1.  Multi-National Joint Venture:  Host Government and Int'l Corporation 
          
  		2.  Wholly-Owned Recipient:  In-Country Entity, 100% Local Control           

  		3.  Entrepreneurship: Small Businessmen Cooperating with Foreign Company     

 		4. Technical Cooperation Package: Assistance from Foreign Governments or Entities     

  		5. Consortium: Temporary Construction Contracts In Host Country             

  		6. Alliance Model: On-Going Collaboration among Host & Foreign Companies

All of the paradigmatic concepts associated with each of models depicted on Figure I are applicable to most of the world’s developing nations. When applying them to Mexico, there are perhaps some differences brought about by the types of transfer vehicles that are generally preferred by firms in the United States, the most influential of Mexico’s economic partners.

The consortium approach, for example, would involve a temporary American presence in Mexico and the hand-over of managerial control at some point in the medium term to Mexican personnel. Ownership may remain firmly in the hands of American interests, but control is transferred gradually to Mexican administrators, thus dissolving the original consortium of firms and reestablishing the industrial operation under full-fledged Mexican licensure.

The consortium model is usually limited to construction of facilities and operation and maintenance for the first few years after completion of the plant. Sometimes hotel complexes, while being built, fall under this temporary consortium arrangement wherein expertise, financing and planning are provided for a brief period of time, then the participating companies dissolve and allow the local entrepreneur to manage and administer the complex (Intercontinental, 2001). If profits fall or financial obligations are not honored, pressure is exerted to regain managerial control of the complex under another structural arrangement. Sometimes, special privileges are granted to Mexico by U.S. contractors because of long-standing trust and confidence; however, the harsh realities of financial losses or the prospect of failure of a technology-transfer project ultimately resurface if stockholders or government agencies are, in turn, under pressure themselves.

The multinational joint venture model is one that can be singled out for discussion because it is frequently used by Asian and American firms wishing to cooperate with Mexican financiers. When the interests of all parties are convergent, such as during the fall of the Peso five years ago (Kelly, 1996), then foreign interests flock to Mexico, establish joint ventures and partnerships under this JV model described by Lado (1996) and attempt to assist Mexico, certainly, but also to enrich themselves in the process, which generally occurs. Joint ventures can be dissolved, as can the consortium approach, after everyone has extracted what gains they sought.

The wholly-owned recipient model is also fairly common according to Lado (1996) who acknowledges that countries like Mexico frequently make capital investments in foreign technology and retain full-ownership rights when doing so. The technology itself may be licensed to the recipient under international law, with its creator retaining full rights to it. The whole-ownership model is of special applicability, in Mexico, to firms like PEMEX with considerable capital to invest in petro-related businesses, distributorships, warehousing operations and retail outlets, among other investment channels. It is fairly rare to see smaller investors with enough capital to fully purchase new technological ventures from funds located within the recipient nation, particularly in Mexico where vast amounts of capital are controlled by an elite few. The entrepreneurial transfer model can be fused with the wholly-owned concept, except that projects are usually much smaller and have a reasonable chance of succeeding, due to proper in-country financing. The order of magnitude of a wholly-owned industrial venture might be in the vicinity of 70 million US dollars, whereas the individual or small-group entrepreneurial investment might be on the order of less than one million US dollars (AAA Trading, 2001). These are becoming more highly visible as small stores, modestly-sized manufacturing facilities for tourist-related jewelry or handicrafts, and other small businesses are opening, in an apparently unplanned and random manner along the border (Orme, 1996).

The alliance model, the last to be considered in this brief survey, is one that is fairly commonly used in Mexico. Entire nations collaborate with Mexico, whether the PRI or PAN is in power, to bring new industrial complexes into being, generally maquilas. Given the attractive economic climate in Mexico, all parties in the short, medium, and long term stand to gain, in spite of the surface appearance of developed nations exploiting labor in Mexico (Wilkie, 1997; Ganster, 1998).

