Abstract: Large-scale industrialization policies and programs have proved themselves impractical to developing economies due largely to resource constraints. Small and Medium Industries (SMIs hereafter) play an important role in the transformation of developing economies. The globalization of competition and the world economy have direct relation with the ever-increasing rate of technological changes, which in turn affect the competitive position of SMIs. Investment in technology is becoming an important weapon not only to achieve competitive advantage and profitability but also to survive in this turbulent and dog-eat dog global markets. As Developing countries lack the necessary resources, expertise, skills and infrastructure, it is unthinkable for them to come up with new ways of producing goods or providing services. It is therefore wise and advisable to adopt the appropriate technology and management know-how that has been innovated and tested in the developed world. The purpose of this paper is to throw some light on the prospects and problems of technology transfer in developing economies with a special reference to Botswana.