Developing Countries and

Technology Cooperation

an industrial capacity-building perspective

United Nations Industrial World Business Council for

Development Organization Sustainable Development
Developing Countries and
Technology Cooperation
an industrial capacity-building perspective

United Nations Industrial World Business Council for

Development Organization Sustainable Development

Vienna, 2002
 table of contents
2 foreword UNIDO

3 foreword WBCSD

4 executive summary

6 introduction
technology & development

10 the ten cases

Alcoa: The Alumar refinery and smelter – Brazil
Bayer CropScience: Integrated Pest Management projects
Brazil & Guatemala
BP Solar: The Municipal Solar Infrastructure project
Philippines
DaimlerChrysler: sisal fiber project - South Africa
Lafarge: Lafarge DuJiangYan Cement Company - China
SC Johnson: Pyrethrum sourcing – Kenya
Lydec (suez) providing access to electricity for
low-income neighborhoods - Morocco
Coca-Cola: the entrepreneur development program
South Africa
CH2M HILL: landfill energy recovery projects – China
RMC: RMC Readymix India

22 key findings
challenges
success factors

28 appendix
bibliography

30 about WBCSD

31 about UNIDO

1
 Foreword
UNIDO
Technology cooperation has always been at the heart of UNIDO’s mission to help developing
countries and economies in transition in their struggle against marginalization in today’s globalized
world.

In developing countries in particular, low intensities of applied technologies constrain dynamic

investment and competitive industrial development. Inadequate skills, limited access to technical
information, ineffective institutional and regulatory frameworks, as well as organizational rigidities
impede technical change and innovation. Industrialized countries generate practically all the world’s
technologies and, while some developing countries are able to adopt and adapt some of these
technologies to their needs, most of them are technologically marginalized. Sustainable industrial
progress involves responding to this technological marginalization by applying technology transfer
and management techniques at appropriate national, sectoral and enterprise levels.
The international agenda recognizes the importance of investment in technology for reducing
poverty. UNIDO must rise to the challenge of addressing this and assisting developing countries
accordingly and on a sustainable basis.

The private sector is a strong ally in UNIDO’s mission on technology transfer, industrial partnerships
and investment facilitation. I therefore particularly welcome the cooperation between the World
Business Council on Sustainable Development and UNIDO, which has resulted in the publication
of analyses of selected specific cases of business-led technology cooperation as a means of
strengthening the technological capacities of developing countries. I look forward to continuing
this valuable cooperation and to reinforcing the linkages between UNIDO and the member
corporations of WBCSD to ensure sustainable technology and investment flows into developing
countries to accelerate productive growth.

The analyses in this report reaffirm the reality of a generic, robust technology cooperation process
that can be replicated and disseminated through capacity-building programmes, with necessary
adaptations to local economies and cultures. A successful technology cooperation process includes
elements such as needs assessment, clear national priorities for technology development,
identification of appropriate forms of cooperation, an enabling environment and capacity building.
Furthermore it is now widely accepted that official development assistance continues to play an
important role in leveraging foreign direct investment and facilitating other forms of technology
cooperation.

The World Summit on Sustainable Development in Johannesburg later this year will provide a most
appropriate setting to mobilise political will and the necessary financial commitment to intensify the
international community’s efforts in the area of technology cooperation. UNIDO is prepared to
demonstrate leadership in these efforts, drawing on its long-standing expertise and close networks
of stakeholders.

Carlos Magariños
Director-General of UNIDO

2
Foreword
WBCSD

Technology cooperation is necessary to generate wealth and bring social progress in developing
economies. We are pleased that UNIDO, in this joint case report, shared our interest to look at a
broad spectrum of projects. These range from large scale projects, like a cement plant in China,
to local farming in Brazil, Guatemala and Kenya, micro-enterprises in South Africa or photovoltaic
electrification in remote rural areas of the Philippines.

We are also deeply grateful to our members who provided insight into the challenges they faced
and the lessons they learned. Their experience brings the word cooperation truly alive.

While policy documents still coin it technology “transfer”, this process only succeeds through a
cooperation between provider and receiving communities. As evidenced in the following cases,
technology is a key solution provider to sustainable development, but technological hardware is
insufficient on its own. Software is equally important to build the local capacity be successfully
exploit the technology. Companies who have invested time and efforts into these cooperative
ventures have learned a lot in this process.

Yet, companies can devise all the technology they want, but if the institutional frameworks are
lacking, technologies will never be utilized to their full potential, and to the full benefit of society.
Well-functioning local governance, with a strong educational and technical fabric, is essential for
successful technology dissemination.

More could be achieved by the allocation of public development assistance to build a local
environment that is less risky and more predictable for private investors.

But business can be counted as a partner in cooperating in this effort.

Björn Stigson
President, World Business Council for Sustainable Development

3
 executive
summary

Technology transfer and cooperation allied to local capacity building make a clear difference in
fostering sustainable development in developing countries.

This report provides an analysis of technology cooperation from the perspective of ten member companies of
the WBCSD. Each case’s contribution to developing industrial capabilities has been examined to identify
results, benefits and key challenges and success factors. From this we provide several key recommendations to
business and policy makers. For the business audience this study highlights specific considerations in
undertaking technology co-operation with a developing country partner. For policy makers, the study high-
lights the need to reduce the impediments to Foreign Direct Investment (FDI) and successful technology
cooperation, in particular the need to create greater synergies between Official Development Assistance

(ODA) and FDI. For all readers, the study provides ten new examples of technology cooperation and insights
into the way business is contributing to the creation of more sustainable livelihoods.

Methodology
The ten cases were selected from the WBCSD Case Study Collection to be researched and analyzed under a framework jointly
designed by UNIDO and WBCSD. This report is based on the input of a large number of individuals – from the WBCSD companies,
local companies and organizations, national and local governments, Intergovernmental Organizations and other key people involved
in all the projects. However, it must be
recognized that this study was compiled
through the lens of the participating Company Project Country
companies. While this is only one way BP Solar Municipal Solar Infrastructure Project Philippines
in which technology transfer can occur Suez (Lydec) Low-income neighborhood electrification Morocco
project
these are business cases. They highlight
Coca Cola Entrepreneur development program South Africa
the different roles business has to play Lafarge Lafarge Duijangyan Cement Company – China
and the contributions it can make to construction projects
technology cooperation and CH2M HILL Landfill site methane recovery projects China
strengthening the developing countries SC Johnson Supply chain management –Pyrethrum Kenya
Board of Kenya
capacity for sustainable development.
Bayer Integrated Crop management projects Brazil &
The cases all look at technology Guatemala
cooperation from the stage the project DaimlerChrysler Natural fiber project South Africa
is launched. They do not look at any RMC Joint venture company: RMC readymix- India
pre-project technology options cement India
evaluations.
Alcoa Alumar plant Brazil

4
Key Findings and On the business side understand all those impacted by the
Recommendations Acceptance and understanding must be
technology and better facilitates the
necessary cooperation.
The creation of sustainable enterprises generated at the local ‘user’ level. A
in developing countries is a vital tool for future benefit and improved livelihood Effective communication and
eliminating poverty and ensuring must be anticipated from the proposed interaction is essential at all stages.
sustainable development. However, technology. A fundamental first action Sensitivity to languages and dialects as
neither business nor governments can is the provision of basic explanations, well as cultural differences must be
do this alone. Recipient governments, conveying the message of ‘why’ a demonstrated for the cooperation to be
the private sector and civil society each technology should be adopted. Efforts successful.
contribute to achieving success. devoted to explaining the technology
Businesses must also seek to capture
and its potential benefits will enhance
Cooperation is essential – for new learning opportunities from each
the initial acceptance of the technology
technologies to meet development technology cooperation effort. While
as well as the presence of the imple-
objectives, the host country each new project will pose location
menting organization(s). It can also
government and the business that can specific considerations, knowledge and
enhance the effectiveness of subsequent
provide the technology must experience from previous projects, if
capacity building efforts.
communicate intensely at the captured and shared within the
appropriate level and cooperate. The Capacity building should be broadly organization, increase the chance for
technology cooperation must also bring inclusive and adaptable. Technology future project’s success.
mutually beneficial outcomes to ensure cooperation is rarely successful and In conclusion
the necessary long-term commitments sustainable without some form of
The analysis of the ten cases did not
from all parties. capacity building. This study further
reveal surprises or success factors that
highlighted however, that capacity-
On the policy and government side had escaped the notice of other experts
building efforts are made more effective
Greater synergies between ODA and in technology transfer and cooperation.
when they are extended, adapted and
FDI must be created. Many of the All the factors listed above and detailed
localized. This includes the extension of
challenges highlighted in this study in this report have been covered
education and training to other groups,
translate into potential risks for the extensively elsewhere.
such as community or school groups,
companies providing the technology. and the inclusion of women and This confirms the reality of a generic,
As long as these risks are present or children; the methods and delivery of robust technology cooperation model
perceived, it is less likely that firms will education and training must be process that can be replicated and
invest and engage in technology adapted to local conditions and to the disseminated through capacity building
cooperation. A portion of ODA should knowledge and skill levels of the programs that only need to be adapted
be used to reduce these risks by trainees; and that this is best achieved to local economies and cultures.
building local technical and social by developing local trainers.
It is not necessary to reinvent a good
capacity, better governance, accounta-
Pre and post project assessments process project by project. An efficient
bility and administration. In this way it
enhance the likelihood of success and program that deals with needs
will improve the local business
the ability to replicate technology assessment, capacity building and
framework and foster technology
cooperation in other countries. A cooperation guidelines will enable
cooperation, investment and enterprise
detailed assessment of the people to technology recipients and providers to
creation.
be involved and their needs and work together and reduce the risks,
Government spending within misunderstandings, wasted efforts and
capabilities must be conducted and
developing countries should also be
existing infrastructure evaluated. This disappointments. Such a program,
directed to reduce private investment
requires in some instances a detailed with the support of ODA, will accelerate
risks. This includes supporting capacity
analysis of the needs and capacities of foreign direct investment into, and
building, from basic education to
separate regions, communities and even development within, the developing
specialist research and development
individuals. economies.
capabilities, as well as supporting
necessary infrastructure developments. Dialogue and partnerships with
In addition subsidies and taxes could be stakeholders must be maintained for
redirected to support technology technology be accepted, diffused and
development and sustainable enterprises. adopted. This allows the firm to better

