The Cost of Technical Knowledge
Countries at different levels of technical learning use the same technology at widely
varying levels of efficiency. The same steel mill costs three times as much to erect
in Nigeria as in South Korea, and, once it operates, is only half as productive (Lall
1993:95–108).
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Part Three. Factors of Growth
Choices among technologies, which continually change, are poorly defined. Technical knowledge, which is unevenly distributed internationally and intranationally, is
acquired only at a cost and is almost always incomplete, so that any person’s knowledge is smaller than the total in existence. Less-developed areas can almost never
acquire technical knowledge in its entirely, as blueprints, instructions, and technical
assistance fail to include technology’s implicit steps.4 Learning and acquiring technology does not result automatically from buying, producing, selling, and using but
requires an active search to evaluate current routines for possible changes. Search
involves people gathering intelligence by purchasing licenses, doing joint research,
experimenting with different processes and designs, improving engineering, and so
forth. The LDC firms and governments obtain technical knowledge through transfer
from abroad as well as internal innovation, adaptation, and modification. Paradoxically, LDCs can only buy information from abroad before its value is completely
assessed, because this implies possessing the information.
The price of knowledge, determined in the wide range between the cost to the
seller (often a monopolist) of producing knowledge and the cost to the buyer of
doing without, depends on the respective resources, knowledge, alternatives, and
bargaining strengths of both parties. Selling knowledge, like other public goods,
does not reduce its availability to the seller but does decrease the seller’s monopoly
rents (Nelson 1978:18; Fransman 1986).