Under all of these models, which will be illustrated in subsequent sections of this paper, it is necessary to ensure that goals and objectives remain "congruent." In Mexico, congruence has not always been an operative factor, since the interests of private firms, whether Mexican or foreign, have not, broadly speaking, coincided. Indeed, the medium and long-term interests of the developing country must be served and governmental or societal priorities must be honored. In centrally planned economies, the transfer of technology from industrialized nations must conform to Host Planning Ministries' expectations and budgetary constraints. This is the case, even if tied-aid or no-strings attached assistance is being offered. (Lado, 1996; Metz, 1994) In Mexico, planning is not a consistently implemented function, however, and ‘deals can be cut’ particularly along the border where spirals of growth and subsequent decline are common. Therefore, the playing field along the Mexican American border is not always equitable, predictable or stable. In fact, anarchic growth, with fluctuating and unplanned priorities, exists in towns like Tijuana, Juarez, Nogales, Piedras Negras, and Mexicali (Ganster, 1998). This theme will be further developed as the present analysis progresses.

Another crucial aspect of technology transfer to the Third World involves the ever-present "risk of expropriation", that is to say, the host government literally stealing the technology, perhaps for unauthorized internal use, perhaps for resale abroad at a profit, in violation of the terms of the initial agreement. The unauthorized use of technology can also occur on a private basis, among individuals or entities who or which have financial or political incentives to motivate them. For this reason, governments have been increasingly careful to police and enforce contractual arrangements whenever possible and industrialized nations are cautious in dealings with so-called rogue-regimes (Jacoby, 1977).

Within the context of Mexico in particular, it is critical to recognize that there are well-recognized and established flow-patterns of technology. Notably, the horizontal flow of expertise can be defined as on-going exchanges of fairly innocuous technical information, such as salt-refining processes or oil extraction know-how. This information flows horizontally from the industrialized nation to the recipient government or entity. Both parties are aware of the benefits and peculiarities of this technology on an equal footing. (Lado, 1996)

Vertical exchange of information, on the contrary, entails an unequal exchange. Under this scenario, nuclear fuel, for example, may be provided to a Third World nation for a specific peaceful purpose. The host nation cannot replicate this technology and the transfer remains that of a vertical nature, i.e. the industrialized nation feeding sophisticated technology to an underdeveloped recipient. With similar implications for Mexico, as well, one such case might be the "yellow-cake technology" transferred by Italy to Papua - New Guinea or to Indonesia where technical staff in those Less Developed Countries (LDCs) are unfamiliar with the production and use of this fissionable material. (Jackson, 1978; Mangone, 1977)

The existing body of literature focused on technology transfer models seems to suggest that the patterns that have been analyzed above are more broadly typical of other nations and regions as well. Because the cultural characteristics of Asia, for example, may differ from the traditions and patterns of Latin America, and specifically Mexico, the impact of technology transfer may affect Mexicans, for example, in a variety of ways. It is important to recognize, however, that the dissemination of technology is, on balance, a positive feature of 20th and 21st Century developmental trends. Information technology, as a case in point, is crucial to the enlightenment of peoples around the world. Care must be taken to avoid disruptive growth patterns, and congruence must remain a salient feature of all projects and programs envisioned by the governments of developing nations.

When examining the North American theatre of technical exchange programs, new challenges and risks appear compared to other continents (Litan, 2001). Although labor is relatively skilled and plentiful, imbalance from an ecological and sociological standpoint is looming as a major obstacle.

What salient observations can be validly generated from this initial exploratory discussion of technology-transfer patterns and paradigms in Mexico? It is well known that development is related to the ethos of a people, to the social psychology of a nation, and to their citizens' sometimes shifting priorities. What needs to be avoided, perhaps, in efforts to expand the horizons of other nations is the trend identified by Shrumpeter as early as 1934 toward "creative destruction" (cited in Lado, 1996). Indeed, it is crucial that technology transfer contribute constructively to the welfare of all peoples, and in this instance to the Mexican people, and that developed nations, notably the United States, assume the responsibility of subordinating "quick profit" to the higher goal of balanced, sane dissemination of rapidly evolving technology.

