CC BY
102
UDC 339.727.22
S. A. Kasperovich, E. A. Derbinskaya
DIRECT FOREIGN INVESTMENTS AND INTERNATIONAL TECHNOLOGY TRANSFER AS ECONOMIC
GROWTH FACTORS
Keywords: international technology transfer, innovation, economic growth, domestic market, foreign market, direct foreign investment.
The paper makes evaluation of internal and external factors of economic growth in the Republic of Belarus, including the labour, natural-resources, innovation and industrial potentials, capacity of the domestic and foreign markets of products, institutional environment condition, scope and structure of foreign investments, a degree of the country's participation in the international division of labour. It defines the effect of direct foreign investments and international technology transfer on the dynamics and quality of economic growth in the Republic of Belarus.
В работе дана оценка внутренних и внешних факторов экономического роста в Республике Беларусь, включая трудовой, природно-ресурсный, инновационный и производственный потенциалы, емкость внутреннего и внешнего рынков продукции, состояние институциональной среды, объем и структуру иностранных инвестиций, степень участия страны в международном разделении труда. Определено влияние прямых иностранных инвестиций и международного трансфера технологий на динамику и качество экономического роста в Республике Беларусь.
Ключевые слова: международный трансфер технологий, инновации, экономический рост, внутренний рынок, внешний рынок,
прямые иностранные инвестиции.
Introduction
The economic growth is one of major objectives of the Government's macroeconomic policy. At that a sustainable and intensive growth is not only a precondition for improving a standard of living, but also a factor of efficient integration of the country in the world economic system. It is also a key factor of improving the efficiency of using all types of resources, a source of appearing new resources and technologies. In their turn the economic growth's rates and quality are subject to the effect by a variety of factors the assessment of which makes it possible to not only predict its dynamics, but also define major directions of the Government's economic policy.
In the present-day conditions major internal factors effecting the economic growth in the Republic of Belarus are demographic ones, including the labour, natural-resources, innovation and industrial potentials, capacity of the domestic and foreign markets of products, institutional environment condition, scope and structure of foreign investments.
Among the external factors a material effect on the economic growth is taken by a level of participation in the international division of labour, as well as by political relations.
The assessment of the above factors made it possible to appraise the existing problems which keep down the economic growth in the Republic of Belarus.
The main body
Currently one of major problems in the sphere of demographic modernization of Belarus is excess of mortality over natality. Despite the fact that starting from 2003 one can observe a positive dynamics of natality in 2013 the rate of mortality and natality was 12,2 and 13,4 PM respectively [1]. Beyond the point one can observe a growth of social load due to a reduced number of able-bodied population and increased one of retiring age persons. During several recent years
labour migration is characterized by a growth and excess of the number of immigrants over emigrants.
The natural-resources potential of the Republic of Belarus is characterized by the availability of material forest and water resources, heavy stock of potash and mineral salts, iron and non-ferrous metal ore, cement raw material, magnesian lime, chalk stone, building and facing stone, clays for producing coarse ceramics and lightweight aggregates, silica and building sands, sand-and-gravel and other clay materials. However, Belarus depends heavily on oil and gas supplies, first of all on Russia.
The major factors characterizing the capacity of the domestic and foreign markets, as well as the country's foreign economic potential are the volumes of exports and imports and a value of a balance of foreign trade. For recent five years the volume of exports materially increased, but nevertheless the balance remains to be negative.
The up-to-date development of the world economy is characterized by the fact that the economic growth dynamics, the countries' competitive power level, decree of securing their national safety became to largely determine the achievements in the field of science and technology, as well as the conditions for accessing the financial capital.
There take place the technological progress acceleration, reduction of the life cycle of products and services and particularly the periods for conducting investigations and developments and implementing innovations. In the developed countries in the economy structure and in economic research and developments one can note manifest shifts to innovatively active and dynamically changing branches which are characterized by a short life cycle of products and a reduced share of those whose life cycle is longer.
The technological progress and innovations are considered to be major growth factors. A great number of empirical research for the developed countries proves
close relations between a long-term economic growth and such factors as the human capital, knowledge and innovations. Thus, in it is shown that one can note close correlation between expenditures connected with innovations and GDP growth, proving the increase in the results of the national economy functioning by 0,050,15% at each one-per cent growth of expenditures connected with scientific research [2].
