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Models Methods Concepts and Applications of The An... - (9 Technological Choice in Less Developed Countries)
Models Methods Concepts and Applications of The An... - (9 Technological Choice in Less Developed Countries)
9.1 Introduction
T. L. Saaty and L. G. Vargas, Models, Methods, Concepts & Applications of the Analytic 115
Hierarchy Process, International Series in Operations Research & Management Science 175,
DOI: 10.1007/978-1-4614-3597-6_9, Ó Springer Science+Business Media New York 2012
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
116 9 Technological Choice in Less Developed Countries
In dealing with the problem of technology transfer, the AHP can be applied at
several levels. At a global level, one might be interested in predicting, in general
terms, the future course of technology transfers to the LDCs. A hierarchical rep-
resentation of this problem is depicted in Fig. 9.1. At the first level of the hier-
archy, we list the following actors who might be expected to play a role in
determining the future course of technology transfers: the governments of the
developed nations, the governments of the LDCs, ‘‘neutral’’ third parties such as
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
9.2 Applications to Technology Transfer 117
the many United Nations organizations involved in technology transfer issues, the
USSR and Eastern bloc nations, multinational corporations, the private sector as
represented by big and small businesses, and labor unions. Each actor pursues a set
Copyright © 2014. Springer. All rights reserved.
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
118 9 Technological Choice in Less Developed Countries
policies could result in indefinite extension of the status quo, or the continued
impasse regarding technology transfer issues could deflect the LDCs toward pol-
icies of self-reliance and regional cooperation, thereby reducing the flow of
technology from the advanced to the less developed countries.
To estimate the likelihood of the three scenarios, we first make a pairwise
comparison of the relative influence of the different actors, which yields a set of
weights for this factor. Next the objectives of each actor are compared in pairwise
fashion in terms of their importance to the concerned actor. We pose questions
such as: ‘‘How important is objective O1 relative to objectives O2, O3, and so on,
for actor A1?’’ Having prioritized the objectives of each actor in this way, we
apply the weights of actor influence to these objectives to obtain a set of weighted
objectives. The process is continued by comparing the scenarios with respect to
their relative contribution to the achievement of each objective and by weighting
the scenario priorities by the weighted objectives. This results in an index of the
overall likelihood or importance of each scenario.
For the purpose of illustration, we have limited the hierarchy to only three
levels. The richness of the hierarchy can be extended as necessary by adding more
levels and more elements within each level. For instance, a level of actor policies
could be interposed between the objectives and scenarios, which might relate to
taxation, imports and exports, degree of encouragement given to foreign owner-
ship of capital, preferential treatments accorded to countries as sources of supply
of goods and technologies, and so on.
Let us now see how this approach can be used to enable planners of an LDC to
make technological choices. A survey of the literature suggests that the following
criteria are paramount in technology transfer:
1. Need: Technology has to be tailored to the needs of the country. Need can be
defined in terms of suitability and urgency. A technology might be considered
suitable if it is proven to meet similar needs in other contexts. Needs will be
influenced by overall national sectoral priorities.
2. Adaptability: It must be possible to adapt the technology to the local envi-
ronment. Two considerations determining adaptability are the ability and the
willingness to adapt. The lack of a sufficient science and technology base in
terms of the availability of skilled manpower, maintenance facilities, materials
Copyright © 2014. Springer. All rights reserved.
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
9.2 Applications to Technology Transfer 119
technology may at a later date leave the LDC without adequate support. Thus a
careful tradeoff has to be made as to the nature of the technology to acquire.
4. No undesirable second-order consequences: If the LDCs have any advantage as
late comers in the process of technological development, it is the opportunity to
profit from the lessons learned by the advanced countries as to the negative
effects of certain types of technology. Impact analysis must be an integral part
of any attempt to evaluate technologies for importation.
In general the needs for technology are influenced by sectoral priorities. Also,
each of the preliminary assessment criteria listed above will be emphasized dif-
ferently in the various economic sectors. For example, adaptability might be
stressed in agriculture, which is a more traditional sector than manufacturing in
most LDCs, whereas obsolescence risk might be underscored in manufacturing
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(see [11]).
Sectoral priorities may be taken as ‘‘given’’ if they are based on planning
exercises done outside the context of technology assessment, a likely situation in
many LDCs. However, the sectoral priorities themselves can be hierarchically
determined. Two approaches are possible: a forward approach that starts with a
level of national objectives and works down toward the desired sectoral priorities,
and a backward approach that begins with constraints in both the internal and
external environment of the LDC and converges on the feasible sectoral priorities,
given the constraints (see [2]). Figure 9.2 illustrates the backward approach.
Returning to the problem of technology assessment (Fig. 9.3), we then have
sector priorities at level 1, assessment criteria at level 2, and candidate
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
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120 9 Technological Choice in Less Developed Countries
In this example, which illustrates the approach described above, the sectoral prior-
ities are taken as given and assumed to have been determined exogenously. In the
context of a particular LDC, let us say the following are the sector priority weights:*
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
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9.3 An Example: Technology Transfer Using the AHP 121
Agriculture 0.25
Mining and extractive industries 0.08
Health 0.12
Industry 0.15
Education and training 0.12
Communications 0.15
Transportation and distribution 0.06
Research and development 0.07
As already discussed, the assessment criteria do not play the same role in all the
sectors. They are prioritized within each sector in pairwise comparison matrices:
9.3.1.1 Agriculture
This matrix emphasizes that in the agricultural sector, the prime consideration for
introducing an imported technology is adaptability. Risk of obsolescence and undesirable
second-order consequences play relatively less important roles. These judgments, of
course, are those of a particular analyst who provided the pairwise ratings shown in the
matrix. Typically the entries of the matrix would be obtained after considerable debate and
ultimate convergence by consensus among the members concerned.