5
 technology
& development

Technology, for the purpose of innovations and technological progress. the transmission of technology (i.e., the
this report will be defined as a entire system) from one country (tech-
Developing countries are in a position nology supplier) to another (technology
system of knowledge, skills,
to benefit from the lessons learned by recipient).
expertise, and organization used
developed countries and avoid
to produce and utilize goods and
repeating the mistakes of past For many people, especially those in the
services that satisfy social demand technologies. These countries do not least developed nations of the world,
have to follow the same trajectory of these many new technologies are
Throughout human history technology technological progress as the developed simply not accessible. They are often
has played an important role in shaping world; rather, they can leapfrog to the unaffordable, or inappropriate in certain
human society and development. newest, most productive and forms. And in many instances a country
Technological changes leading to environmentally sound technologies may not be familiar with a new
mechanization and industrialization available. It makes no sense to repeat technology nor have the necessary
have led to much social change, and the developed nations’ failures during capabilities to adopt this technology
have often had significant their 19th and 20th Century without a comprehensive effort of
consequences for human development. industrialization process. Investing in technology cooperation inclusive of
In some instances, technology has been less energy- intensive, less material- technological and institutional capacity
a powerful tool for poverty reduction intensive, and less polluting building.
and improved standards of living. technologies makes economic,
environmental and social sense. This Technical progress
Distribution of technology however requires effective technology Technical progress plays an important
While the Industrial Revolution and transfer and cooperation. role in the economic development of a
the many more recent technological country. According to widely-accepted
developments have certainly brought Technology transfer and cooperation for definitions, technical progress means
about unprecedented changes in many the purposes of this discussion is technical changes in production
people’s material and physical well defined as the transmission of equipment, production methods
being, these benefits have not been technology produced and/or used in (techniques), and/or final products that
evenly distributed across the globe. one place for a given purpose to generate positive economic effects.
Therefore a great potential lies in the another place and/or for another
transfer of technologies to those areas purpose as a technological innovation. Such technical progress is important for
that are still yet to benefit from such In an international context this refers to development for several reasons.

6
Quantitatively, it can speed up the rate requires incorporating both the “hard- of knowledge and skills accompanies
economic growth as it provides for ware” technology components and the physical technologies.
increased productivity and efficiency in equally essential range of “software” Technological capacity building, the
using existing labor, capital and natural components. Both components are knowledge and skills that firms and
resources. Technological developments necessary to ensure a continuing stream individuals need in order to acquire,
may also contribute to an increase in of economic benefits that accrue fairly assimilate, use, maintain, adapt, change
the scale of production that may to all partners. This includes process and create technology, is an essential
ultimately accelerate the growth of a machinery and equipment, as well as dimension of the technology
national economy. patented and unpatented manufactu- cooperation process. Technologies will
ring techniques and production know- only be fully exploited if the knowledge
Technological progress may be how. This can also include, more of how to put them to use is widely
distinguished into two main forms - broadly, managerial, organizational, and disseminated and applied.
product and process innovations. A marketing knowledge that contribute to
technology supplier can therefore the development of new skills. Even the best, most environmentally
enhance a company or country’s sound hardware can have a negative
technological capabilities by providing impact if misused or mismanaged, or if
This report has deliberately chosen to
product or process innovations, or not supported by the appropriate
use the word cooperation rather than
both. A product innovation may enable resources, institutions and
transfer in order to emphasize the
a country to manufacture new products infrastructure. A failure to transfer the
importance of partnerships and
or improve the quality of the existing required skills and knowledge can result
longer-term commitment. For fifty years
ones. This in turn may lead to an overall in operational failures, poor quality
development assistance has suffered
upgrade in a country’s technical production, and compromised safety
numerous technology transfer setbacks
abilities, potentially leading to the standards. In addition, there can be
because the vital sustaining partnerships
establishment of more competitive adverse impacts on the natural
and longer-term commitments were
industries that can generate hard environmental and surrounding
absent.
currency revenues for the country. populations – often in a manner that
Where technology transfer has been
severely affects the livelihoods of these
criticized as being a mere euphemism
Technology cooperation people.
for the transfer of capital, the notion of
In the context of sustainable
technology cooperation encapsulates
development, technology cooperation The responsibility for capacity building
both physical transfer coupled with
has been recognized as a key “means of lies with both the companies
efforts to transfer knowledge and build
implementation”, for implementing the transferring technologies to developing
capacity that is considered necessary for
recommendations of Agenda 21. countries as well as those developing
the adoption of new technologies in a
Several meetings of the Commission on country governments at both local and
developing country location.
Sustainable Development have adopted national levels. It is important that
recommendations on technology capacity building takes place at
transfer. The Special Session of the Technology is at the core of competi- different levels for the success of
General Assembly for the 5-year-review tion and at the core of development. individual business and projects as well
of the Rio commitments in 1997 Where implemented correctly through for the development of industrial
reiterated the importance of technology technology cooperation it is proving to capabilities at the host country level.
transfer. The Report of the Secretary- be an engine for improved
General for the preparatory process of environmental performance and Project Specific Capacity Building
the World Summit on Sustainable poverty alleviation. For specific technology transfer projects
Development, Implementing Agenda it is vital that capacity building is an
21, identifies technology transfer as one Capacity building interwoven component of the project’s
of the ten key areas in which progress is Technological “hardware” is insufficient design. In this respect, technology
needed. on its own. “Software” is equally impor- transfer efforts are most effective when
Technology cooperation requires tant to the successful diffusion of tech- developed in a cooperative manner -
longer-term partnerships in which all nology. For the development of indus- technological progress does not result
parties have a vested interest in trial technological capabilities and eco- from a simple hand me down process.
successful continuing operation. It nomic growth it is vital that a transfer This process of knowledge creation and

7
 capacity building requires a targeted and knowledge diffusion would exist to quantity of managers and professionals
education and training effort. This will support all technology cooperation available.
ensure that those involved develop the projects, and adequate governance
skills needed to understand, utilize, and structures would be effectively in place Investments in R&D are also a vital part
replicate a technology. The responsibi- at all levels. This is however, not often of capacity building, and can transform
lity for this lies with those organizations the case. In particular, in the Least knowledge into a critical factor of
directly involved in the project. In this Developed Countries (LDCs) this is often production. This can contribute both to
instance, for the technology transfer to a major deficiency that individual the success of any single technology
be sustainable, it is the company (or projects will need to address. R & D transfer as well as to the recipient
companies) driving the technology networks may be poorly linked or even country’s ability to innovate. For
cooperation that need to ensure non-existent, and cooperation between technology to be a tool for human
capacity building efforts are delivered local government, NGO’s, the private development purposive effort and
and effectively targeted. sector, and the community may in fact public investment are required to create
be very poor. All this can present impedi- and diffuse innovations widely.
This can range from the transfer of new ments to technological progress and
skills to the upgrading of existing skills. development. Governments are also responsible for
Where new hardware requires institutional capacity building as this
maintenance and repair skills not Government supported capacity also contributes to the strengthening of
possessed by the recipient organization, building foundations for technology cooperation.
group or region then it will be Local and national governments in Local, regional and national
necessary to train people in these new developing countries also have a very governments, especially in LDCs need
skills. In other instances, the important role to play in capacity to enhance their institutional capacities,
introduction of a new technique or building. This includes developing all with respect to activities such as
hardware may require the upgrade of levels of education provisions and the collecting information, effectively
existing skills to ensure that the true capabilities of national and regional planning of expenditure, delivering
potential of the technology is realized. research and development groups, as public services, fighting corruption,
well as strengthening institutional and protecting property rights.
For specific projects, it may also be capabilities at all levels.
necessary to address the very basic level In addition, intergovernmental
of skills of people in the organization or The availability of adequate human organizations play a vital role in
region where the project is being capital can be a driving force behind capacity building efforts, both at an
delivered. Low literacy rates for the choice to undertake technology individual project level, as well as on
example may place additional demands investments in a country. Where basic an ongoing basis, often at a sectoral
on the capacity building components of literacy skills are low and education or regional level.
a project. A business seeking to transfer levels very poor, the ability to attract
technology may need to adapt the investments and integrate new Modes of transfer
delivery of the project where recipients technologies and technical capabilities Technology cooperation can take many
of the technology are unable to read can be considerably challenging; different forms. These range from
and write. It can be argued that such government support for developing the highly structured, formal technology
issues are the responsibility of a technological competence is clearly transfer contracts to less formal types of
developing country’s government. vital. cooperative agreements. Types of
However, individual projects must not agreements include: patent; know-how;
overlook such basic skill deficiencies as The investments made in education and trademark; franchise; distribution; copy-
being out the scope of their training, at all levels, determines the right; computer software; technical
consideration as this may negatively conditions for technology cooperation, services and assistance; engineering
impact of the overall success of a project. as this determines the skills and knowl- services; and management services.
edge foundation available for technology
Further, institutional capacity building cooperation efforts. Basic education is These agreements vary in the type and
efforts may also become a vital for raising literacy levels and basic level of capacity building assistance that
consideration of a specific project. In an abilities for a workforce, and advanced is provided. A pure patent license for
ideal world, networks for cooperation education contributes to the quality and example, may provide no technical