Obsolete technologies, a high level of moral and physical depreciation of facilities, high fuel and energy intensive technologies employed- all these lead to Belarus lagging behind in respect to the technical and technological level of economy development as compared to the developed countries.
In its turn the scientific work in the country which is a major precondition of the economy innovative development is characterized by a quite low share of expenditures connected with scientific research paid from the national budget (not exceeding 1-2 per cent), as well as by insignificant private finance. This leads to extremely slow upgrading the science material and technical foundation and as a consequence to a low volume of manufacturing high-technology products and to a low intensity of GDP.
Despite generally positive dynamics of such efficiency factor of scientific and technical activities as the number of patent applications supplied from 2008 to 2010 (growth in the number of applications from 1730 to 1933), in 2011 and 2012 their number reduced and remains to be equal to 1871 applications [3]. One should also note a ratio distortion in the age categories of research workers.The number of research workers aged from 30 to 39 was gradually reducing and of those aged 60 and older was increasing and this leads to a reduced efficiency of the Belarusian science.
In general in the Republic of Belarus a favourable innovation and investment climate has been gradually generating. In particular, in the Doing business -2014 joint research prepared by the World Bank and International Financial Corporation (IFC) Belarus was 63 among 189 countries in respect to the total index of ease of doing business (in 2013 it was 58). It should be noted that the investment climate improves further investments to the country's economy and it will promote expanding international cooperation, accelerating efforts on incorporating joint ventures and foreign companies, holding and leasing companies, regional financial and industrial groups.
Major problems in the innovation activity of Belarus are:
- obsolete material and technical foundation of
science;
-an imperfect intellectual property management system and a system of training higher qualification scientific personnel for knowledge-intensive branches;
- poor participation of small and medium businesses in the innovation process;
- slow rates of generating independent scientific and technical corporate structures directed to solving interbranch technological problems and creating high-technology knowledge-intensive products.
The solution of the above problems will promote the development of science, scientific and technical and innovation activities, improving the level of the real economy sector competitive ability, increasing the volume of exports of products, services and technologies and this in its turn will lead to creating an efficient Belarusian model of the national innovation system, which will procure a wide spread of knowledge and high rates of the scientific and technical progress.
Due to the government financing limitation for science development one of the sources for raising funds for its development are foreign investments which play an important role in the economy of any country since they promote accelerating the economic and scientific and technical progress, updating and upgrading the production process, activating competition, developing small and medium businesses, training personnel meeting the requirements of the market economy, expanding the country's export potential, creating new jobs, improving the occupational level, removing social tension, improving domestic production competitive ability, solving problems of economy restructuring.
A majority of countries step up efforts to raise direct foreign investments with a view to support a growth of their economies and, therefore, introduce relevant amendments in the existing law in respect to raising thereof towards their liberalization.
For the recent years the volume of the raised direct foreign investments increased in all groups of countries: in the developed, developing countries and in the ones with transition economies, including Belarus. The countries with the developing economy and those with transition ones raise a half of the world volumes of direct investments a major share of which are directed to implementing new projects.
As the practice suggests, the raised direct foreign investments laid the foundation of the development and creation of progressive technologies in the developed countries. Bearing in mind considerable technical and technological lag behind of the Belarusian economy and science an inflow of direct foreign investments will promote the employment of sophisticated foreign technologies, creation of new Belarusian technologies, engineering and management techniques and, therefore, the production of qualitative high-technology products.
In the meantime such inflow of direct foreign investments may lead to displacement of the national capital from profitable branches and, therefore, to lop development of the country and menace to its economic security. Import of capital is frequently related to introduction of goods and technologies into the market of a recipient country whose life cycle has expired, as well as those discontinued the line due to their poor quality [4].
The volume of direct foreign investments in the Republic of Belarus has been gradually increased. Thus, for a period of 2010-2013 years it grew from USD 9904,2 to 11083,4 mln. In 2013 major foreign investors in the Republic of Belarus were economic operators of Russia (48,6% of all investments received ), United Kingdom (21,4%), Cyprus (7,1%), the Netherlands (4,9%), Austria (3,4%). The largest sums of foreign investments were received by sales agencies (34,8%), transportation organizations (28,6%), industrial bodies
(23,4%). Such statistical data are indicative of low investment activity to scientific work and of a necessity to upgrade the mechanisms of raising direct foreign investments in this sphere.
