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  • i

    University of Tsukuba

    Graduate School of Humanities and Social Sciences

    Master Thesis Submitted in Partial Fulfillment of the Requirements to be

    Awarded the Degree of

    Master of Arts in International Public Policy

    International Technology Transfers and the Role of Governments:

    A Study on Japanese Official Development Assistance to the Railway Sector

    in India

    by

    Radhakrishnan DINAKAR

    (Masters Program in International Public Policy)

    January, 2011

  • ii

    Table of Contents

    Abstract ... i

    Acknowledgements ..ii

    List of Tables & Figures ....iii

    List of Abbreviations .. ..iv

    CHAPTER I: INTRODUCTION .. 1

    1.1 Technology Transfer ..2

    1.2 Acquisition of Foreign Technology Past & Present ............3

    1.3 Development Assistance and Technology Transfer ....4

    1.4 Theoretical Framework .. 6

    1.5 Statement of the Problem, Research Question & Hypothesis .. 8

    1.6 Methodology ...............9

    CHAPTER II: THEORITICAL & ANALYTICAL FRAMEWORK 12

    2.1 Introduction.........12

    2.2 Dependency Theory, Path Dependence and ODA ...14

    2.3 Analytical Framework ...........17

    CHAPTER III: LITERATURE REVIEW: TECHNOLOGY TRANSFER AND THE

    ROLE OF GOVERNMENTS ..19

    3.1 Role of Governments in Nurturing Science, Technology & Innovation

    .. ..19

    3.1.1 Japan: Role of Government in Technology Transfer...............

    23

    3.1.2 India: Role of Government in Technology Transfer ...

    .27

    3.2 Role of Multilateral and Bilateral ODA ...30

    3.3 Literature Gap ... .....31

    CHAPTER IV: RAILWAYS AND PATH DEPENDENCY

  • iii

    4.1 Transportation and Development 33

    4.2 Railways in India: Introduction & Development .....33

    4.3 Railways in Japan: Introduction & Development .37

    4.4 Path Dependency and Railways 39

    CHAPTER V: COMPARATIVE ANALYSIS: ODA vs. PRIVATE LICENCING

    5.1 Technology Transfer Through ODA

    5.1.1 Case 1: The World Bank ODA & Japans Shinkansen Project ..42

    5.1.1.1 Background..43

    5.1.1.2 Conception of the Shinkansen Project46

    5.1.1.3 ODA: Terms & Conditions.......47

    5.1.1.4 Project Implementation & Technology Transfer.....50

    5.1.1.5 Project Impact............55

    5.1.1.6 Summary ............58

    5.1.1 Case 2: JBIC/JICA ODA and Delhi Metro Project in India..59

    5.1.1.1 Background......................59

    5.1.1.2 Conception of Delhi Metro .59

    5.1.1.3 ODA: Terms & Conditions .. .63

    5.1.1.4 Project Implementation & Technology Transfer .64

    5.1.1.5 Project Impact ..73

    5.1.1.6 Summary ...76

    5.1.2 Case Comparison: Technology Transfer in ODA for Public Sector

    Projects ................76

    5.2 Technology Transfer through Private Licensing

    5.2.1 Case 3: Private Licensing in Japan Hiroshima LRT and Siemens.79

    5.2.1.1 Background .. 79

    5.2.1.2 Licensing Agreement .83

    5.2.1.3 Project Implementation & Technology Adaptation .84

    5.2.1.4 Impact .88

    5.2.1.5 Summary ..........89

  • iv

    5.2.2 Case 4: Private Licensing in India Integral Coach Factory (India)

    and SWS (Switzerland) 90

    5.2.2.1 Background .. 90

    5.2.2.2 Technology Licensing Agreement 91

    5.2.2.3 Project Implementation & Technology Adaptation ..93

    5.2.2.4 Impact 96

    5.2.2.5 Summary ... 97

    5.2.3 Case Comparison: Technology Transfer through Private Licensing.98

    5.3 Summary .99

    CHAPTER VI: CONCLUSION 101

    BIBLIOGRAPHY 105

    Annex I ......114

    Annex II .115

    Annex III ...116

  • v

    Abstract

    International Technology Transfers and the Role of Governments:

    A Study on Japanese Official Development Assistance to the Railway Sector

    in India

    Radhakrishnan DINAKAR

    There exists a strong correlation between the material prosperity & global

    competitiveness of any country and its ability to master science &

    technology. Countries that lack the ability to acquire it tend to be poor and

    underdeveloped while those that are able to adapt, innovate and create new

    technologies, are able to produce competitive goods and services. However,

    less than 1% of global research and development is currently spent on

    technological innovations for poor countries. United Nations and other

    donor agencies are therefore increasingly using concepts like Knowledge

    Aid and Technological Learning, to address a host of development issues.

