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By Dr. Vijay Kr. Khurana
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Technology Transfer is the process by which technology is disseminated. It involves communication of relevant knowledge by the Transferor to the Recipient. It is in the form of technology transfer transaction which way or may not be a legally binding contract.
What is Technology Transfer ?
Twoterms technology transfer and technology are normally used interchangeably. The verb “Acquire” means • To come into possesion of. new product. by efforts of an individual or an enterprise or any other macro entity. process or service . What is Technology Acquisition ? . This process can be conducted either internally or externally to the enterprise. get as one’s own • To gain for oneself through one’s actions or efforts Technology Acquisition is the process of acquiring a new technology.
Direct Technology Transfer. Spin-off Technology Transfer Informal Technology Transfer & Formal Technology Transfer Internal Technology Transfer & External Technology Transfer Types of Technology Transfer .• • • Scientific Knowledge Transfer.
Internal Technology Transfer refer to such technology transfers / investments where control on the ownership & usage of technology resides with the transferor. It is a complex process involving following decisions: • Timing : When to introduce new technology / products in the market? • Location : Where to transfer new technology / products? • Multi-functional teams --Which staff members should be involved in transfer process ? • Communication methods & procedures – What type of Communication methods & procedures be adopted to facilitate transfer ? Internal Technology Transfer .
• Non-linkage of new technologies to marketing / customer needs. • Difficulties in stopping current production to test new products / processes • R&D Department does not understand needs & capability of Production Department.• R & D goals are not known to Production Department. Barriers to Internal Technology Transfer . Production Department is resistant to innovation and is bound by routine. • In general.
• Rotation of few person between R&D and production • Linking & participation of marketing elements in the transfer process.• Top management support and participation in the transfer process • Providing supportive organizational culture • Use of multi-functional teams in the transfer process • Ensuring effective communication in the organization • Bringing R&D closer to production. Overcoming Barriers to Internal Technology Transfer .
processes or services – only viable / feasible items be offered as only one out of 4/5 becomes a commercial success. Screening new products. 3. Initiating development process – must be properly designed and carried out so that it facilitates success.1. Organize the systems around problem solving Steps in Internal Technology Acquisition by a firm . Enterprises should a. Planning new products / services / processes to be offered – planning must incorporate voice of the customer & user needs 2. Consist of temporary system capable of adapting to dymanics of change b.
Commercialization i. Use multi-functional teams.c. Have flexible management system & replace rigid management system d. Improving design & production processes based on experiences / feedback 6. Proper integration between R&D. Ensure effective communication 4. e. mass production & sales Steps in Internal Technology Acquisition by a firm .e. Carrying out trial production on small scale and test marketing 5. Production & Marketing sub-systems f.
like joint venture with local control.• In these transfers. control on the ownership & usage of technology usually does not remain with transferor and it passes on to the recipient. External Technology Transfer . licensing agreement etc.
Successful external technology transfer depends upon following factors: • Type of the technology being transferred • Complexity of the technology being transferred • Transfer mechanism selected • Relationships between the parties – building of mutual trust • Core competencies of the parties & compatibilty thereof • Organizational culture of the parties & mutual understanding thereof External Technology Transfer .
.Methods of External Technology Transfer • Co-operative & collaborative ventures / strategic alliances • Licensing agreements • Contracting agreements • Enterprise acquisition.
• Need to keep up with competitors • Need to cope up with acceleration of technological change • As a part of firm’ strategy --. Why External Technology Transfer .let other firms take big risks & it will purchase technology developed by them.• Technology already developed saves time & efforts • Sometimes Growth objectives or competitive goals cannot be reached through internal development • Lack of risk taking ability for innovations • Lack of internal resources (physical & human) for innovation • Firm does not have core competencies to deal with complex technological developments.
• Associated costs – usually high prices are required to be paid in the form of royalities. technical & knowhow fees etc over medium to long term period • Appropriatesness of technology i.may make transferee / recipient technologically dependent on external technology providers / transferors even for small issues • Lack of mutual trust between two parties may hinder full & timely transfer Barriers to External Technology Transfer . its suitability to core competencies and market needs is always a point of discussion and investigation • Heavy reliances on foreign technology.e.
• There is risk of loss of control over technology and the transferee / recipient may use technology in an arbitrary manner • Transfer may render existing technology & its related products / services / processes obsolete • Transferee may turn a potential competitor in future. • Mismatch in core competencies of the transferor & transferee may create difficulties in transfer • Different organisation cultures may create difficulties in transfer • Lack of effective communication between the parties may also create difficulties in transfer Barriers to External Technology Transfer .
• Proper & well defined technology transfer agreement should be signed • Proper assessment / evaluation of appropriateness of technology • Proper assessment / evaluation of compatability of core competencies of the parties • Building pre-agreement relationships so as to develop mutual trust and so as to understand culture of opposite parties • Seeking cross cultural training • Ensuring effective communication • Anticipating problems and adopting measures for facilitating transfer Overcoming Barriers to External Technology Transfer .
CDs to purchaser Training of technical personnel of purchaser . 5. compatibility of core competences. Steps in External Technology Acquisition by a firm – 4. 3. 2. 6.1. Identification of Need Developing list of suitable technology providers Short listing / selecting suitable technology providers on the basis …. designs. blueprints. technical feasibility etc Negotiation Agreement Payments as per agreement Transfer of specifications. appropriateness of technology. 7. Cultural compatibility. documents. 8.
• • • • • Lumpsum payment or periodical instalments Royalities as a %age of sales over next few years Cross-licensing agreements Contracted supply of output Issue of equity shares in lieu of technology transferred Modes of Payment for Technology Transfer .
• What factors influence acquisition decision? • What are national strategies for technology acquisition? • Methods of technology acquisition by a nation Acquisition of Technology By Nation .
making a positive list of industries open to FDI – Through indirect measures .Methods of Technology Acquisition By Nation • Attracting TNCs / MNCs – Through direct measures viz.viz by offering incentives & subsidies • Attracting TNCs / MNCs into natural resource processing & inducing greater value additions • Using TNCs / MNCs to attract / encourage their overseas suppliers to invest into country • Improving skills & training of local technologists by involving TNCs / MNCs .
Methods of Technology Acquisition By Nation • Developing industrial parks / technology parks to attract high technology investors • Offering incentives to existing investors to move to more complex technologies and to increase or upgrade technological R& D base • Changing competitive environment and existing incentive structure to encourage world class technology & management • Improving technological access for local firms for outsourcing / technology transfer • Collecting. organising & disseminating information about technology development .
• The regulation is undertaken in two directions: – Regulation of import of technology / technology inflows – Regulation of export of technology / technology outflows & Setting up of Joint Ventures (JV) and Wholly Owned Subsidiaries (WOS) Abroad • Why regulation of import of technology? – What are advantages & disadvantages of import of technology? • What are – Guidelines on import of Foreign Technology into India? • Why regulation of export of technology? –What are advantages & disadvantages of export of technology? • What are – Guidelines on Export of Technology & Setting up Joint Venture & Wholly Owned subsidiary abroad? Regulation of Technology Transfer By Nation .
Khurana .Technology Acquisition & Transfer By Dr. Vijay Kr.