Technology Transfer? The Rise of China and India in Green Technology Sectors

Abstract

International technology transfer is central to the debate about how to curb the carbon emissions from rapid economic growth in China and India. But given China and India’s great progress in building innovation capabilities and green industries, how relevant is technology transfer for these countries? This paper seeks insights from three green technology sectors in both countries: wind power, solar energy and electric and hybrid vehicles. We find that conventional technology transfer mechanisms such as foreign direct investments and licensing were important for industry formation and take-off. However, as these sectors are catching up, new ‘unconventional transfer mechanisms’ such as R&D partnerships and acquisition of foreign firms have become increasingly important. We argue that there is limited practical and analytical mileage left in the conventional approach to technology transfer in these sectors in China and India. We argue that the emphasis should shift from transfer of mitigation technology to international collaboration and local innovation.