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N A R S Weight
N 1 3 3 1 0.395
A 1/3 1 1 1/3 0.132
R 1/3 1 1 1 0.173
S 1 3 1 1 0.300
C.I. = 0.052
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
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122 9 Technological Choice in Less Developed Countries
In the mining sector, in contrast to agriculture, need for the particular tech-
nology is felt to be the dominant criterion. ‘‘No undesirable second-order conse-
quences’’ ranks second. Adaptability and risk of obsolescence are relatively less
important, presumably owing to the state of development of this sector in the
particular LDC.
9.3.1.3 Health
N A R S Weight
N 1 1 3 7 0.402
A 1 1 3 7 0.402
R 1/3 1/3 1 3 0.143
S 1/7 1/7 1/3 1 0.057
C.I. = 0.002
The health needs of LDCs are widely different from those of the more advanced
nations. Hence need and adaptability dominate here.
9.3.1.4 Industry
N A R S Weights
N 1 1/3 1 1/3 0.132
A 3 1 3 1 0.395
R 1 1/3 1 1 0.173
S 3 1 1 1 0.300
C.I. = 0.050
N A R S Weight
N 1 5 9 3 0.587
A 1/5 1 5 1 0.172
R 1/9 1/5 1 1/5 0.044
S 1/3 1 5 1 0.196
C.I. = 0.033
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
9.3 An Example: Technology Transfer Using the AHP 123
The need for the particular type of educational technology is important, but
education that raises levels of aspiration can be dysfunctional if there are no
simultaneous increases in available opportunities. Hence a high score is obtained
on undesirable consequences of rapid education.
9.3.1.6 Communications
N A R S Weight
N 1 5 1/5 1 0.169
A 1/5 1 1/7 1 0.047
R 5 7 1 5 0.615
S 1 1 1/5 1 0.169
C.I. = 0.070
N A R S Weight
N 1 1/3 1/5 1 0.096
A 3 1 1/3 3 0.249
R 5 3 1 5 0.558
S 1 1/3 1/5 1 0.096
C.I. = 0.020
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N A R S Weight
N 1 5 1 3 0.397
A 1/5 1 1/5 1 0.090
R 1 5 1 3 0.397
S 1/3 1 1/3 1 0.116
C.I. = 0.010
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
124 9 Technological Choice in Less Developed Countries
Now these sector-based criteria weights are adjusted by the sector priorities to
get the overall criteria weights for the particular LDC:*
Need 0.302
Ease of adaptability 0.314
No risk of obsolescence 0.230
No undesirable second-order consequences 0.154
9.3.2.1 Need
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In the opinion of the analyst who provided the judgments in this matrix, rural
education (a long-term, low-risk project) and oil exploration (a short-to-medium
term, high-risk project) are the major national needs. Flood control and solar
energy are believed to be the next most important technologies from the point of
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
9.3 An Example: Technology Transfer Using the AHP 125
view of addressing national needs most directly. The consistency index of 0.18 is
rather high, even for a 7 9 7 judgment matrix. To some extent this happens
because of the broad types of comparison involved. In real life, one would be more
specific by clustering technologies so that they are more comparable.
Next, with respect to ease of adaptability, the relative standing of the candidate
technologies is as follows:
The weights obtained for each technology under each criterion are then
weighted by the criteria weights and summed to get the overall technology
weights:
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
126 9 Technological Choice in Less Developed Countries
The overall weighted priorities suggest that solar energy should receive max-
imum emphasis, followed by satellite television, flood control, oil exploration,
nuclear energy, computerized information bank, and coal gasification, in that
order. The high weight for solar energy is principally due to the high weight it
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
9.3 An Example: Technology Transfer Using the AHP 127
obtains with respect to ease of adaptability to a rural economy and the absence of
any conceivable second-order consequences associated with this technology.
Despite the high need for satellite television for rural education, it is perceived
by the analyst to be a potentially dysfunctional technology in the sense of dis-
tracting the masses rather than really educating them. Similarly the high need score
for oil exploration is counterbalanced by problems in adapting the technology to
local situations, obsolescence risk, and possible second-order consequences like
pollution of the coastal area. Nuclear energy gains on account of its relatively easy
adaptability and the fact that the technology is a rather stable one less prone to
obsolescence.
It is clear from this example that the AHP permits quantification of the relative
priorities of various technological options. The rankings obtained here reflect the
values, opinions, and judgments of a particular rater. But if the prioritization is
done in a group setting, then debate can be generated and judgments made on the
basis of consensus. The purpose of the example is to illustrate the application of
the AHP rather than to suggest any particular prioritization of technologies for any
particular LDC.
After the potentially most useful or desirable technologies are identified on the
basis of the four key criteria, conventional approaches such as cost/benefit analysis
can then be used to select from among the candidate technologies.
Figure 9.4 suggests a cost/benefit approach using the AHP. We construct
separate cost and benefit hierarchies and use the final cost and benefit weights to
derive cost/benefit ratios for the technologies under consideration. Thus we obtain
an ordering of the technologies in terms of their cost/benefit ratios.
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Bibliography
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Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.
128 9 Technological Choice in Less Developed Countries
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Quart J Econ 80:190–207
Copyright © 2014. Springer. All rights reserved.
Saaty, Thomas L., and Luis G. Vargas. Models, Methods, Concepts and Applications of the Analytic Hierarchy Process,
Springer, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/odu/detail.action?docID=971912.
Created from odu on 2018-10-02 14:23:45.