1481 



three specific kinds — the technology of production, the technology of finance 

 and accounting, and the technology of marketing.^" 



A colloquium sponsored by the National Science Foundation, 

 November 17, 1973, explored the policy aspects of this development. 

 One paper, by Keith Pavitt, a senior research fellow in the Science 

 Policy Research Unit, University of Sussex, offered the following 

 commentary : 



Nonetheless, warnings about trends in the present system have been made, and 

 one of the most pertinent to this discussion is by Steven Hymer. He argues 

 that "... [multinational corporations] . . . will be able to speed up the spread 

 of technology and to organize activities now impossible. They are a large step 

 forward but this is not the same thing as saying that they serve the general 

 interest as well as their own, that they are the best way to exploit the possibilities 

 of modern science, or that they do not create certain highly intractable problems 

 which greatly impede their efficiency." * On the one hand, imprbved communica- 

 tions break down barriers to trade arid widen choices facing buyers. On the other 

 hand, direct foreign investment reduces the alternatives facing buyers and leads 

 to bigness and fewness: "Direct foreign investment thus has a dual nature. It is 

 an instrument which allows business firms to transfer capital, technology and 

 organizational skill from one country to another. It is also an instrument for 

 restraining competition between firms of different nations." In particular, direct 

 foreign investment can stifle the emergence of indigenous entrepreneurs, and of an 

 indigenous decisionmaking capability in science and technology. This is par- 

 ticularly important in the poor countries which do not have the technical and 

 organizational bargaining power to purchase the most appropriate technology on 

 good terms. As a consequence, Hymer foresees a world where . . . "Income, 

 status, authority and consumption patterns will radiate out from the centers in a 

 declining fashion and the hinterland will be denied independence and equality." 

 He concludes that there are ". . . two main directions in which one can proceed. 

 Multinational corporations integrate one firm over many countries. The alterna- 

 tive is to integrate many industries over one country and to develop non-corporate 

 linkages between countries for the free flow of goods and, more important, the 

 free flow of information." 



*S. Hymer, "The Efficiency (Contradictions) of Multinational Corporations," 

 American Economic Association, Papers and Proceedings, 1970, pp. 441-448.^** 



A report by the U.N. Secretary General in late 1974 described the 

 activities of U.N. agencies related to the "transnational" corporation, 

 with respect to the impact of this form of institution on development 

 and on international relations generally. He revealed that U.N. studies 

 had been made of such impacts as: 



— Restrictive business practices and international investment; 



— Sovereignty over natural resources; 



— International flow of capital ; 



— Direct private foreign investment; 



— Economic effects on developingcountries ; 



— Transfer of technology to developing countries ; 



— Transfer pricing and tax evasion ; 



— Legal questions of international trade law; 



— Regional effects; 



— Labor relations, training, and social policies; and 



— Regulation and supervision requirements. 

 The report concluded that 



The complexity and breadth of the issues involved are such that a continuing 

 and co-ordinated analysis of the problem is essential for the further elucidation 



2« Richard Barnet and Ronald MuUer, "A Reporter at Large: Global Reach-II," The New Yorker, 

 December 9, 1974. p. 100. 



2" National Science Foundation, The Effects of International Technology Transfers on U.S. Economy, 

 papers and proceedinRs of a colloquium held in Washington, D.C., November 17, 1973 (Washington, D.C.: 

 U.S. Government Printing Office, July 1974), p. 72. 