Because of the dynamics of trade patterns developed in recent years with the United States, and Canada to a markedly lesser degree, under the NAFTA Agreement and other accords, Mexico's impoverished south has remained relatively undeveloped, and a northward migratory pattern has surfaced and materialized over the last several decades (Roberts et al., 1996). This pattern is culminating in rapid expansion of its Northern Frontier sector, known by specialists, quite simply, as "The Borderlands." Technology-transfer patterns in Mexico have included cooperative alliances, joint ventures, and whole ownership models, among others, as mentioned earlier on Figure I. Attention to five such projects might shed light on the diverse nature of technical cooperation projects underway in Mexico at this juncture and the nature and extent of their impact on the nation’s future. Those that come immediately to mind are:

	1. The Maquiladoras (Japanese, American, Korean and Taiwanese): Alliance Model               

	2. The Fish Cannery Project in Baja Norte (French): Multi-National Joint Venture                             

	3 Tourism Development Initiatives in Cancun, Mazatlan and Puerto Vallarta: Entrepreneurship & Wholly-Owned                                                                       

	4. The Ford-Mazda Assembly Plant in Hermosillo (Japanese, American): Technical Cooperation Model            

	5. Telmex Improvement Initiative (American, French): Whole Ownership (Partially Privatized Ex-Monopoly)   

Reviewing the five cases above in the order presented, the foremost model of technology transfer for Mexico, as is widely recognized, is the maquiladora. Most theorists and journalists consulted have categorized this transfer vehicle as an alliance model, since entire governments are generally behind efforts to promote and sustain them. Philips, in Juarez, for example, seems sustained by much more than simple capital; indeed, government connections must be strong and well-developed for an operation of this magnitude to exist over time (UTEP, 1991; Class Visit, 2001). Similarly, the Ford Power Steering plant in Chihuahua, Chihuahua has been supported by intergovernmental initiatives for many years. The San Diego State University cooperative border research program also attests to many maquilas in Tijuana, Mexicali, Tecate, and Nogales having been promoted initially by Japanese, Korean and American governmental contacts (Ganster, 1998). Only later, were private firms involved, through these government contacts, in actual planning and construction of the assembly plants and industrial operations which were to be come maquilas – defined essentially as those operations which benefit from tax-free status in order to promote the hiring of Mexican workers. Of course, volumes have been devoted to the codes that govern them and to violations of these codes and covenants. Nonetheless, they qualify as alliance models because of on-going technical, diplomatic, financial, and administrative support from donor nations. Firms like Sanyo, Mitsubishi, and Ford Motor Company in conjunction with overseas manufacturers have cooperated with the Mexican government in a number of thus far successful initiatives, most of which are not egregiously infringing rules and regulations.

Not only has Japan found this source of labor lucrative, but Korea, Taiwan and, recently, Mainland China have been collaborating with the Mexican Government on organizing cooperative projects, featuring sophisticated technology transfer (Jiang Ze Ming Visit, Xinghua, 1998). Manufacture of computerized and electronic equipment is becoming increasingly visible along the Border at the various Asian-owned maquiladora plants, almost all of which are alliance model operations.

Again with reference to Figure II, the multinational joint venture is a fairly popular method of transferring technology to Mexico. The French fishing industry provided the know-how and expertise to design and construct a highly mechanized fish cannery in San Felipe, Baja Norte. The economic impact of this operation, which processes a large range of fish and seafood, notably shrimp, is highly favorable on the local economy of this town located at the northern end pf the Sea of Cortez (Editorial Playas, 2001). The joint venture vehicle originally used for the construction and commissioning phase of the San Felipe cannery has long since expired and the French contractors have transferred control of the cannery to Mexican ownership. Yet, cooperation over an extended period of time did take place and the entire regional economy of Baja Norte’s eastern coastline was significantly improved by this job-producing enterprise. It does not seem to have been part of a wider effort, however, to develop industrial activity in Baja Norte and may remain one of the relatively few showcase projects of its type, combining European expertise and Mexican resources, such as other projects described by the SDSU research team (Ganster, 1998).

