Dan Kavishe:
Presentation on Tanzania Technology and related Policies for the SME Sector

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Presentation on Tanzania Technology and related Policies for the SME Sector
Dan Kavishe

Science and technology and related infrastructure

(a) Brief overview

The Tanzania Commission for Science and Technology (COSTECH) is the national coordinating body on matters pertaining to science and technology (S&T). The Commission's mandate includes, among other functions, planning, monitoring and coordinating the activities relating to the scientific research and technology development of all persons or institutions concerned with such activities. COSTECH is also supposed to allocate and supervise the use of funds in all public R & D institutions. Unfortunately the Commission has not been able to carry out the above mentioned functions due to various reasons.

(b) Industrial R & D network focus.

In general, Tanzania has performed fairly well in as far as the setting up of various scientific research and technology development institutions is concerned. However, research and development (R&D) activities in Tanzania are carried out mainly by public institutions and universities which are under direct responsibility of respective sectoral Government ministries as specified in respective Acts of Parliament. Each R & D institution is answerable to its respective parent ministry for purposes of funding and decision making. Such institutions are found in various sectors such as industry, agriculture, energy, mining and water resources. However, the links that exist among R & D

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institutions are seemingly weak. Where these links do exist they are usually adhoc in nature, normally driven by necessity and often dictated by prevailing circumstances rather than strategic and deliberate planning. Moreover, there is hardly basic scientific research being carried out by these institutions except for the academic departments of the universities. In fact, most of the industrial R &D institutions in Tanzania are technology development oriented.

The success of the industrial sector will in future depend largely upon the degree to which the country can develop, consolidate and strengthen the basic scientific research and technology development activities. This will help to accelerate the speed for industrialisation and therefore increase its capability to solve basic industrial problems without relying heavily on technical assistance from outside.

The industrial scientific research and technology development activities to be emphasised can be categorised into six main areas, among others: -

1. Training of various levels of technicians, artisans and technologists required in industries.
2. Establishing technical infrastructure for scientific and technological research services and setting standards and quality control of industrial products.
3. Creating a base for technical know-how for industrial consultancy as well as for engineering and manufacturing design in the metals and engineering sub-sector.
4. Laying down procedures to control and regulate the transfer of technology from abroad to ensure that the fees paid for those services are for the benefit of the nation.
5. Establishing patents and licensing acquisition procedures.
6. Establishing agricultural mechanisation activities and the use of appropriate rural technology to improve the quality of rural life.

It is quite obvious that, strengthening the different capabilities in those areas requires time. Hence Tanzania will need somehow longer time to prepare its manpower for various skills, prepare its training

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institutions and help them acquire the necessary techniques applicable in different stages at the international level. In this respect, for some time to come, the main target will be to improve and strengthen the scientific and technological institutions, which have been established. So far the objective of providing scientific research and industrial technology services to industries as stipulated in the BIS plan (1975 - 1995) has been implemented by the establishment of various R & D institutions, such as Tanzania Industrial Research and Development Organisation (TIRDO); Tanzania Engineering and Manufacturing Design Organisation (TEMDO); Tanzania Bureau of Standards (TBS); Tanzania Industrial Studies and Consulting Organisation (TISCO); Centre for Agricultural Mechanisation and Rural Technology (CARMATEC); Institute of Production Innovations (IPI) etc. Although the R&D institutional support system has been partly established, its impact is yet to be significantly felt in industry.

(c) Patents and trademarks:

Patents, trademarks and various licenses are used in technology development. Such development depends on the existing policy, the patent law and the possession of industrial licenses. In Tanzania, the patent law was formulated in 1930 (Cap. 217 of the Tanganyika Laws) which does not give much incentive to the local experts to develop new industrial innovative ideas. Recently, a new patent law as endorsed by the Parliament (Act. No. 1 of 1987) which is expected to give a challenge and the needed motivation to scientists and technologists in their efforts of developing industrial technologies. The implementation of such a law has not been effected because of various reasons including lack of basic tools and scarcity of experts to implement the patents task.

(d) Linkages between R&D institutions and the productive sector

Industry in Tanzania is at an embryonic stage of development with hardly any research activities being carried out within the industries. The technologies that are being used in the country at the moment have been imported from abroad.

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The majority of the local industries (public or private) use turnkey plants and process machinery imported from abroad for specific production lines. Such plants have therefore very little room for product and/or process modification. Consequently none of the industrial enterprises have R&D departments in their premises for product design, development or modification. The above, if need arises, is usually done in liaison with an R&D department in the foreign country where the technology being used originated from. There is therefore a very weak link between R&D institutions and the productive sector in the country. This is mainly due to the fact that the industrialists do not appreciate the role of R&D activities and on the part of the R&D institutions, their R&D activities do not address the productive sector's needs.

