Technology and Knowledge Transfer in China

Review by Jeffrey Barlow <barlowj@pacificu.edu>

Li-hua, Richard. Technology and Knowledge Transfer in China. Aldershot, England: Ashgate Publishing LTD., 2004.

Richard Li-hua, the author of this work, is at the Newcastle Business School at the University of Northumbria in the United Kingdom. In addition to this work, he has published a number of works in China, dealing with construction management and contract management on international projects. He is trained in business and works broadly in the social sciences as well. He is Chinese, now resident in the U. K., and has significant teaching and business experience in China.

The author, then, brings a great deal of expertise to Technology and Knowledge Transfer in China. He makes a number of very important points, but the material is delivered in an extremely dry prose, as though an engineer had written it under a pressing deadline.

Nonetheless, the book gives the reader many useful conclusions from which one can generalize well beyond the ostensible focus of the work, the construction industry. While the work does not mention the electronics industry, the Internet or such topics as outsourcing of jobs, its conclusions are immediately transferable and the work should be read by those with particular concern for these topics, particularly if they are directly involved in projects in China.

The focus of the book was a relatively simple one: it is a study of knowledge transfer on a number of projects done in China involving foreign firms. “Technology transfer” is defined by the United Nations as: “…transfer of systematic knowledge for the manufacture of a product or provision of service…” The question the author asks is what are the obstacles to knowledge or technology transfer, and what might be considered the ideal conditions for it?

These questions are, of course, of particular interest to Chinese firms themselves, but also to the foreign partner who usually hopes to locate increasingly large elements of the operation in China itself rather than trying to run it from abroad.

As might be imagined, the topic of knowledge transfer is not easily studied. Dr. Li-hua’s methodology is carefully explained and the study itself is architectural in its approach. Throughout, the reader is aware of not only the underlying bibliography and methodology, but the conclusions emerge quite seamlessly from a great deal of statistical data drawn from specific projects undertaken in China.

Our one complaint is that the human dimension, the importance of which Dr. Li-hua certainly points up, is almost totally lacking from the work. The many individuals working on these projects are reduced to their statistical importance, and we never meet a single human being among the hundreds if not thousands who were engaged in the cases so thoroughly studied.

But this is a minor complaint, and the positive side of the author’s approach is that the book, if dry, is brief. It can be read quickly and the lessons easily teased from the mountains of data.

Important conclusions include the following:

Technology and knowledge transfer occurs most readily if there is a relatively narrow gap in terms of economic development between the two partners. This implies that the larger gains will be made in the latter stages of the process, and not at the outset when two firms, or two countries, are likely to be most distant from each other.
Technology or knowledge transfer is one of the major motivations for China itself engaging in joint or international projects. The foreign partner, however, for its part, usually hopes to utilize local technologies to reduce its costs or otherwise generate profits. (p. 29)
These motivations lead the Chinese firms to undertake a fairly well developed path of growth, which may ultimately make them competitors in the markets earlier occupied by the foreign partner. (p. 34)
The author makes a very useful distinction between explicit knowledge, such as knowledge of specific information or production practices---which can be readily transferred---and tacit knowledge, which depends largely on direct human contact (“intimate human interactions”) and shared experience. Unfortunately for those wishing to rapidly transfer or learn technology, the latter is far the more important of the two forms of knowledge (pp. 49-50).

The author lays out in a very useful form both the obstacles to transfer of knowledge and suggested ways of dealing with the problems in a relatively brief section in Chapter 5 “Theory and Practice of Knowledge Transfer”. This material should be of interest to anyone engaged in group projects, whether local or cross-cultural.

In an attempt to make this work useful to a broader range of our own readers we have emphasized in this review some of its broader conclusions. But it is the details of joint construction projects that will be of use to those directly engaged in such work or contemplating opening production ventures in China. The author studied a number of projects, including very large ones such as a World Bank financed project dealing with the construction of dams on the Yellow River. This project involved as many as 750 foreign workers and managers and Chinese crews of 170,000. (Chapter 6)

Dr. Richard Li-hua’s work, Technology and Knowledge Transfer in China, is not easy reading. But it richly repays the effort required to mine it for its useful generalizations. And if you want a better understanding of the managerial problems encountered in outsourcing, the work would be very useful.

Technology and Knowledge Transfer in China

October 2005

Volume 5, Issue 6

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