latter with new knowledge and technology.
This part of the book also describes the role of governments in helping domestic companies by collecting or acquiring new technological information. For example, in chapter 10 Yuki Nakajima tells us that “the state and public institutions played pivotal roles in integrating such knowledge and technologies into the national systems of innovation and thus helping domestic companies acquire such knowledge” (195), with a central focus on Japan’s PB reports.
Every part of this book sets out the detailed processes of technology transfer from different viewpoints. However, it does not adequately cover the role and management of expatriates whose role is that of a linkage between parent company and foreign affiliate. In international business management research, the role and effectiveness of expatriates to control or develop affiliated companies, the training and selection of expatriates within MNEs, the rearrangement of their working places, and the succession from expatriate to successor are all important issues. If possible, we would have liked this book to clarify the processes and history of the management of expatriates in greater detail.
In the afterword, Takafumi Kurosawa discusses “a possible way to extend these implications from the perspective of industrial history and competitiveness analysis by addressing the historical approach, technology history, industrial history, competitiveness, and the ‘region’ as a potential scope of research” (245). This scope is interesting and may be useful in understanding the ‘real’ competitiveness of enterprises or industries. The author writes that “with nation states exerting weaker control and globalization continuing to spread, regions are more directly in competition around locating economic activities. Even in the case of multinational companies, it is possible to discuss the competitiveness of the ‘organization’ in conjunction with a specific region” (247). As a concrete example, the automobile industry in Thailand has built and uses several networks such as supply chains within ASEAN (Association of South-East Asian Nations) countries. These regional networks and the technological assistance within these nation-states constitute the competitiveness of the Thai automobile industry. So, we first have to investigate the flows of technology and the history of the interactions among several different actors, including governments, enterprises, and individuals at the “regional” unit level—Europe, North America, East or South East Asia, and so forth—before researching the history of globalization.
Through its detailed case studies, this book helps us to comprehend the international transfer and management of technology in depth, and how enterprises have built their international competitiveness or how their international competition has arisen. It provides us with a deeper understanding of the nature of globalization and is a helpful reference not only for historians of business but also for researchers and businesspersons who are interested in globalization or international technology management.