Technology transfer

Technology transfer, also called transfer of technology (TOT), is the process of

transferring (disseminating) technology from the person or organization that owns
or holds it to another person or organization. It occurs along various axes:
among universities, from universities to businesses (and vice versa), from large
businesses to smaller ones (and vice versa), from governments to businesses (and
vice versa), across geopolitical borders, both formally and informally, and both
openly and surreptitiously. Often it occurs by concerted effort to share skills,
knowledge, technologies, methods of manufacturing, samples of manufacturing,
and facilities among governments or universities and other institutions to ensure
that scientific and technological developments are accessible to a wider range of
users who can then further develop and exploit the technology into new products,
processes, applications, materials, or services.
Types of TOT
 Vertical Technology Transfer
Transfer of technology from Basic Research to Applied Research to development
and then to production.
It is the transfer of an embryonic technology (i.e. a pre-commercialized or generic
technology) from an individual or institutional inventor (e.g. a government or
university /laboratory) to an organization that can either commercialize it into a
new product or process or make it publicly available for the practical solution of a
problem in society.
Ex: Nano-technology;
 Horizontal Technology Transfer
It is the transfer of a commercialized or operational (usually mature) technology
from one organization in a specific socio-economic context to another organization
in a different socio-economic context, through intra-firm, cross-industry, or cross-
border channels.
Ex: licensing; inter-university assessment cells
 International Technology Transfer
◦ Transfer across national boundaries
 ◦ Ex: From industrialised countries to developing countries; bilateral
agreements
 Regional Technology Transfer
◦ From one to another region of the country
◦ Ex: From one state to another state in India; regional conferences
 Cross Industry Technology Transfer
◦ From one industrial sector to another
◦ Ex: Space program to commercial application; Contribution of
electronic industries in heavy industries
 Inter-firm Technology Transfer
◦ From one firm to another
◦ Ex: machine tool manufacturing firm to a furniture producing firm
 Intra-firm Technology Transfer
◦ Within a firm from one location to another
◦ Ex: transfer of turbines and motors within BHEL plants
Process of Technology Transfer
 Research:
◦ Observations and experiments during research activities often lead to
discoveries and inventions.
◦ An invention is any useful process, machine, composition of matter,
or any new or useful improvement of the same.
 Disclosure:
◦ The written notice of invention to Organisation that begins the formal
technology transfer process.
◦ It remains a confidential document, and should fully document your
invention so that the options for commercialization can be evaluated
and pursued.
 Evaluation or Assessment:
◦ The period in which the organisation representative review the
disclosure, conduct patent searches (if applicable), and analyze the
market and competitive landscape to determine the invention’s
commercialization potential.
 Intellectual Property Protection (IP protection):
◦ Protecting invention is essential for many reasons, but is especially
important to attract partners who want to license it.
◦ There are various ways to protect an invention, depending on the
nature of the disclosed technology:
 Patents are the most common means of protection.
 Copyrights are generally used for creative works such as
software, literary works, photographs or musical compositions.
 Marketing:
◦ Organisation identifies candidate companies that have the expertise,
resources, and business networks to bring the technology to market.
◦ This may involve partnering with an existing company or forming a
start up.
  Licensing:
◦ A license agreement is used with both a new start up business or with
an established company.
◦ An option agreement is sometimes used to enable a third party to
evaluate the technology for a limited time before licensing.
◦ The licensee company continues the advancement of the technology,
and makes other business investments to develop the product or
service. This step may entail further development, regulatory
approvals, sales and marketing, support, training, and other activities.
 Set portions of the revenues received by organisation from licensees are
distributed to the inventors, and other institutions (in the case of jointly
owned inventions) to fund additional research and education and to
encourage further participation in the tech transfer process.
Channels (Techniques) of Technology Transfer
1. Foreign Direct Investment (FDI):

It is one of the main methods of technology transfer .FDI is the most preferred
route to transfer newer technology. Foreign direct investment (FDI) is when a
company takes controlling ownership in a business entity in another country. With
FDI, foreign companies are directly involved with day-to-day operations in the
other country. This means they aren’t just bringing money with them, but also
knowledge, skills and technology.
◦ Generally, a foreign company invests in developing countries in order to
create a new market, remove export barriers and get an access to cheap
labour.
◦ In this case, a developing country gets all the benefits of technology transfer,
particularly the development of its own research environment. Besides, it is
a way to create new jobs and raise taxes.
◦ Ex- Ford, Hyundai, Coke, Pepsi, HDFC standard etc.

