The Vicious Cycle Preventing Know How Transfer to Developing Markets

According to Hans Verhulst, a consultant at the Centre for Promotion of Imports from Developing Countries (CBI) in The Netherlands, there is a vast pool of know how waiting to be untapped in technology rich countries. While in emerging markets, there is an enormous demand for know how, waiting to be filled:

"Trade in technology" could well be one of the answers to a changing
world. But we need to improve the matching process for this trade i.e. through
licensing. When it comes to transfer of know how and trade secrets which are
hardly “patentable� –as is the case with most industrial know how- both parties,
licensor and licensee alike, still seem to be reluctant to cross bridges. . . .

Transfer of know how and trade secrets is not restricted to “technical� know how. Know how in each of the value adding activities -- production, marketing, logistics and support -- is also fit for transfer. Unfortunately, the licensing instrument [in these areas is also] underutilized by SMEs. For the most part, this is because licensors are afraid of uncertainties about the protection of their intellectual property, including trade secrets. On the other hand, licensees are reluctant to accept the often severe restrictions that come with license agreements. These in turn are the result of licensors being overcautious to protect their interests. The vicious circle is completed.