Essay: Technological efficiency

At present in this competitive world country’s productivity difference mostly depends on its technological efficiency. The country has more technological innovation getting more productivity advantages. Technological power is dominated by only few innovative countries, for example in the communication technology industry United State of America is dominating over other countries, in automobile industry Germany is dominating. OECD countries conducted 96% of total world R&D expenditures in the year of 1990 (Coe, Helpman, and Hoffmaister, 1997). Even though few innovative countries dominating over new innovation and new technology, there is a positive convergence among innovative countries and less innovative countries. The most significance reason behind this positive convergence is technological spillover and this technological spillover leads to diffusion of technology from innovator to imitator.
Technological diffusion; Technology Diffusion is a process by which new innovation is transferred through certain channels among the members of a social system (Rogers, 2003). Innovation spillover or diffusion is the process of communicating new ideas with one or several parties. International technology diffusion is one of most important source of growth. If we consider the impact of international technology diffusion the global technological diffusion is very important in the sense that it helps to diminish the gap between less developed and developed countries. The GSM technology was first announced in 1987 and if it was not diffused over the world today’s communication world would not be possible. International technological diffusion helps to proper distribution of world income. From the definition it is clear that by the diffusion process new technological innovation spread among regions or among countries trough some specific channels. But how this diffusion take place or by which channels technology diffused?
There are two main channels through which technology transfer from one country to another country. The first major channel is ‘international trade’ when two countries engage in trade importer country will be more benefited if the exporter country is technologically advanced and second major channel is foreign direct investment(FDI) . Diffusion of Innovation or transfer of innovation is importance factor for proper economic growth. But the rate of technology diffusion is not the same for all country or all regions. It is depends on number of factors. First, the investor who invests on R&D is not interest to transfer his innovation free of cost. Second, although new technology is available it is not possible to use for patent systems. Third, even though there is no rival and technology could be transfer free of cost some substantial amount of investment is needed to adopt the technology.
In this seminar paper I will try to give an overview about the major channels through which innovation transfer or diffused. After that I will explain some measures of diffusion to understand the trend of technology diffusion. Researchers find major difference between within country and cross country rate of diffusion. I will also try to explain the basic reason for this difference. And next sections I will give explanation about the objective and impact of Eco Patent Common. At the last section I will connect these sections and try to give some suggestion