Thirdly, it is appropriate for reasons cited earlier to group the entrepreneurial transfer model with the wholly-owned concept. The tourism industry is an excellent example of the transfer of low-tech expertise to Mexico using the existing business infrastructure of the country as the recipient party. Examples abound of the types of enterprises described by Shumpeter (1934, 1950, 1965) and Lado (1996) in this category of transfer. Hotel and restaurant construction at all levels of luxury is occurring in Mexico’s southern and coastal areas, in addition to continued growth along the border in attractive areas like Rosarita, Ensenada, and, to a lesser degree, Puerto Penasco. The financing of these initiatives is provided by dual sources, usually, representing a combination of locally available capital and external financiers, either private investors or sometimes banking interests. Riggs (1993) and other sources such as the Intercontinental Hotel site (2001) provide insight into the nature and extent of activities that sometimes fall beyond what we could classify as typical NAFTA exchanges. Tourism clearly falls into a category of low-tech transfer that comes with a heavy in-country training component for hotel industry personnel. These hotels, as mentioned earlier, fall generally into the entrepreneurial and wholly-owned classification set forth in Professor Lado’s writings (1996). They are proliferating and adding stability to circumscribed economic sectors within Mexico and provide internal control, rather than external domination. This feature alone makes them attractive technology transfer vehicles for Mexicans.

Next on Figure II is the technical cooperation model that is quintessentially typified by the Ford-Mazda Assembly plant in Hermosillo, Sonora. Whatley (1995) and Bannister (1996) have devoted considerable effort to extolling the many benefits of trilateral cooperation under this model. By providing the most advanced technology available in the world (Japand and U.S.) to a well-constructed assembly plant complex, at reasonably high wages by Mexican standards, not only can well qualified Mexican workers be attracted, and ‘fine-tuned’ as required, but profits can be made on a scale that encourage further expansion of these efforts, beneficial to all parties. Apparently, although conflicting assessments have surfaced, the Hermosillo assembly plant has been only a minimal polluter and has maximized the proper corporate culture, resulting in productivity, efficiency and general contentment among workers. This technical cooperation model has been difficult to replicate in Mexico and, for some reason, it appears as if the Ford-Mazda plant is an exception to the rule. Although it is not a widespread transfer vehicle in Mexico, Lado (1996) goes to some pains to describe the efficacy of this model elsewhere in the world.

Lastly, the Telmex improvement initiative is worthy of mention as a former State Monopoly, moving toward privatization, but depending on foreign technology, under a whole-ownership structure, similar in some ways to the tourism initiatives described earlier, but far more massive. In describing the type of transfer model that was used in the Telmex case, and its current status, Gary Chapman, writing in the Los Angeles Times, mentions the growth of electronic communication in Mexico as this phenomenon relates to the new phone system in Mexico (1996). He comments on the cooperative venture (ultimately scheduled to culminate in a whole ownership model as privatization, begun in 1990, progresses) that improved Telmex, and was comprised of Mexican, French and American corporations:

Whether the Telmex profitability rating, mentioned by Chapman, translates into "technical efficiency" is open to question, of course; yet, improvements made in the nationwide system are obviously worthy of note. Progress can be made in Mexico, when all parties cooperate forthrightly and with a sense of purpose. Goals, therefore, seem to be congruent with national interests and "mesh" well with available external assistance suppliers (Kotzrincker, 2000).

As can be noticed from our foregoing analysis of these five "transfer cases", one surprising trend that seems to be emerging within the context of Mexico's internal development involves cooperation with Asian nations. The Japanese, it is important to reiterate, have found the source of inexpensive Mexican labor to be attractive, enabling them to realize considerable profits on their vehicles and manufactured goods when resold abroad or at home. In fact, the Mexican workforce is reasonably well trained and has become increasingly more sophisticated as it gains experience, particularly along the U.S. frontier.

A preponderance of women employees was especially apparent at the maquila that the writer visited in Chihuahua, Chihuahua three years ago where employees were assembling power steering mechanisms for Ford Motor Company. Company officials during this tour explained that employees were mostly female since the turn-over rate was inordinately high for males, and they were more skilled and trainable than most male employees in the local labor force.

Because of population demographics and the intense level of activity along the U.S. Mexican frontier, there are a number of troublesome aspects associated with technology transfer in this area. Due to what appears to them to be anarchic growth, ecologists and environmentalist are voicing concern about pollution-related issues and about blatant contamination of precious watershed resources in Texas, New Mexico, Arizona and California. The Mexican side of the border is also adversely impacted by this phenomenon, and, many observers feel, is actually bearing the brunt of the negative effects of overly rapid development. This polemic is being voiced in publications such as the International Band for Reconstruction and Development’s World Development Report (1995) and U.N. publications such as Watkins’ Occasional Report (2000).