8
assistance, know-how, or intellectual transfer and increased international provide enabling environments for
property rights, whereas other trade. The reason for this is that FDI technology transfers.
agreements may center on the predominantly occurs in a limited
provision of technical assistance and number of newly industrialized Particular emphasis should be put on
knowledge transfer. In addition, hybrid countries. business development that involves
agreements are often formed based on building up infrastructure, wealth-
one or more intellectual property. This The bulk of foreign finance goes to a generating capacity and
can combine, for example, a patent few newly industrializing economies, competitiveness of a country.
and know-how. whereas most middle and especially
lower-income countries experience
Financing technology difficulties in attracting sizable external
development investment. Beyond the newly
There are several types of international industrializing economies that attract
investment flows which can support most foreign investment, particularly
technology cooperation, including: middle-income countries could attract
additional private investment.
● Foreign Direct Investment (FDI).
This involves direct investment in Limited ODA, unsustainable levels of
physical plant and equipment by budget deficits and external debts, and
business interests. the need to maintain fiscal discipline to
● Official Development Assistance control inflation and spur economic
(ODA). This includes grants and growth, make it imperative to mobilize
interest free or subsidized loans for domestic and international capital
various purposes to developing sources to finance developing countries.
countries primarily from member Creating a business-friendly
countries of the Organization for environment by removing the multiple
Economic Cooperation and obstacles to efficient private sector
Development (OECD). activity and investment is the key to
● Loans. These include loans from private sector investment.
either International institutions or
from commercial banks. A special challenge remaining is the
● Portfolio Investment. This involves mobilization of financing for
purchase of stock or shares of local development to those countries that
companies directly or through most desperately need it. Yet, it will be
investment funds. more difficult to channel foreign private
capital flows into LDCs, even if local
Of all foreign capital flows to investment framework conditions
developing countries, over the past improve over time. This is particularly
decade, only FDI steadily increased true for countries in South Asia, Central
(from USD 200 billion in 1990 to USD Asia and Sub-Saharan Africa with scarce
1.3 trillion by the end of the 1990s). natural resources, small markets, poorly
Other forms of private capital flows, qualified labor and little infrastructure.
mostly in the form of portfolio ODA provides an effective tool for
investments and bank lending, financing development that may in turn
experienced fluctuations and high leverage private investment in those
volatility over the same period. LDCs with few opportunities to
otherwise attract foreign financing.
While FDI does offer an attractive
medium for transfer, the reality is that The importance of the private sector
many developing nations have thus far has increased considerably. However a
failed to benefit from FDI, technology definite role exists for governments to

9
 The Case
Studies

Presented here are summaries of the ten case studies that were researched and analyzed for this report. Here
we provide an overview of each project, with key outcomes highlighted.

The full versions of each case study can be found in volume II of the report

10
Alcoa: The Alumar refinery noted for developing a strong commit- region, even in the managing seats.
and smelter – Brazil ment to policies, cost awareness and a Alumar also work closely with Local and
sense of ownership, as well as improved Federal Colleges and Research
Alcoa Aluminio in Brazil operates the group work and responsibility for self- Institutes. Partnerships with vocational
largest Alumina refinery in South development. As a result of process institutes, colleges and universities have
America and the second largest smelter efficiency and high management given many students a chance to
on that continent. The Alumar plant, standards, Alumar was awarded both enhance their education and apply their
one of Alcoa’s most modern smelters ISO 9002 and 14001 certifications by knowledge in a practical environment
and refineries, is situated in Sao Luis, in July 2000. through internships. Alumar is also
Northern Brazil. sponsoring community programs in
environmental education.
Alcoa’s values, training and financial
support were made available to Alumar Alumar is now recognized
in the early stages of development, worldwide as one of the
along with technical assistance and world’s largest industrial
experienced workers. Due to the lack complexes for production
of industrial background in the region of alumina and aluminum.
there very few specialized workers avail- In the refinery the present
able initially; this was in fact the first production rate is around
heavy industry of its type in the area. 1.27 million tonnes per
During this stage Alcoa’s plant in Poços year of alumina, and in the
de Caldas supplied several staff to run A labor force of about 13,000 people smelter the current capacity is 365,000
the plant, and several technicians came was employed at the peak of construc- tonnes per year of metal. To support
from the USA to conduct and teach tion. More than 80% of those workers the ‘heavy industry’ a medium-heavy
operational activities. Several techni- came from Maranhão. Since the industry has developed in the region,
cians hired by Alumar in São Luís were commencement of operations, Alumar mainly focused on fabrication work-
also sent to other plants for training. has become an important regional shops and industrial gas production.
economic center, offering more than Due to the large amount of goods
Over time the company developed 1,950 direct jobs and another 1,500 transaction within the São Luís area,
extensive training programs that have indirect jobs. Currently more than 98% dozens of local industries have
enabled local people to form a of the employees come from the local developed since Alumar installation.
dedicated, high performance workforce.
Depending on their position, they
received anything from an introductory Project Type: construction and start up of Aluminum smelter and refinery
Project Cost: Capital invested in plant US$ 1,7 billion
course on safety and legal procedures,
Drivers: Growing aluminum demand in Brazil; third largest bauxite reserves; alu-
through to a complete College educa- minum importation substitution and exportation of the surplus production;
tion. Career plans were developed to Federal Governmental Program to stimulate industry growth in this region.
Financing: The Refinery is owned by a consortium of Alcoa Aluminio do Brasil S.A
determine the appropriate training for (35.1%), Billiton Metals S.A (36%), Alcan S.A (10%) and Abalco S.A
each individual. This was a win-win for (18.9%). The Smelter is owned by Alcoa Aluminio do Brasil S.A (53.66%)
and Billiton Metals S.A (46.34%).
the employees, the company and the
Employment: Construction: 13,000 jobs. Operations: 1,950 direct jobs, 1,500 of indirect
region - more skilled employees meant jobs. >98% from local region.
enhanced and more competitive Training: Training and career development offered to all employees, based on Alcoa
Business System (ABS).
outputs and consequently an improve-
Capacity Building: partnerships with vocational institutes, colleges and universities
ment in the local industrial capability. Economic Impact Raw materials: US$ 186 million; Payroll Charges/Salaries/benefits: US$ 59
million;
Local suppliers: US$ 60 million. Taxes paid: State: US$ 22 million; Municipal: US$ 2,8 million
Great improvements have been (Alumar s the largest taxpayer in the State)
recognized in the quality of the Trade: 20% alumina and aluminum sold to domestic market, 80% to the inter-
operations over time. Training and national market.
Flow on business
development programs have led to a impacts: medium-heavy industry developed in the region, plus support services
highly skilled and qualified workforce. Standards: Alumar was awarded both ISO 9002 and 14001 Certifications by July 2000.
In particular, employees have been

11
 Bayer CropScience: products was also an important aspect comic strips, card games and posters
Integrated Crop of the project. containing pictograms were among the
Management projects most effective tools used.
Brazil & Guatemala Participatory training approaches in
communities, with an emphasis on all In Brazil, 25,000 small-scale farming
German company Bayer CropScience family members and especially women families were reached between 1995
developed an Integrated Crop and children, formed the cornerstones and 2000, including 1,300 teachers and
Management (ICM) training program of this campaign; children were actively 2,500 children. Positive results were
for farming families in Latin America. involved in the campaign as they were recognised in relation to crop and pest
The pilot project began in Brazil in May important communicators in regions management aspects, such as crop
1995 and in June 2001 it lead into a where they often received more rotation and conservation tillage, the
Public-Private Partnership Project in
Guatemala with Deutsche Gesellschaft
für Technische Zusammenarbeit (GTZ),
a German government owned corpora-
tion for international co-operation.

