Explain different types of technology transfer and
discuss how the impact of such transfers is assessed. Support your answer with
relevant examples.
Ans What is Technology Transfer ?• 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
Types of Technology Transfer•
Scientific Knowledge Transfer,
Direct Technology Transfer,
Spin-off Technology Transfer•
Informal
Technology Transfer & Formal Technology Transfer
Internal Technology Transfer & External Technology
Transfer
Internal Technology TransferInternal 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 ?
Barriers to Internal Technology
Transfer• R & D goals are not known to Production Department.• Difficulties
in stopping current production to test new products / processes• R&D
Department does not understand needs & capability of Production
Department.• In general, Production Department is resistant to innovation and
is bound by routine.• Non-linkage of new technologies to marketing / customer
needs.
Overcoming Barriers to Internal Technology
Transfer• 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.• Rotation of few person between R&D
and production• Linking & participation of marketing elements in the
transfer process.
Steps in Internal Technology Acquisition by a
firm1. Planning new products / services / processes to be offered – planning
must incorporate voice of the customer & user needs2. Screening new
products, processes or services – only viable / feasible items be offered as
only one out of 4/5 becomes a commercial success.3. Initiating development
process – must be properly designed and carried out so that it facilitates
success. Enterprises shoulda. Consist of temporary system capable of adapting
to dymanics of changeb. Organize the systems around problem solving
Steps in Internal Technology Acquisition by a
firmc. Have flexible management system & replace rigid management systemd.
Use multi-functional teams.e. Proper integration between R&D, Production
& Marketing sub-systemsf. Ensure effective communication4. Carrying out
trial production on small scale and test marketing5. Improving design &
production processes based on experiences / feedback6. Commercialization i.e.
mass production & sales
External Technology Transfer• In these
transfers, control on the ownership & usage of technology usually does not
remain with transferor and it passes on to the recipient, like joint venture
with local control, licensing agreement etc.
External Technology TransferSuccessful
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
. Methods of External
Technology Transfer• Co-operative & collaborative ventures / strategic
alliances• Licensing agreements• Contracting agreements• Enterprise
acquisition.
Why External Technology Transfer• 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.• Need to keep up with competitors• Need to
cope up with acceleration of technological change• As a part of firm’ strategy
--- let other firms take big risks & it will purchase technology developed
by them.
Barriers to External Technology Transfer•
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.e. its suitability to core competencies and
market needs is always a point of discussion and investigation• Heavy reliances
on foreign technology- 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•
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
Overcoming 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
Steps in External Technology Acquisition by a
firm –1. Identification of Need2. Developing list of suitable technology
providers3. Short listing / selecting suitable technology providers on the
basis …. Cultural compatibility, compatibility of core competences,
appropriateness of technology, technical feasibility etc4. Negotiation5.
Agreement6. Payments as per agreement7. Transfer of specifications, blueprints,
designs, documents, CDs to purchaser8. Training of technical personnel of
purchaser
Modes of Payment for Technology Transfer•
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
. Acquisition of Technology By
Nation• What factors influence acquisition decision?• What are national
strategies for technology acquisition?• Methods of technology acquisition by a
nation
Methods of Technology Acquisition
By Nation• Attracting TNCs / MNCs – Through direct measures viz. making a
positive list of industries open to FDI – Through indirect measures - 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
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