Some of the major negative features of mis-coordinated technology-transfer programs, and particularly those in Northern Mexico should not go unnoted.

Urban sprawl is occurring on a massive scale in large cities like Tijuana where miles of colonias, slums, and shanties stretch beyond the horizon. While jobs are being created by the maquilas described earlier, there is resultant overgrowth and a poorly organized, completely inadequate life support infrastructure (Ganster, 1998). Tarpaper dwellings are in profusion, and even these are not sufficient in number to house the massive influx of southerners flocking to the border in hope of employment. These features are archetypal characteristics of Third World conditions.

There have been widespread genetic defects reported in the press and chemical contamination has been blamed. Effluent from industrial operations is affecting the quality of life for all, whether in terms of air pollution or liquid waste draining into drinking water and recreational or residential areas. In tandem with these problems there is a sewage disposal crisis along the border. Juarez does not have an efficient human waste treatment plant, a simple fact of life recognized by residents of the El Paso/Juarez metropolitan area. Raw sewage from Mexico, according to easily accessible press reports, is also pouring into the Imperial Beach area of San Diego, across the international border. These phenomena are related to anarchic growth patterns, lack of funding, poor planning, sporadic enforcement of treaties, regulations and codes, as well as to profit-oriented businesses, oblivious to the damage they are causing and disrespectful of laws, in spite of assurances to the contrary.

Under these conditions, crime thrives and socio-cultural dislocation has become a major problem leading to destabilization of the family, divorce, family violence and all the consequences associated therewith.

As if this were not enough, critics, writing in opposition newspapers like Zeta, have added depletion of natural resources to the list of ills caused by excessively rapid growth of border industries. There are also indications that similar depletion, unregulated by the government, is occurring elsewhere in Mexico as a result of poorly planned economic expansion in ecologically delicate areas.

It is highly doubtful whether actual proof of the relationship between the extent of technology-transfer programs and these social ills can be demonstrably established. However, in the case of Mexico, planning must be conducted carefully, in conjunction with international agencies, to avoid proliferation of these and other conditions, particularly as governments change leadership (Dwyer et al., 2000). Attention must be paid to education programs, job training and social service networks on both sides of the border. Employers, as well, must be sensitized to these issues in an effort to improve the quality of life for all individuals participating in these fast-growth industries where technology seems to be outpacing human capacity to cope with certain consequences. If these steps are taken it may be possible to objectively resolve many of the planning dilemmas and tendencies toward anarchic growth now plaguing major urban areas along the US-Mexican frontier. Profits need not be diminished to achieve suitable ends. However, an understanding of Lado and Shumpeter’s advice, admonitions, and paradigms, all aimed at ensuring balanced, harmonious growth consistent with reasonable profits, must characterize the thinking of those making the vital decisions that will so directly impact the immediate and long-term future of Mexico.

Like virtually all Third World nations, Mexico, whether under PRI or PAN leadership, has descended into many of the snares and pitfalls that impede smooth and sane prioritization of growth and development. It could be argued that President Vincente Fox has not had enough time to reverse the trends of the past. However, his party, PAN, had been in control of several Mexican states for many years, and development trends in those regions (notably Chihuahua and Baja Norte) displayed the same weaknesses and distortions as areas of the country under PRI control. Understandably, politics notwithstanding, the relationship between technology transfer and balanced development is an important one. It must rise above partisan political issues in the higher interest of the nation.

The foregoing analysis reviewed the theoretical technology transfer models that are most frequently used in Mexico, by both donor and host countries. Viewed separately, these models may be perceived, in spite of certain criticisms, to have produced excellent results in terms of profit, productivity and employment. But, when all transfer models and all transfer projects are weighed, it may well appear that there has been, on balance, in Mexico a distinct tendency toward anarchic growth, not-so-subtle exploitation of workers, and gradual, but steady, destruction of the ecology of the Borderlands. The warnings of prominent technology transfer theorists like Lado and Shumpeter may not have been heeded and Mexico may be headed to ‘creative destruction’, producing limited benefits in the short-term perhaps, but ultimately culminating in disastrous consequences for the unwary recipient nation.

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