The overall campaign was based on the

basic concepts of Integrated Crop
Management (ICM), which includes the
protection of natural resources and the
conservation of biodiversity as well as
Integrated Pest Management (IPM). For
these projects, special attention was
given to Integrated Pest Management
(IPM), which includes indirect measures
of weed, pest, and disease prevention education than their parents. value of beneficial organisms and the
such as crop rotation and monitoring A mix of communication tools was safe and effective use of crop protection
pest populations against threshold levels; used for conveying the ICM and IPM products.
it uses direct control through biological, messages. These included the use of In Guatemala about 3,000 people have
biotechnological, mechanical, and demonstration plots, radio programs attended the training sessions in the first
chemical measures. Under this system, and a “lead farmer” approach. Special 6 months. New cultivation techniques
the use of crop protection products is attention was also given to finding are improving practices, and it is hoped
defined by targeted and optimized use, appropriate methods for conveying they will contribute to increased yields
and adapted to local environmental and information to the many beneficiaries and more sustainable livelihoods of
economic conditions. The correct and that could not read or write. Visual farmers as the project progresses. To
efficient handling of crop protection materials such as films, educational- date, positive results have already been
achieved in peanut production, where
yields and earnings tripled. This project
Project type: Agricultural training, know-how and technical assistance. includes a broader focus – including, for
Financing Project: Bayer financially supported the pilot project and both Bayer and GTZ example, crop diversification and market
financed the Guatemala project. In kind support from partner organizations
including providing specialists to train the local trainers. development for agricultural produce -
Motivations: The ICM/IPM campaign emerged from the company’s commitment in 1995 that could only be successfully
to ICM. The project was also set up to help the company develop and conducted through burden sharing via
improve new training activities.
Other institutions/ the public-private partnership approach
partners involved: Partner for Guatemala project:: German service company: Gesellschaft für adopted. The program in Guatemala is
Technische Zusammenarbeit; Local authorities including health, education,
and agriculture departments; farmers’ association (AFUBRA); industry group also aiming to conserve biodiversity
(SINDIFUMO); and agricultural workers trade union. through the avoidance of unsustainable
expansion activities by farmers who
Reach: Brazil, 25,000 small-scale farming families; 70 local trainers.
Guatemala, 917 growers, 2610 pupils; 40 external trainers.
often leave their unproductive land in
Economic progress: peanut production yields: net earnings tripled. search of “new lands” for agricultural
purposes in tropical rain forest area.

12
BP Solar: The Municipal Solar
Infrastructure Project –
Philippines

BP Solar has provided solar energy and

upgraded basic facilities in remote
un-electrified communities in the
Philippines through the Municipal Solar
Infrastructure Project (MSIP). Solar
energy was the source of electrical
power for all systems provided, bring-
ing the advantages of very low operat-
ing costs, high reliability, and suitability
for operation in isolated communities.
The community development program systems (such as light bulbs for the
The project included delivery of the
included assistance with managing the lighting systems). This money could
solar systems as well as energy related
energy services and developing also be allocated to upgrading products
infrastructure such as lighting facilities,
revenue-generating activities. In each and services, such as the purchase of
vaccine fridges, school equipment, and
village ad-hoc committees were formed new videos to play on solar powered
water pumps.
- a health committee, school committee, televisions and videos.
and water committee. BP trained
Social preparation, training, and individuals to run these committees, This rural development project has
community development programs manage budgets and conducting provided health, education and gover-
were major components of this project. meetings. BP also spent time with each nance benefits to more than 500,000
The social preparation phase was an village, exploring revenue-generating poor Filipinos in 11 Provinces, 53
essential first step, whereby BP
explained the new technology to each
Project: Rural solar electrification
village. This included explaining the
Duration: MSIP commenced in November 1997 and was completed in May
maintenance commitments and pay- 2001
ment programs that would be required. Drivers: Philippine government
Location Mindanao and the Visayas Provinces, Philippines
BP trained 150 community develop- Cost: US$27 million
ment officers at the start of the project, Funding: ODA: Soft loan incorporating 35 percent grant from the Australian
Government
and during the implementation phase
Training: 2,250 villagers trained
many local community members and
Reach: 1,145 packaged solar systems to benefit 500,000 poor Filipinos in
local businesses were trained to manage 435 villages
the systems over time. Two people in Impact: positive health and education impact on women and children
each community were trained on
simple maintenance of the systems.
Municipal Engineers and operatives opportunities that would enable them Municipalities and 435 villages in the
were then trained on the more techni- to pay for the services provided by the Mindanao and Visayas regions. This
cal repairs and maintenance of the solar systems. They explored activities includes energy provisions to district
system components. Advanced training such as growing onion bulbs, animal hospitals and health centers, municipal
was also provided to the Universities to breeding, and basket weaving. These and village halls and schools, as well as
enable them to fully dismantle, repair activities would cover the service costs potable water supply systems and light-
and reassemble the components. In of receiving the benefits of the solar ing for markets and fishermen's wharves
total, more than 2,250 villagers were energy - such clean water supplied from in communal areas. In particular,
trained under this program. Spare parts solar energy powered water pumps. women and children in these communi-
were also distributed to the municipality These revenues were also required to ties have benefited greatly through new
so that the communities could have fund maintenance and parts replace- and improved education opportunities
easy access to replacement parts. ment, as well as upkeep of the service and better health facilities.

13
 DaimlerChrysler: Sisal Fiber automotive industry. Brits
Project - South Africa Textiles made a one-time
payment of U.S. $80,000 for
DaimlerChrysler have undertaken a this technology. Borgers’ role
project to transfer technology for the included prescribing recipes
manufacture of vehicle components suitable for the components
from natural fibers from Germany to involved; recommending raw
South Africa. The objectives of the material suppliers, assisting
project were to set up an entire process with plant sourcing and
chain based on the use of sisal fibers. layout, and providing on-
This included the farming of sisal, going technical and quality
processing of the fibers, manufacture of assistance. Also included was
the components, and the release to the an exchange of personnel,
Mercedes-Benz Plant of Daimler including a technical team to
Chrysler South Africa. help set up the production
line.
The technology came from German
firm, Johann Borgers GmbH & Co. KG Through an existing
(Borgers), who were already experi- technology agreement
enced in natural fiber component between Borgers and NCI,
production. The technology recipients Borgers provided assistance
of the material in the Mercedes Benz C
were two local South African firms, Brits to NCI with the design and
Class’s rear shelf. The two local firms
Textiles & NCI. In addition, development of the lamination,
have benefited from this technology
DaimlerChrysler has worked with the trimming and assembly process. Under
transfer in that they are now successful-
Council for Scientific and Industrial this agreement NCI pay a royalty of 2%
ly processing the fibers and producing
Research to improve the entire process on revenue generated to Borgers to
the components to the required
supply chain, including the natural fiber retain their technological support.
standards for the Mercedes vehicles.
production at sisal farms.
The first sisal component was released
Two avenues now exist for additional
Brits Textiles signed a technology agree- for inclusion in the Mercedes-Benz C-
business for the two South African
ment with Borgers to receive technology Class vehicle in October of 2001. The
firms. Additional uses for the natural
for the manufacture of molded parts sisal - cotton mixture from the local
fiber have been identified, thus
produced from natural fibers for the manufactures now makes up 75 percent
presenting additional opportunities for
these firms to expand their production.
Further, a number of other automobile
Project Type: Technical assistance, licensing and supply chain research and manufacturing firms have begun using
management
natural fiber components, and the
Technology
recipients: Brits Textiles and NCI customer base for the two South
Partner African businesses is continuing to
organizations: DaimlerChrysler AG, Johann Borgers GmbH & C; The Council grow.
for Scientific and Industrial Research (CSIR)
License cost: One-time payment of U.S. $80,000 for processing and
manufacture technology (Brits) In 2000, South Africa exported 100 000
Technology agreement with NCI – 2% royalty vehicles, five years ago it exported
Drivers: DaimlerChrysler driven effort to maximize local content in none; a mirror of the change has taken
vehicles; preference for natural fibers; and success of place in South Africa's automotive
DaimlerChrysler’s pilot project in Brazil (POEMA)
sector. The challenge for the industry
Status of project: Technology transferred to 2 SA firms; production commenced
October 2001 – 220 component per day now is to enhance its competitiveness
Flow on effects: New uses for sisal developed – new components; and new and continue introducing new environ-
customers for technology recipient firms ment-friendly materials like sisal into the
Employment: 30 new jobs for processing and manufacturing; stabilization component of automobiles.
of jobs in farms