    This research examines the role of governments and Official Development

    Assistance (ODA) in the transfer of technology to developing countries.

    Using the framework of dependency theory and path dependency, it

    compares four cases of technology transfer in a public utility service -

    Railways - in Japan and India. Of the four cases, two involve the use of

    ODA: the World Bank loan for the Shinkansen project in Japan (1960-64)

    and the Delhi Metro Project in India using JBIC/JICA loans (1998-2008). In

    the remaining two cases we compare technology transfer in railways using

    private licensing agreements between of Hiroshima LRT & Siemens

    (Germany) and Indias Integral Coach Factory & SWS (Switzerland). The

    conclusion is that the effectiveness of ODA in technology transfer depends to

    a large extent on how recipient governments encourage indigenous research

    & development institutions, as well as competition & collaboration amongst

    domestic engineering firms.

  • vi

    Acknowledgements

    I would like to express my sincere gratitude to my advisory committee at the

    University of Tsukuba - this research would not have been possible without

    their sustained guidance and encouragement.

    First of all, my main advisor, Prof. H. Klienschmidt, for his inspiring

    breadth of knowledge and the clarity with which he explained everything

    from international relations to the rigors of academic writing; To Prof. S.

    Kitta for his emphasis on practical knowledge and for sharing his

    experiences in managing ODA projects in India, East Asia and other parts of

    the world; To Prof. A-J. Louis, for setting high expectations and for his

    detailed, critical feedback, and to Prof. L. Pan, whose lectures on modern

    Japanese history led me to take a closer look at the role of technology

    transfer in the transformation of nations.

    It is the JJ/WBGSP scholarship that enabled me to study again, and I am

    grateful to all those who considered me worthy of this mid-career program.

    It has afforded me the opportunity to introspect, as well as the time &

    environment to learn with an amazing cohort, faculty and staff-members,

    drawn from all across the world.

    My greatest debt is to my family especially my wife, Maya, who set aside

    her own career to be with me here, to manage the household and to put up

    with my erratic schedules. I dedicate this research to her, and to our

    children, Diya and Divyang.

  • vii

    List of Tables & Figures

    Table 3.1 Role of NIE Governments in Facilitating Technology Transfer 22

    Table 3.2 Japan: Role of Government in Promoting Domestic Science &

    Technology (1880-1950)

    25

    Table 5.1 Aid from USA During the Post-war Period (1945-1953 in

    US$ million)

    44

    Table 5.2 Description of Loan No. P-246 New Tokaido Railway Line 47

    Table 5.3 Railway Technology & its Source for the Shinkansen Project 51

    Table 5.4 Summary of Innovative Technology Introduced in the Shinkansen

    Project

    52

    Table 5.5 Description of JBIC Loan for Delhi Mass Rapid Transport System 61

    Table 5.6 JBIC/JICA Funding Plan Delhi Metro Phase-I and Phase-II 62

    Table 5.7 Railway Technology & its Sources for the Delhi Metro Project 65

    Table 5.8 Summary of New Technology Introduced in the Delhi Metro

    Project

    66

    Table 5.9 Overview of Delhi Metro Project - Phase I & II 67

    Table 5.10 Leading LRT Tram Manufacturers 79

    Table 5.11 Summary of car-designs used by HERC (1985-present) 82

    Table 5.12 Comparison of Siemens Combinos and JTrams GreenMover Max 83

    Table 5.13 Components of the IR-SWS Technology Transfer Agreement 88

    Figure 1 Original Alignment of WB-funded Shinkansen Line 49

    Figure 2 Shinkansen 0 Series, launched in 1964 51

    Figure 3 Shinkansen Poster at World Bank, Tokyo Office 57

    Figure 4 Delhi Metro A Train Set in Operation 60

    Figure 5 Layout of Delhi Metro Routes in Phase-I and Phase-II 62

    Figure 6 Evolution of Rail Streetcars in Hiroshima (1925-1991) 81

    Figure 7 A Siemens Combino at Hiroshima 84

    Figure 8 GreenMover Max by J-Tram 86

  • viii

    List of Abbreviations

    AC Alternating Current

    DAC Development Assistance Committee (of OECD)

    DC Direct Current

    FDI Foreign Direct Investment

    GBP Great Britain Pounds

    HERC Hiroshima Electric Railway Company Limited

    h.p Horse Power

    IR Indian Railways

    JBIC Japan Bank for International Cooperation

    JICA Japan International Cooperation Agency

    JNR Japan National Railways

    JR Japan Railways

    kV Kilo Volt (1000 Volts)

    KFW Kreditanstalt fr Wiederaufbau (Germany)

    LDC Less Developed Country

    ODA Official Development Assistance