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Some may see technology transfer as an industry acquiring scientific know-how from a research laboratory. But for most people, the term conjures up a vision of some poor developing country gratefully receiving an advanced technology from abroad. 

There's a problem with this picture, however. For the world's rural and urban poor, including some 700 million people in India, technologies transferred in this way rarely have the potential to provide the goods and services they actually need. The problems and material needs of the poor are entirely different from those of the rich. A product that makes sense in the North American or Japanese market may be entirely irrelevant to — or even against the interests of — consumers in a low-income country.  

Similarly, the realities of production in developed and developing countries will be completely different. Labour is cheap in a developing country and capital is scarce, while the opposite is true in an industrialized one. This means that a "copy-cat" production process brought in from a totally different economic context may be disastrous for the economy that imports it, if it is unchanged and unadapted.

Equally bad are the technologies that have had an unacceptable impact on the environment in industrialized countries, yet still find their way to developing countries without any redesign. This unfortunate situation persists because there are no financial incentives in market-led economies to adapt such products and processes.

Transferring trouble

So, while the 3 billion people living on less than $2 a day have obvious needs — a regular and nutritious supply of food, clean water, safe and inexpensive housing, sanitation, affordable transportation and sustainable energy — they may instead receive a vast array of packaged snacks, a choice of two brands of cola, any amount of unaffordable cement and steel, designer soaps and shampoos, luxury cars, and industrial and transportation solutions that require large amounts of imported fossil fuels. 

And while it is known that one of the key ways of reducing poverty is to create large numbers of jobs and livelihoods through the establishment of small, decentralised enterprises, this is almost always subverted by the large-scale, highly automated, labour-saving technologies that are the only ones available on the international market. 

If developing countries are to find the solutions that are right for them, they will unquestionably have to do it themselves. The concept of technology transfer is meaningful in the South only if it is either from Southern laboratories or adapted by such laboratories. In essence, it needs to be technology development, not transfer.

Technologies for making products and services in demand by the better-off consumer in developing countries can largely be left to corporate research laboratories because they can build the costs of R&D into the pricing of their products and pass these costs on to those customers that can afford to pay. But this will not lead to technologies or products needed by the poor, or for societal needs where the profits are not sufficient to attract private-sector players.

For these markets, a whole new approach is needed. Until recently, this has been the monopoly of publicly funded and government-run research institutions. But now more and more players, including NGOs and social enterprises, are entering the field.


One of these organisations is Development Alternatives, where I work. This social enterprise has been developing technologies aimed at improving the lives of the world's poorest for the past 20 years. The task we have set ourselves is to help fulfill the social objectives of equitable development and environmental conservation — the means to empower our fellow citizens — in a way that delivers the goods and services they need on a large scale and in a sustainable manner.

In India, we need to create 15 million new jobs every year if we are to meet the Millennium Development Goals (MDGs) set out by the United Nations. At current rates of growth in employment, it will take us more than a century to meet the targets. I believe the approach we at Development Alternatives have adopted has the potential to reduce that time period drastically. 

The business of eradicating poverty

At Development Alternatives for example, we aim to create new technologies that can help people both escape from poverty and create new jobs. Each of our technological products is designed to enable its user to use as the basis for a business employing between four and 40 people.

Such products include a hand-operated press that converts mud into hard bricks for low-cost housing; a vertical kiln that bakes bricks made from ordinary clay; a machine for transforming industrial waste into cheap roofing tiles; a process for converting weeds into a substitute for diesel fuel; woodstoves that dramatically reduce fuel consumption and smoke; and hand-powered looms and paper-making machines made by modernizing centuries-old designs.

Problems with patents

One major obstacle that lies in the way of achieving the MDGs relates to our current systems for protecting "intellectual property", such as patents and copyrights. These have been highly successful in accelerating innovation, leading to new, useful products and services that can generate significant profits.  However, it is difficult to apply the concept of intellectual property to products fulfilling basic needs or intended for the public good, which offer few possibilities for profits to the private sector, but huge benefits to society as a whole. Economists have written tomes on the ways a market can fail, but this is one area that seems to be taboo.

Unfortunately, today's systems of finance rely on patents for attracting the capital needed to put an innovation to work. Venture capitalists and even banks often require a borrower to demonstrate that the product or process needing investment is protected to ensure that competitors will not be able to enter the market. This is a strange expectation on the part of those who otherwise extol the virtues of the free market at every chance they can get.

For more than two decades, we have avoided patenting our inventions, with the purpose of encouraging users instead to use our designs free of charge.  While we have sold significant numbers of our own technologies, so have other entrepreneurs — facilitating the growth of the market.  This has allowed us to help create thousands of new businesses, both in India, and sometimes in other, even poorer, developing countries.  We have been happy for people to do this as it opens up new markets for the products, and thus has both benefited people and created more jobs.

However, another 40 million job-seekers are expected to seek employment in India by 2010. One million of these are projected to take up jobs in information technology. The remaining 39 million will need to find work in more traditional industries as well as in agriculture, which employs some 70 per cent of India's workforce, as well as in India's service industries.

If we really want to create enough jobs to meet the needs of these new workers, organizations such as ours need to raise substantial amounts of capital to expand the range of our products, inventions and services. To do this, we have had to engage with intellectual property, for example by franchising our services to users and obtaining royalties for our products.


The commercial wing of Development Alternatives, Technology and Action for Rural Advancement (TARA), was set up to manufacture and market our products and services. Any profits from TARA are fed back into Development Alternatives, and boost the work we do among the poor.


It is sad that not patenting our designs in the past has meant we have been unable to raise the capital needed to expand our products and services on a truly mass scale from investors who still believe that such protection is the only guarantee of getting returns from their investment. But given the public impact of our technologies — our low-cost construction bricks, for example, have benefited the inhabitants of thousands of villages and will transform the lives of millions more — it is clear that some other form of financing will have to be put in place as well.

The idea that a non-profit organization should adopt practices from business and commerce is still relatively new, not just among non-governmental organisations in India, but also among international donors. But it is vital to clarify that adopting a practice from business is not the same as becoming one. The difference between a social enterprise and a conventional one is that all profits from social enterprises help to support the organization's aims, instead of being distributed among shareholders.

Ashok Khosla is founder and President of Development Alternatives in New Delhi (


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