MNC-PROPELLED GROWTH AND THE DEVELOPMENT OF INDIGENOUS TECHNOLOGICAL CAPABILITY

Abstract

This study, based on the collaboration of MNCs with the local institutions and enterprises, examines the contributions of MNCs to the development of indigenous technological capability in Singapore. While technological capability can be measured in terms of overall R&D spending and other science and technology output indicators, as what previous studies do, this study discounts the foreign contribution to the development of technological development in order to assess the indigenous technological capability in Singapore. The study presents a comprehensive concept of technological capability to examine capability at the firm and the national level. As growth, to a large extent, has been MNC-propelled, the contribution of MNCs to the development of indigenous technological capability cannot be undermined. This is supported by findings which show that many MNCs have localised their R&D activities and through their foreign direct investment, have resulted in substantial inflow of technology from abroad. This study thus provides evidence that Singapore is still a net recipient of technology from abroad. In order to discount the foreign contribution of technology development, a breakdown of the local versus foreign share of R&D spending and manpower is presented. On top of this, output of science and technology contributed by the locals are singled out and highlighted. The results shows that local contributions to technology development in terms of R&D spending is small relative to foreign contributions. This does not put the local in good stead for future technological advancement. However, the case studies on an aggregate level indicates two important results. Firstly, there is some technology transfer from the local to the MNCs. Secondly, the MNCs play a stimulating role in the enhancement of indigenous technological capabilities. The findings suggests that Singapore does have some indigenous technological capabilities and that MNCs has had and will have a role in bringing Singapore to greater heights.