The creation in Belarus new technologies and developments necessitates upgrading systems of their transfer from the sphere of their creation to that of their application. Along with this the technology transfer should not be limited only by the scientific or engineering fields, the notion of transferred technologies should include knowledge in the field of production, marketing, management, since just they become a way for achieving competitive edge in the market, first string determining a success of an economic operator. Knowledge is becoming a commodity of commerce, it is in greater demand as compared to material values and services. The technology transfer becomes one of the most important sources of revenues and profits for both separate economic operators and the system in general, and at that both owing to the substance of the process itself -commercialization, and by means of generating a new-order infrastructure [4]. The return on the technology transfer may be gained out of: commercial agreements related to operation of the technologies; completing research on bringing the technologies up to a level of their market application; selling licenses entitling third parties to employ the technologies; incorporating by vendors «start-up» companies or joint ventures with strategic partners for manufacturing products/rendering services while employing such developed technologies.
In the present-day conditions of globalization the international technology transfer forms the basis of an economic growth of economy of any state. The role of a phenomenon of the technology transfer consists, inter alia, in its contribution to incorporating a first technopolis - Silicon Valley (USA, California), where on the basis of the Standford University its greduates and students have incorporated small innovation companies which afterwards grew into such world business colossuses as Hewlett-Packard Co, Intel, Apple Inc. [5].
Irrespective of its type the technology transfer promotes developments commissioning, drawing income by its authors, as well as increasing tax budget revenues.
The following technologies are key factors and preconditions of efficient transfer:
- intellectual property protection;
- managing conflict of interests of transfer participants;
- marketing investigations;
- developing commercial offers;
- selling process management.
Quite urgent objectives of the development of the technology transfer systems are generating communication channels for advancing innovations from vendors to consumers, as well as developing a methodology for presentation of information on a technology for a
potential license grantor or investor in a form and content attractive for them [6].
At the same time there exist a number of problems and contradictions in the developing the international technology transfer. In particular investments are generally delivered into those spheres and developments which return greatest profits. This may lead to disproportions between spheres of production and branches. Also problems there may be arisen problems related to the fact that «new» technologies may turn to be obsolete for their recipients. Moreover, the technologies transferred typically require updating and adapting to local conditions.
The disbalance of the international market of technologies also promotes the situation when material advantages are existing in the countries which have available significant free resources for supporting the development processes. It should be noted that the international trading in technologies as a mechanism of influencing the world integration process rate from the part of certain states is widely used for political purposes.
Conclusion
The conducted investigations demonstrate that direct foreign investments are a quite important factor of economic growth for transition countries. While making up the deficit of domestic savings such investments by their nature assume incorporating new enterprises or fundamental restrycturing and expanding the existing companies and so in a greatest degree promoting economic growth. In practice they most often are represented as contributions in stock of export-oriented enterprises and this also makes certain profits for recipient countries due to increasing their foreign currency returns. Such direct foreign investments are also important as a source of new technologies. In so doing while selecting directions and transfer techniques one should be based on the analysis of a technology itself, future strategy of cooperation with its designers, investment opportunities and on technical abilities of enterprises for implementing thereof.
Literature References
1. Национальный статистический комитет Республики Беларусь [Электронный ресурс]. Режим доступа: http://belstat.gov.by. Дата доступа: 12. 03.2014
2. European Innovation Scoreboard 2002: Technical Paper No 4 «Indicators and Definitions» / European Commission, Enterprise Directorate-General. L-2985 Luxemburg. November 25.
3. О состоянии и перспективах развития науки в Республике Беларусь по итогам 2012 г.: аналитический доклад / под ред. И. В. Войтова, В. Г. Гусакова. Минск: ГУ «БелИСА», 2013 г. 216 с.
4. E.V. Koroleva, L. I. Shmigova, Vestnik BSU, 1, 3, 76-80 (2010).
5. V. V. Kalinin, M. L. Kalteshova, Innovatsii, 1, 7, 32-37 (2003).
6. D. B. Shulgin, Nauka i Innovatsii, 1, 12, 63-66 (2008).
© S. A. Kasperovich - vice-rector for academic affairs, PhD Economics, BSTU, sergeak@mail.ru; E. A. Derbinskaya - assistant lecturer, BSTU, kate@belstu.by.
© С. А. Касперович - д-р экон. наук, проректор Белорусского госуд. технол. ун-та, sergeak@mail.ru; Е. А. Дербинская - ст. препод. того же вуза, kate@belstu.by.
