World Developmmr, Vol. 18, No. 1. pp. 91-107. 1990 0305-750X/90 S3.00 + 0.00 Printed in Great Britain 0 1990 Pergamon Press plc Overcoming Technological Dependency: The Case of Electric Arc (Jamaica) Ltd., A Small Firm in a Small Developing Country NORMAN P. GIRVAN Consortium Graduate School of Social Sciences, University of the West Indies, Jamaica and GILLIAN MARCELLE* British Telecom, London 1. INTRODUCTION It is axiomatic that technical progress is a major contributor to the economic growth of nations. Developing countries with scarce in- digenous technological capabilities must of ne- cessity resort to importing technology as a prin- cipal means of incorporating technical change into their productive structure. Over the past 20 years, considerable research has been under- taken on the costs, effectiveness, limitations, and approprtateness of technology transfer to de- veloping countries. One aspect of the research findings is that contractual arrangements for technology transfer are frequently circumscribed by various restrictive clauses aimed at preserving the suppliers’ technological monopoly, which have the effect of inhibiting the recipients’ effective assimilation. adaptation and generation of technology. These findings have been corrobo- rated in the case of the Caribbean by examina- tion of the terms of technology agreements in Guyana. Trinidad and Jamaica in the 1970s (Odle. 1979; Odle and Arthur. 1985). and Trini- dad in the 1980s (McGuire and Joseph, 1985). One limitation of this type of research is that other, noncontractual, methods of accessing technology used by local enterprises are not evaluated. By focusing on contractual transfer, which tends to reflect the imperfect nature of technology markets and the superior bargaining power of suppliers. a partial and unrepresenta- tive picture of the total technology transfer situation of the country may be created. Even where a formal contract is found, its terms may not be an accurate or adequate reflection of the actual technological behavior of suppliers and recipients. In addition, examination of a written agreement does not capture the nuances of the ongoing business relationships between the two parties, or their motivations - especially the motivations of the recipient enterprises in enter- ing into agreements considered unfavorable from the broader social or national point of view. Partly to compensate for such limitations. another stream of research has utilized the case study method. By examining the technological behavior and performance of a single enterprise over a period of time, researchers have been able to gain valuable insights into the processes of technological learning, in-plant technical change, successful bargaining strategies, and the motiva- tions and strategies of management (Maxwell. 1977; Dahlman, 1978; Hoffman. 1986). A further *The authors wish to thank Mr. George Swire. Mr. Cyril Bartley. and Mr. Cohn Stewart of Electric Arc (Jamaica) Ltd. for their unstinting cooperation in making this studv possihle. The research for this article was carried out in 1986 and 1987. Initial observations on the significance of the Elarc experience were made in Girvan (1986). Subsequently. a multidisciplinary team carried out preliminary research on Elarc‘s production operations during the Workshop on Strat- egies for Technology Transfer and Development in the Caribbean. organized by the Institute of Social and Economic Research at the University of the West Indies in September 1986; as reported in Marcelle er ni. (1986). Follow-up research and interviews were carried out by the authors in October 1986 and August 1987. The research material was also used for Marcelle (1987). 91