14
Lafarge: Lafarge DuJiangYan management structures that meant
Cement Company - China decision-making was often inflexible
and non-inclusive. They were also not
French company Lafarge entered a joint used to compiling regular written
venture agreement with DuJiangYan reports As part of this project, a more
Building Materials Corporation to form open structure was adopted to
the Lafarge Duijangyan Cement encourage information sharing at all
Company. Under this joint venture levels, and a commitment to targets
agreement, a new cement plant has and quality standards was made by all
been constructed in ChengDu, in the parties.
Sichuan Province of southwest China.
The specific objectives of this project Lafarge best practices were transferred
were to construct a new plant with during the construction phase of each
state-of-the-art dry process technology, project, in particular those relating to
a new quarry and a railway for safety and environmental practices. The
transporting materials. Lafarge team worked with the design
and construction firm’s management
While divided into three separate teams to transfer skills and capabilities
turnkey projects, the company’s in manufacturing, installation and
objective was for each to be built project management. Specifically,
according to Lafarge quality, environ- implementation of a Technical
ment and safety standards. This was of Assistance Agreement that saw Lafarge manage and operate the plant in
particular importance in the construc- provide managerial and technical accordance with Lafarge’s policies.
tion phase as large-scale automation, expertise, reporting procedures,
strict safety requirements, high comparative data, training and advising For many this was the first time they
environment standards, and certain capabilities to the joint venture had collaborated with an international
management styles were essentially company. Intensive training programs company and the first time they had
new to the Chinese cement industry. In were carried out to ensure that all per- worked with such a large-scale project
addition, the construction partners had sonnel were adequately informed and and equipment. As a result of this
a tendency to adopt rigid hierarchical equipped with appropriate skills to project, local construction capabilities
have been developed that will

Project: Construction of new plant with state-of-the-art dry process contribute to ongoing regional
technology, a new quarry and a railway for transporting materials. economic development, particularly
Structure: Joint venture between Lafarge and DuJiangYan Building that related to new process technolo-
Materials Corporation
gies, environmental protection and
Technical Assistance Agreement between Lafarge and joint
high grade products.
venture company
Turnkey project with 3 Chinese design/construction firms.
Cost: US$158.8 million The plant, now in operation, has an
Structure of annual production capacity of 1.4
financing: Lafarge: US$ 77.4 million million tonnes of high performance
Chinese partner: US$ 25.8 million cement. Over 80 percent of the plant’s
Equity loans (IFC): US$ 55.6 million production equipment was sourced
Drivers: Strategy of establishing a substantial and profitable position in
locally and local firms were contracted
carefully selected regional markets. Increasing level of demand
for high quality cement in ChengDu region – result of for construction. The plant is equipped
accelerated infrastructure development program with the worlds most advanced
Partners: Chengdu Design Institute; China Building Materials Industry technologies, and is noted for its
Corporation (CBMI),
environmental friendliness, fuel and
Sichuan Railway Bureau; China Building Material Tangshan
Corp electricity efficiency and high quality.
Input material: 90% of the mechanical equipment and 75% of the electrical Currently the plant and the associated
equipment used for construction sourced from China quarry employ 350 people; mostly
Employment: Plant and the associated quarry employ 338 people recruited locally in China.

15
 SC Johnson: Pyrethrum
Project: Supply chain capacity building and technical assistance
Sourcing from Kenya program
Drivers: Effort to secure high quality raw material supply to avoid use of
Flowers, grown by subsistence farmers synthetic alternatives
in the highlands of Kenya are the key Training/
assistance: Planning and forecasting; plant husbandry; customer service;
active ingredient for value-added bio-efficacy testing.
products found in households around Status: PBK recognized SC Johnson “Partner in Quality”
the world. Pyrethrum, a unique daisy, is Employment: 300,000 jobs industry wide; 680 jobs with PBK
the source for a naturally occurring Economic
insecticide that degrades quickly back Impacts: Industry level: US$25 million in export sales value to Kenya
into the earth. Over the past 30 years, Regional level: 3% of profits going to payment for infrastructure
Farmer level: 900,000 Kenyans gaining access to monetized economy
U.S. company SC Johnson has become
through pyrethrum
one of the biggest single end users of
Social Impacts: Industry stabilization is funding schooling for more than 300,00
natural pyrethrins, for RAIDTM children
household insecticide products Environmental
Impacts: Perennial rotation crop helps maintain soil in 17,600 to 32,000
hectares on Kenyan highlands; little chemical, fossil fuel, fertiliz-
The Pyrethrum Board of Kenya (PBK), a ers or herbicides are necessary; pyrethrum crop does not
parastatal agency that controls and require irrigation. Relies on natural rainfall.
operates the entire pyrethrum business
in Kenya, manages the country’s total and professionalism that made them an through sharing of best practice
supply of pyrethrum through a network appealing supplier. However, the examples and on-going advice
of farmer cooperatives. SC Johnson has company maintained a preference for regarding establishment and
worked directly with PBK since 1970. using natural pyrethrins and felt maintenance of a safety stock to help
This relationship has extended strongly about maintaining the offset harvest shortages. SC Johnson
considerably beyond that of a normal relationship established with PBK. The has also provided technical assistance to
supplier-purchaser relationship, challenge then was to help PBK to PBK. The company has provided bio-
characterized increasingly by a strong reach higher standards as a supplier. efficacy testing protocols and tools to
degree of knowledge and technology Among the issues of greatest allow for a better comparison of results
exchange. importance was PBK’s ability to provide between products tested at PBK in
Kenya and at the SC
In the early days there was a focus on Johnson in the US. In
exchanging skills and knowledge addition, SC Johnson has
pertaining to crop husbandry and also collaborated in the
education and training. The focus of development of up to
the efforts shifted however in the last date analytical chemistry
ten years, predominantly as a result of methods that have aided
shortages experienced, as well as the in the identification of
increasing competitiveness of synthetic new and different
pyrethroids. pyrethrum extracts.
a reliable, consistent supply level of
Initially SC Johnson was sourcing pyrethrum. SC Johnson introduced its As a result of this long-term capacity
primarily natural pyrethrins; however Quality Assurance Audit to PBK in 1995 building effort, there has been a
during the early 1980’s, as a result of and at this time their processes were notable improvement in product quality
the supply shortage of pyrethrum, SC significantly below established criteria and a rise in production standards. PBK
Johnson turned to synthetic to be considered an SC Johnson have made continuous improvements
pyrethroids, which had improved in “Partner in Quality.” Efforts were then in their quality control programs, and
quality, become less costly, and directed at helping PBK reach this they have passed supplier audits from
maintained consistently adequate global standard. SC Johnson as well as by European
supply levels. A supplier was identified buyer Aventis. Standards continue to
in Japan, which provided very high SC Johnson has helped PBK develop rise and PBK is now seeking ISO
levels of customer service, efficiency planning and forecasting abilities certification.

16
Lydec (Suez): Providing access house. An elected street representative
to electricity for low-income was then made responsible for
neighborhoods - Morocco managing the connection and
electricity supply once established. On
In 1997 Casablanca-based Lydec, a average, each neighborhood association
branch of the worldwide energy, water became responsible for the street
and waste services group, Suez, was electricity supply for 20 houses, as well
charged by the Urban Community of as services ranging from technical
Casablanca with managing the management to bill collection. The
Casablanca electricity, water and investments were shared between
sewage networks. In Casablanca, more Lydec and the inhabitants who pay
than 400,000 people live in slums, with US$130 per connection for access to
no access to electricity and minimal service.
access to water and sanitation.
Lydec provided materials and technical
The first stage of this project, which assistance to ensure standardization and
commenced in 1998, gave priority to the effective management of the supply
electrification of low-income networks over time. The company
neighborhoods. This was based on a offered training to both the electricians
needs analysis, as well as the need to and the representatives from each
eliminate the major risks associated with street. Electricians were trained in how
the illegal connections being made to establish connections to the grid and sustainable economic system, based on
through existing electricity networks. provided with the necessary equipment the inhabitant’s economical reality and
to do so. Street representatives were allowing flexibility. The project has cre-
The provision of electricity to trained in managing the electricity ated ongoing employment for
Casablanca’s shantytowns was based on supply once established. This included approximately 200 people, and the
a system of extending the main identifying problems with electricity introduction of energy has also
electricity grid via temporary supply, reading electricity supply meters facilitated the creation of SMEs. In
connections, on a street-by-street basis, and collecting monies owed from each addition, the new energy technologies
to serve each house in the street. Cost- household. They were provided with a introduced are helping to avoid the
use of more
Project type: Electrification and local capacity building to shantytowns in Casablanca polluting traditional
Funding: Management contract; community labor exchange energy sources,
Reach: Electrification of 17,000 households (110,000 people) such as gas and
Training: Technical and managerial/governance capacity building at neighborhood level small generating
Financials: Global intended investment cost (30,000 households) US$6.6 million motors, thus
Achieved investment US$3.3 million reducing the
Expected annual turnover in 2002 US$2 million negative impacts on
Reduction of energy costs for client/community US$2.5 to 4.2 million p/yr
health and the
Jobs created: 600 for set up and maintenance
environment. In
addition, illegal con-
effective technologies were put in place basic training in electricity and safety, nections have significantly decreased,
and an appropriate tariff structure was and with the work tools necessary for therefore reducing the risk of minor and
defined in close relationship with local their activities. fatal accidents.
communities, neighborhood This approach will be replicated for
organizations and municipalities. So far, approximately 110,000 people water and sanitation, with pilot projects
The structure of the project is such that have benefited from this program in 40 planned for 2002.
primary networks were established by districts. Work is on progress for an
sub-contracted local enterprises. Private additional 100,000 people spread over
electricians then set up the individual 45 districts. The innovative financial
street networks that connected each scheme that was designed provides a

