Technology Transfer Issues in Environmental Goods and Services:
An Illustrative Analysis of Sectors Relevant to Air-pollution and Renewable Energy,
ICTSD Issue paper by Lynn Mytelka

These were the firms and countries that proved better able to adjust as technology and competitive practices began to change. Four of these changes were of particular importance:

• The growing knowledge-intensity of production, not only in the so-called “high tech”
industries, but across a wide spectrum of “traditional sectors”;
• The emergence of innovation-based competition and its widespread diffusion through the
process of trade and market liberalisation;
• The adoption of new global trade, intellectual property and investment rules that involved
market opening; and
• Growing concern for the environment and its embodiment in international agreements.

These changes not only created new possibilities for wealth creation and sustainable development, but also new requirements for learning and technological mastery without which it has been difficult for most developing countries to enter export markets and sustain export growth.

The ability of developing countries to integrate into the new trading system, thus, increasingly depends upon a conceptualisation of ToT as a process that contributes to learning, domestic capacity building and innovation. Although this conceptualisation of the ToT process has been integrated into strategy documents and policies in many developed and developing countries, it has not been mainstreamed into WTO negotiations more generally and is notably absent from the mandate for negotiations on EGS, a sector in which goods and the tacit knowledge required for their design and operation, often embodied in services, are closely linked.

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