(e) Common bottlenecks

R&D institutions have experienced the following common problems:

1. Inadequate and inappropriate infrastructure like laboratories, workshops, libraries which should be adequately equipped with facilities and tools (like laboratory equipment, workshop machinery, chemicals, computers, reference books, scientific and engineering journals, audio-visual equipment, etc.) for carrying out research and development work effectively.
2. Lack of adequate, competent and well-trained high level manpower such as scientists, engineers, technologists, technicians etc.
3. Inadequate funding, both local and foreign.

Regarding the sources of financing, so far there is not a deliberate and explicit policy on how to fund R&D activities in the country, except for the 1985 National Science and Technology (S&T) which stipulates that the Government should spend up to 3.5% of GDP for R&D by the year 2000. This figure has now been reviewed to 1% of GDP in the 1993 new version of the S&T Policy. As such, financial input into R&D has remained very low for many years because most of the R&D institutions rely entirely on the meagre Government subvention for their budges.

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Most industries, both public and private do not carry out any meaningful R&D work. Tanzania is yet to see multinational corporations (MNCs) establish business in the country through the Investment Promotion Centre. One should however be sceptical about trans-national enterprises establishing meaningful R&D activities in developing countries like Tanzania since history has shown their lack of interest in such ventures.

(f) Measures:

To enable science and technology play their leading role, the Government will carry out a comprehensive review of the position in this area and ensure that all R&D institutions are rationalised, synchronised and consolidated by providing adequate financial, expertise, support incentives and other necessary infrastructural facilities.

Technology acquisition and transfer

SIDO is involved in technology development through improvement of locally available technologies as well as acquisition of technology from abroad which suites Tanzania's environment. The Sister Industry Programme and the Sister Daughter Programme are typical examples of SIDO involvement in technology acquisition and transfer.

Through donor countries, the government of Tanzania had arranged technology transfer programmes in assistance to small scale industries to accept technological transfer to Tanzania SSI to meet a targeted and specific needs of entrepreneurial know-how, aiming at development of SSI sector.

A technology transfer arrangement was initiated in 1977 when the Government of Tanzania and India agreed on SSI development in Tanzania, under the Indo-Tanzania programme whereby the loan of US$ 4 million or 20 million IN was granted to buy machines (from

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India) and train staff in India. The programme officially started in 1978 by importation of 48 projects. Others were:

• The Sister Industry Programme:
  This was funded by Swedish Government as grant to Tanzanian Government aiming at matching local entrepreneurs firms in Sweden to transfer industrial technology to Tanzanian entrepreneurs.
• The Sister Daughters Programme:
  This is a result of the outcome of growth of local SSI firms which gained experience under SIP to be passed on to local firms.
• The Triangular Cooperation:
  Also was funded by Swedish Government (donor country) for buying technology from the southern new industrialised countries to Tanzania. The imported technology was bought from the Philippines, India and Malaysia.
• Projects established through Technology Transfer:
  Under Indo-Tanzania Programme Projects established include sugar cane, fruit canning oil processing, engineering works, carpentry, paper printing and handlooms. For SIP, SDP and TCP projects established include, fruit canning, charcoal brequestes, leather goods, metal engineering, milk processing and palm oil extraction. The programme of technology transfer under SIP, SDP and TCP succeed in entrepreneurs' development and at the moment 32 firms have been established, 8 are under SIP, 8 under SDP and 16 under Triangular Cooperation. Various products for export and domestic market produced which include forging cutlery, electrical fittings, scissors, electric motors and zinc ash.
  
  Problems of Technology Transfer Scheme:
  Projects established under these programmes are in operation for more than 15 years now. Although it helped Tanzanians to acquire new skills and entrepreneurs development still the programme was not developed as fast as it was expected, due to various problems during and after establishment, which include:

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1. Foreign dependence:
   Industries established were foreign dependent and based, as a result required more foreign exchange for importation of raw materials and spare parts. In early 1980's when foreign exchange was scarce most of them suffered, hence failed to import spare parts and raw materials.
2. More inward-looking:
   Projects established were import-substitution and more in-ward looking. Mainly concentrating on local market without initiating to secure export market. At the beginning few succeeded to export to Sweden through special order arrangement.
3. Lack of Commitment:
   Some entrepreneurs were not fully committed to their firms in both management and project development. This was because most entrepreneurs were advised to take the project, they were not initiators so they lacked seriousness.
4. High Capital Intensity:
   SIP and SDP were capital intensive and foreign dependent on both raw materials and spare parts. In this case it employed few workers at urban centres where the projects were based.
5. Indo-Tanzania Programme was not successful:
   Projects were owned by District Development Corporations (DDC's) and few corporative groups with limited entrepreneurial skills. In 1989 out of 48, 21 projects only were in operation, and it was estimated that the whole programme employed about 350 persons. Also the programme itself has been based on incomplete deliveries of machinery, breakdowns, lack of spares and inadequate training to the owners. Therefore the programme caused problems to entrepreneurship development in addition to poor choice of technology from the beginning.