17
 Coca-Cola: The Entrepreneur kiosks, and mobile coolers for street important aspect of development in
Development Program – vending. South Africa as many micro-enterprises
South Africa The program was initially fully funded serve as a safety net at times when the
by each bottling company and Coca formal sector struggles - as has been
Coca Cola’s Southern Africa division, in Cola Southern Africa. Recently however, the case in South Africa in recent years.
conjunction with local bottling an agreement with the South African The opportunities presented by the
companies, have developed the government has enabled a redirection entrepreneur development program are
Entrepreneur Development Program in of funding to support the program. therefore promoting a sustainable
South Africa to help new entrepreneurs Under an agreement with South African means of economic support and
enter the supply chain and profit from Soft Drinks Manufacturers – of which poverty reduction. The success to date
new sustainable business ventures. Coca Cola is a major player - the South of the Entrepreneur Development
African Government has reduced excise Program highlights the importance of
The program specifically targets micro tax on sugar. In exchange, Coca Coal how trade, not just production, can
entrepreneurs in undeveloped markets are redirecting part of this saving to create jobs and boost market
who can enter the Coca Cola value fund micro-enterprise development development. This downstream
chain to generate income and profits distribution and capacity building has
for themselves. The program engages In total, over 7,000 people have been been vital to market development in
new entrepreneurs who demonstrate an trained under this program. In 2000 South Africa.
interest in business and display Coca Cola created 5,000 new outlets
potential capabilities and commitment. and 3,500 of these were by
In addition, existing outlets that participants in the
demonstrate the capability and capacity Entrepreneur
for growth are also included. Development Program;
this resulted in the
Once selected, the entrepreneurs are creation of 12,900
introduced to the Coca Cola system jobs in the Coca
and how it operates. They are provided Cola system. In
with targeted support and training in 2001 just over
basic business skills. This includes 3000 new outlets
training in pricing, stocking, were created, and in
forecasting, legal requirements, sales, 2002 the focus is to
and customer relations, marketing and be on ensuring that
advertising. The new entrepreneurs these continue to stay in
then enter into a business arrangement business and remain viable.
that makes it easier for them to access
capital equipment – such as trolleys and The majority of new jobs are created in
coolers and they are provided with start the informal sector, which accounts for
up stock. 60% of sales volume. This is an

Monitoring mechanisms, based on an Project type: Micro - entrepreneur capacity building

evaluation of individual sales and profit Drivers: New market opportunities; objective to increase sustainability
levels, have also introduced to monitor of retail outlets
the effectiveness of each entrepreneur. Funding: Company funded initially; now supported in part through
excise tax reduction benefits
When an entrepreneur demonstrated
Excise reductions: 1999 US$ 1.1mil, 2000 US$6.8 mil, 2001
improvements they are reviewed for an US$3.2 mil, 2002 US$11.8 mil
upgrade in their business and Training: 7,000 people trained in pricing, stocking, forecasting, legal
equipment. In addition, the Coca-Cola requirements, sales, customer relations, advertising and mar
keting
bottlers have also developed a number
Business creation: 2000: 5,000 new outlets; 2001: 3000 new outlets
of creative innovations to meet the
Employment: entrepreneur development program job creation 2000:
needs of these developing entrepre- 12,900
neurs. These include for example, Total Coca Cola system in South Africa: 30,000 (current)
sturdy transport bicycles, mobile mini

18
CH2M HILL: Landfill Energy ● Prepare an action plan to promote sites. The feasibility of the projects in
Recovery Projects - China the widespread replication and each of the 3 cities selected has been
adoption of landfill gas recovery demonstrated and the capacity building
In November 1997, engineering and technology in China efforts have been underway for some
construction firm CH2M HILL was hired time. However as of March 2002, the
to assist the State Environmental CH2M HILL worked closely with SEPA project is approximately two years
Protection Agency (SEPA) of the and the international funding agency behind schedule.
Peoples’ Republic of China. CH2M HILL (GEF) as well as the public works
provided advice on technical and bureaus and environmental protection Approximately 60 technicians and
economic feasibility and construction bureaus in each of three pilot cities. supervisory personnel were trained at
requirements for energy recovery
facilities at municipal solid waste
landfills. The project was intended to
provide incentives for eliminating
greenhouse gas emissions of methane
from landfills as China develops modern
solid waste disposal methods.

In many of China’s cities, solid waste

disposal sites are not yet properly
contained with impermeable lining
systems and liquid and gas removal
systems that are now considered stan-
dard practice in many countries. The
project was conceived by China’s SEPA
as a way to promote better waste Capacity building for both technical each of the project cities. As a result,
management practices through the and institutional requirements was a the SEPA and public works bureau
adoption of proper landfill major component of the project. Both personnel who have participated to
containment. Proper containment is a technical hardware and an extensive date will provide an indigenous source
prerequisite for efficient recovery of training program were provided to the of knowledge to help other cities in
methane, which produces economic appropriate personnel in each city who China in developing similar projects.
benefits from using or selling the would be responsible for implementing This experience by Chinese engineers
recovered methane as fuel. the energy recovery projects. should provide substantive assistance in
overcoming the communication and
The objectives of the project were to: The initial project schedule was four institutional problems that have been
● Establish demonstration plants to years and the funding was to cover encountered in implementing the
capture methane from landfills and use feasibility studies, training of Chinese demonstration projects. In that case,
it as fuel or to generate electricity technicians and purchase of equipment the value invested in these demonstra-
● Create a training facility for landfill for constructing energy recovery tion projects will have been realized.
operators, energy service companies, systems at three selected demonstration
municipalities, and other businesses on
building and operating landfill gas
Project type: Technical assistance
energy plants Locations: 3 cities – Nanjing, Anshan and Maanshan
● Set up institutional arrangements to Driver: State Environmental Protection Agency (SEPA) of the Peoples’
operate landfill gas recovery technology Republic of China
and produce and sell gas and electricity Organizations: State Environmental Protection Agency of the Peoples’
Republic of China (SEPA), United Nations Department of
at each site
Economic and Social Affairs (UNDESA)
● Demonstrate approaches to establish Cost: US$19.5 million
the price of electricity generated and Funding: Global Environment Facility Allocation: US$5,285,000; Co-
lower the cost of future plants to make financing (Chinese cities): US$14.28 million
landfill-gas electricity financially viable Training: 60 technicians and supervisory personnel trained

19
 RMC Readymix India associated with longer standing ready mixed concrete is due to be
exposure to rigid systems and adopted in late 2002. Furthermore, the
In late 1994 RMC Group determined hierarchies. An important first step was company is actively encouraging other
that it should selectively expand to ensure all new employees under- ready mixed concrete companies to
beyond its operations in Europe and the stood the values, goals and standards of form a trade association to promote
USA into developing economies that the new business. The company technical standards for the
would provide future growth targeted fresh graduates from development of the material and where
opportunities. One selected country Engineering Institutions with little or no appropriate, act as a lobbying tool with
was India, where the Group set up a experience. The selected candidates local, state and national government
joint venture company, RMC Readymix undertook an intensive training bodies.
India, with a local business partner. program which gave them a clear idea
The company’s objective for all overseas about: the concrete industry; the RMC Readymix India’s first plant was
processes and procedures commissioned in May 1997 and the
required to achieve company currently operates four ready
International Standards; the mixed concrete plants in Mumbai, Navi
ways and methods for the Mumbai, Chennai, and in Bangalore.
industry to go forward; the An additional plant is under
setting up of new units; and construction in Mumbai. During the
operational and technical last 18 months the company has also
aspects. This was also followed acquired aggregate plants in Chennai
for middle management and and Bangalore, and is currently
at an operational level. developing a Greenfield quarry in Navi
RMC’s global standards for Mumbai. There are now no expatriates
health and safety, environ- amongst the 180 employees and one of
ment and operational the company’s first recruits has been
procedures were introduced appointed Chief Executive.
from the outset. The company
also designed a lecture series, Over the past 5 years, a small number
specifically targeted as a of global plant and equipment
capacity building exercise for suppliers, who also recognize the
India. This brought together a potential of the Indian market, have
number of technical experts to established joint ventures with a view
promote good concrete and to manufacturing in India. RMC
construction practices. Readymix India has been proactive in
operations is, wherever possible to encouraging this development, as well
maximize the proportion of local labour In addition, the company has been as working with indigenous suppliers
employed. However, while India enjoys working with the Bureau of Indian to improve the quality and service of
a well-educated and plentiful pool of Standards to develop new industry their products.
human capital, when RMC entered the standards during the past five years.
market there was effectively very little As a result, a new Indian Standard for
expertise in India in what was, and still
is, an embryo industry. The company
Project type: Joint venture cement business
therefore commenced its operations Drivers: Selective expansion outside of Europe and the USA
with an expatriate General Manager Training: RMC’s global standards for health and safety, environment
and Technical Manager, but sought to and operational procedures; RMC Group site exchanges; dis-
tance learning programs
recruit Indian nationals and to develop
Standards: Developed new Industry Standard with Bureau of Indian
their capabilities over time. Standards
Status: First plant was commissioned in May 1997. In total, four ready
RMC Readymix India also targeted mixed concrete plants, in Mumbai, Navi Mumbai, Chennai
and Bangalore
younger employees to overcome some
Annual Sales: 131,611m3 concrete; 152,294 tonnes of aggregates
of the negative behaviors often

20
 Key findings
& recommendations

This report provides an analysis of technology cooperation from the perspective of ten member companies of
the WBCSD. In each case, we have analyzed the company’s contribution to developing industrial capabilities,
and results, benefits, challenges and success factors have beeb identified.

While each project demonstrated its own series of specific challenges, there were a number of common
hurdles that emerge from the analysis of the ten cases.

In addition, several key success factors and recommendations have been identified from these projects. These
are directed to both the policy-maker and business audiences.

22
Challenges

Framework conditions national companies failing to comply Communication for project

with standards, corruption, inflexible planning
Engaging with different levels of labor rules, and political instability and
government civil disruption were also highlighted as Language and dialect differences were a
Varying levels of support from state, impediments. common stumbling block for project
national and local governments planning. Where translation was
presented challenges. Different levels of Attracting local firms/part- required, the high level of technical
government – municipal, state, and ners/participants terminology often hindered
federal - provided inconsistent feedback communications. Uneven quality of
and varying levels of support; the need Challenges also emerged where a proj- translation and interpretations
to renegotiate on a regional basis was ect or joint venture proposal involved presented additional challenges given
time consuming. A lack of support from new technologies unfamiliar to the importance of common under-
local governments hindered progress potential business partners. Finding standings by all parties involved in the
for several projects. local partners and project participants projects.
with values and goals aligned with the
Hierarchical structures and procedural investing company proved difficult, Differing business styles
formality especially when seeking partners and/or
The institutional requirements of some project participants with a long-term Different cultures often have a differing
host governments often caused perspective and a high level of style of conducting business. At times,
considerable delays in information commitment. The difficulty in attracting this presented a challenge to project
exchanges and held up project investors - especially smaller firms or participants and made it necessary that
schedules. Rigid hierarchical structures individuals - in new unfamiliar time be devoted to developing better
in government bureaucracies often businesses was also highlighted. understandings of these different
made it necessary for a large number of business cultures. Inter alia, this
individuals to review documents, for Infrastructure included the influence of societal
instance. Further, complex form filling structures on hiring practices,
processes for gaining licenses and In the less developed regions in adherence to quality standards, the
approvals often delayed project particular, weak infrastructure presented role of women in business activities,
implementation. many hurdles to progress. This included and the varying decision making styles.
transport difficulties where roads were
Land acquisition poor or even non-existent, particularly Quality of local supplies
Acquiring and leasing land was chal- for the delivery of heavy and bulky
lenging in some countries. This includ- construction materials. This was also a The quality of local suppliers was in
ed difficulties in gaining clean title to problem when the geographic spread some instances inadequate. Where local
land, as well as the extensive procedural of technology recipients was broad. In suppliers were unable to meet required
requirements that consumed consider- these instances, both the delivery of standards it was necessary to source
able time in pre-implementation phases. hardware, information and training was outside the region or country, thereby
a challenge. Other aspects, such as the restricting efforts to maximize local
In addition to the aforementioned availability of electricity and telecommu- content and reduce costs.
framework conditions, constantly nication facilities, also hindered planning
changing tax rules, protectionism of and implementation of projects.

23
 Human resources Training facilities
In instances where training activities
Where businesses sought to minimize sought to target people in remote
expatriate employees, a lack of an regions, distance from training facilities
adequately skilled workforce in the and logistical constraints to bringing
operating region presented a challenge. people together was problematic. In
Low education levels of potential the less developed regions, lack of basic
employees were a particular facilities such as electricity made
impediment to maximizing a local delivery of training material more
employee base. challenging where these had previously
relied on education videos, overhead
Education and Training projections or computer presentations.

Specific challenges were identified in Enthusiasm and commitment

relation to the education and training For some participants in education and
components of projects. These centered training activities it was a challenge to
predominantly on challenges in maintain high levels of commitment
communication such as language and enthusiasm. Those with lower levels
difficulties, education levels and the of education were more likely to
availability of facilities for communica- become frustrated and not attend
tion. Generating and maintaining training sessions, and for some
enthusiasm and commitment to participants it was vital to use a variety
capacity building programs was also of communication mediums to
highlighted. maintain interest and enthusiasm. In
some countries, it was an additional
Language challenge to encourage active
Different languages and dialects – participation from women, especially
official and unofficial – made the when training activities were far
delivery of training difficult. There was removed from normal activities and
a need to customize material, and where they were not used to taking on
sensitivity to local dialects over ‘official’ such roles. To address these challenges
languages was vital for acceptance of it was necessary to communicate the
training programs. benefits of participation and align this
with the objectives of the individual.
Education levels
As with sourcing new employees,
training and development was hindered
by the often low and/or inconsistent
levels of education. There was a
correlation between low levels of
education and lower levels of
enthusiasm for education and training
activities, which often made the
delivery of training more difficult. In
particular, where literacy rates were low
the provision of written training
material was not possible and new
approaches had to be designed.

24
Success factors

For the Technology This is a necessary first step that can lay For the Technology
Recipient: a foundation for technological Provider:
development and industrial growth.

The Enabling Environment Generating acceptance and

Financing Arrangements understanding
Government actions can transform the
conditions under which technology Governments can reduce the risk to Acceptance and understanding needed
cooperation takes place. Sound foreign investment from technology to be generated at the local ‘user’ level.
economic and regulatory frameworks, providers. This support can come from It was essential that the proposed
transparency and political stability can the technology recipient/host country technology have an anticipated future
make a country a more attractive governments as well as donor govern- benefit and contribution to improved
option for both public and private ments of other countries. livelihood. A fundamental first action for
sector technology transfer. A clear many projects was the provision of
policy framework for technology Government financing for development basic explanations, conveying the
transfer and cooperation, both for a must include provisions for industrial message of ‘why’ a technology should
technology donor and recipient or development. This includes, in be adopted. Efforts devoted to
user are necessary. particular, the necessary foundations for explaining the technology and its
industrial growth and capacity building. potential benefits enhanced the initial
National technology Such foundations may include acceptance of the technology as well as
priorities developing knowledge and skills in the presence of the implementing
planning and management, in contract organization(s). This also enhanced the
Technology and development needs, as negotiations and public procurement. effectiveness of subsequent capacity
exemplified by the cases in this study, Financing should also be directed at building efforts.
differ greatly in each country, and in technological foundations, such as

some instances between regions. electrification, that enable people to Where a technology is new to a region
Building industrial capabilities can develop small-scale industries. and community, be it technological
require technology cooperation that hardware or a new technique, the pro-
delivers state-of-the-art manufacturing This requires the creation of greater vision of basic information was of
technologies, but it may also require synergies between ODA and FDI in the particular importance for reducing
the delivery of more basic and some- context of fueling sustainable initial resistance and generating buy-in.
times small scale, regionally tailored development for developing countries. This is exemplified in the cases where
infrastructure technologies. Where a This includes identifying untapped the recipient community had never
region lacks basic electricity, water and opportunities for joint ODA/FDI, espe- paid for a service and had never
sanitation services for example, this cially in Less Developed Countries received electricity.
technology need must be met, before (LDCs), using ODA to build the

sustainable industries can be developed foundations for sustainable industrial Establishing clear benefits from the
and expected to grow. Funding and development, and developing innovate projects was vital for generating initial
support should be provided for projects uses for ODA that reduce the risk of acceptance and for maintaining
that can deliver basic facilities and fuel foreign investments in developing enthusiasm and commitment. Finding
the development and growth of micro- countries. project partners and engaging capacity
entrepreneurs and small-scale industry. building participants, for example,

25
 required the clear conveyance of lessons learned and documented in sensitivity was of course vital). The
economic benefits. In addition to other locations. Post project inclusion of children in capacity build-
providing knowledge and skills, it was assessments that could be analyzed ing activities was a positive contribution
essential to provide appropriate comparatively with pre-project where this was likely to contribute to an
incentives. assessments also proved to be useful for ongoing process of learning and
determining the impact of the project. positive change, and the sustainability
Assessment and adaptability The development of monitoring of the technology over time.
mechanisms also allowed for incremental
Pre-project assessment was a vital stage improvements to be made during the This type of stakeholder inclusion in
in all cases. This frequently included a implementation of the project. capacity building efforts differed greatly
formal feasibility study, but projects by type of project, but in some cases it
here clearly highlight the benefit of a Capacity building was vital to the projects success to cre-
detailed assessment of the people to be ate a sense of ownership to ensure
involved and their needs and All projects benefited from capacity sustainability of the technology
capabilities. It was also important to building activities. In fact some were transferred.
assess existing infrastructure to specifically focused solely on the
determine what was possible and how transfer of knowledge and skills, hence Adaptability to recipients
needs could best be met with the capacity building was the foundation of Education and training schemes were
technology. In some cases this required the technology cooperation. most successful when based on a
a detailed analysis of the needs and thorough understanding of the partici-
capacities of separate regions, Where a project involved the transfer of pants and tailored to this and specific
communities and even individuals. technological hardware – solar systems, local conditions. Where education levels
manufacturing equipment, entire were low, it was most effective to use a
The cases exemplified the necessity of a production facilities – capacity building variety of mediums to convey messages
detailed assessment for determining proved essential to the successful – both to maintain enthusiasm to
how the technology will be managed transfer and diffusion of this hardware. people not familiar with such programs,
once implemented. Some projects Specifically however, these projects as well as to overcome low education
required that technology management highlighted a number of key factors for and literacy levels.
models be based on institutional ensuring capacity building efforts are
capabilities, community capacities, and most effective. These included: the Local trainers
economic realities. This required extension of education and training to Developing capable local trainers
innovative payment schemes and novel other groups, such as community or contributed to success and
institutional structures. This was school groups, and the inclusion of sustainability. Where specialized skills
particularly so where a community had women and children; the need to adapt were made available locally, projects
not have paid for services before, or the method and delivery of education benefited from the language skills,
where they did not have experience in and training based on local conditions cultural understandings and local
managing the payment for services or and the knowledge and skill levels of acceptability of these individuals
the maintenance of hardware. the recipients of the training; and the delivering training. This also con-
Neighborhood associations, ad-hoc benefits of having a local base of trainers. tributed to local employment and
committees, and other forms of ensured that specialized trainers are
networks were successful organizing Broadly inclusive efforts available for future capacity building
structures utilized to enhance the Capacity building efforts were activities.
technology transfer. successful where the target audience
was broad and inclusive. Several pro- Dialogue and partnerships
Post-project assessment and monitoring grams extended to regular community
mechanisms involvement, targeted efforts to engage Local R&D institutions
Conducting post-project assessment women and children, and also school Local R&D institutions proved to be
and developing monitoring groups. This was particularly successful valuable partners. In particular
mechanisms contributed to both the in rural communities and in areas where universities and other research
success of the projects, as well as to the women were not previously included in institutions that possessed both local
ability to replicate them based on activities or the workforce (cultural knowledge and specialized capabilities,

26
made valuable contributions in the early
stages of projects. In addition these
institutions proved to be valuable
partners over time for conducting
ongoing research for technology
maintenance and improvements. They
are also well placed to review the
success and sustainability of technology
transfers.

Other stakeholders
Engaging other stakeholders enhanced
projects success. A joint effort with local
authorities and local organizations
provided access to local knowledge and
enhanced acceptability of projects.
Project planning was enhanced in many
instances by the inclusion of pre-project
stakeholder dialogues and the inclusion
of stakeholders in decision-making.

Communication and
interaction

Effective communication and personal

interaction were key emerging themes.
The frequency of interactions between
cooperating parties in the technology
transfers was identified as a contributor
For all involved parties: intergovernmental organizations
to success. This was particularly true strengthens the adaptation, diffusion
when there was a high degree of and sustainable use of new
Cooperation and
personal, face-to-face interaction. technologies.
commitment
Maintaining progress required, in many
cases, frequent communications and Technology cooperation requires all A commitment from all involved parties
regular follow- ups, in all phases of the cooperating parties to gain from the was vital for successful implementation
projects. Language differences required cooperation. Building partnerships and sustainability. This was clearly
either multi-lingual participants and/or between those who have the demonstrated in the study for all types
highly effective translators, as common technology and those who need it is of technology transfer. The
understandings are vital. likely to be more effective when both sustainability of new ventures, the
parties have a vested interest in the acceptability and adoption of new
Learning works both ways success of the project and its continu- techniques and the endurance of
ing operation. partnerships required commitment to a
Exploitation of projects as learning relationship that was mutually beneficial
opportunities was highlighted as a Technology cooperation can be for all parties.
contributing success factor to future enhanced via business-to-business
projects. Each technology transfer partnerships. Such cooperation is
project is different and requires local thought to be most successful in a
sensitivity and adaptation, however key commercial setting that involves
learnings from each project were noted beneficial cooperation between two
as enhancing the organizations ability companies. In addition, cooperation
to replicate the technology transfer with research institutions, local and
successfully in other locations. national governments, NGO’s and

27
 Appendix - Bibliography
● UNCSD (1998), Technology Cooperation and Assessment; Sixth Session Background Paper No. 12

● WBCSD (1998), Technology cooperation for sustainable development: Position Brief.

● WBCSD (2002), Improving synergy flows between ODA and FDI to developing countries: A business perspective; OECD
round table on sustainable development; Paris: OECD.

● Schmidheiny, BCSD, (1991) ‘Changing Course: A global business perspective on development and the environment’, MIT
Press: London, U.K and Cambridge, U.S.

● IPCC, (2001), Methodological and technological issues in technology transfer: Summary for Policy Makers. A special report
of Working Group III of the Intergovernmental Panel on Climate Change.

● UNDP, (2001) ‘Human Development Report 2001: making new technologies work for human development’, Oxford
University Press: New York.

● IMF (2002) The role of capacity building in poverty reduction. IMF Issues Brief. Available at
www.imf.org/external/np/exr/ib/2002/031402.htm

● IMF (2001), International Capital Markets: Developments, Prospects, and Key Policy Issues.

● UNIDO (1996), ‘Manual on Technology Transfer’. General Studies Series, UNIDO:Vienna.

● ICC/WBCSD, (1998), ‘Technology cooperation and assessment’, ICC/WBCSD Background document, UNCSD: 1998.
Available at www.iccwbo.org/home/statements_rules/statements/1988/final_technology.asp

28
 about WBCSD
The World Business Council for Sustainable Development (WBCSD) is a coalition of 160 international companies united by a
shared commitment to sustainable development via the three pillars of economic growth, ecological balance and social progress.
Our members are drawn from more than 30 countries and 20 major industrial sectors. We also benefit from a Global Network of
35 national and regional business councils and partner organizations involving some 1000 business leaders globally.

Our mission
To provide business leadership as a catalyst for change toward sustainable development, and to promote the role of eco-
efficiency, innovation and corporate social responsibility.

Our aims
Our objectives and strategic directions, based on this dedication, include:

Business leadership – to be the leading business advocate on issues connected with sustainable development.

Policy development – to participate in policy development in order to create a framework that allows business to contribute
effectively to sustainable development.

Best practice – to demonstrate business progress in environmental and resource management and corporate social responsibility
and to share leading-edge practices among our members.

Global outreach – to contribute to a sustainable future for developing nations and nations in transition.

30
about UNIDO
The United Nations Industrial Development Organization (UNIDO) was established in 1966 and became a specialized United
Nations agency in 1985. Its work and activities are dedicated to promoting, in cooperation with its 169 Member States,
sustainable industrial development in countries with developing and transition economies.

Mission

UNIDO helps these developing countries and countries with economies in transition in their fight against marginalization in
today’s globalized world. It mobilizes knowledge, skills, information and technology to promote productive employment, a com-
petitive economy and a sound environment. Carlos Magariños, the Director-General of UNIDO, describes the Organization as a
specialized United Nations agency that focuses its efforts on relieving poverty by fostering productivity growth.

Services

UNIDO’s services are designed to be easily integrated into country-specific packages and local ownership ensures a custom-made
approach. Services provided by UNIDO cover the following areas:

- Investment and technology promotion

- Industrial governance and statistics
- Quality and productivity
- Small business development
- Environmental management
- Industrial energy and Kyoto Protocol (Climate Change)
- Montreal Protocol (Reduction and elimination of ozone-depleting substances)
- Agro-industries

Copyright UNIDO and World Business Council for Sustainable Development 2002
All rights reserved

31
Printed in Austria
V.02-56318–July 2002–1,000

UNITED NATIONS WORLD BUSINESS COUNCIL FOR

INDUSTRIAL DEVELOPMENT ORGANIZATION SUSTAINABLE DEVELOPMENT
Industrial Promotion and Technology Branch 4, Chemin de Conches
Vienna International Centre CH-1231, Conches-Geneva
P.O. Box 300, A-1400 Vienna, Austria Switzerland
Telephone: (+43 1) 26026-3239 Telephone: (+41 22) 8393100 / 8393147
Fax: (+43 1) 26026-6805 Fax: (+41 22) 8393131
E-mail: [email protected] E-mail: [email protected]
Internet: http://www.unido.org Internet: http://www.wbcsd.org