2. Licensing Technology:

The mode of technology transfer through licensing is older than the FDI. It is an
agreement under which the owner of a patent, trademark or other intellectual
property gives permission to another company to use the technology developed by
him (her), in a certain area during a certain period of time.
There are two main types of licenses:

◦ One which grants an exclusive right to use the technology.

◦ Another with non-exclusive right, which implies that the patent owner may
transfer the right to use the technology to other companies in the same area.

 The advantage of buying a license/patent is that it has lower costs, compared

with other technology transfer methods.

 However, the purchase of a license requires sufficient knowledge,

experience, relevant expertise and manufacturing base for the further in-
house technology implementation.

 Ex: Microsoft office

 3. Franchising

 It is an agreement where one company grants to another the right to use its
trademark and business model.

 The buyer of the franchise starts manufacturing and selling the goods
according to the seller’s specification.

 Normally, the company owner of a trademark also shares its experience in

operating and managing the franchised product/technology.

 The main advantage of franchising is the fact that the company gets an
already-made brand. With the franchised product, the company acquires a
proven business model, knowledge in management and marketing.

 The disadvantages are the company’s dependence on the technology owner.

 EX: Archie's ,Pizza corner, Mc Donalds etc.

Basic Difference between Licensing and Franchising

A licensing agreement allows the licensee to use, make and sell an idea,
design, name or logo for a fee, whereas a franchise agreement allows the
 franchisee to operate a business as an independent branch of a company for a
fee. And whether you sign a franchise agreement or a licensing agreement,
you’ll have to pay a certain percentage of your sales back to the franchisor
or licensor in royalties.

4. Joint Venture (Temporary Partnership)

 It is an agreement concluded between two or more companies in order to

execute a particular business.

 It implies mutual assets, management, risks, profit sharing, co-production,

services and marketing.

 Benefits :

◦ Long-term cooperation between the parties

◦ Motivation of all participants in the successful transfer

◦ Lower costs than if the companies have been working separately

 The disadvantages of a joint venture are often associated with the different
vision and goals of both partners, their inability to be independent in
management.

 Ex:

◦ Ratnagiri gas private limited – JV of NTPC & GAIL

◦ Avantika gas limited – JV of GAIL and HPCL

5. Strategic Alliances:

◦ It is an agreement usually concluded between two or more big

companies in order to use specific skills of each of them in the
development of new innovative technologies.

◦ Strategic alliance could be in form of joint laboratories, research

programs, production and promotion of a new product.
 ◦ The major weakness of strategic alliances is the complexity in
managing companies with different cultures.

◦ Ex-

 ICICI Bank and Vodafone India entered into a strategic

alliance to launch a unique mobile money transfer and payment
service called ‘m-pesa’

 Asian Paints, the largest paint-maker in India, acquired a

strategic stake in Singapore-based Berger International in 2002

 Etihad Airways, based in Abu Dhabi, has completed an

investment in India’s Jet Airways.

 Apple and IBM strategic alliance, to assist Apple penetrate the

global corporate enterprise market.

Appropriate Technology

What is appropriate technology?

Appropriate technology is small-scale technology. It is simple enough that people

can manage it directly and on a local level. Appropriate technology makes use of
skills and technology that are available in a local community to supply basic
human needs, such as gas and electricity, water, food, and waste disposal.
A technology is deemed to be appropriate when it is compatible with local,
cultural, and economic conditions (i.e., the human, material and cultural resources
of the economy), and utilizes locally available materials and energy resources, with
tools and processes maintained and operationally controlled by the local
population.

Some of the key features of Appropriate Technology schemes are:

 Recognizing, appreciating and making use of local skills, knowledge and
aspirations rather than the ‘outside expert’. This may include training people
from the local community to bring their skills up to the required level.
 Making use of local resources, as far as possible – material and skills.

 Being sensitive to community benefits from the scheme and ensuring they
are distributed as widely as possible and have minimal negative
consequences.
  Being sustainable – both to the environment and in having long-term
operation without the need for constant inputs of investment or maintenance.

Example of Appropriate Technology:

Well-known examples of appropriate technology applications include: bike- and

hand-powered water pumps (and other self-powered equipment), the universal nut
sheller, self-contained solar lamps and streetlights, and passive solar building
designs.

Bicycle Water Pump Universal Nut-Sheller

Hand-Pump Pot-in-Pot Refrigerator

 Technology Assessment(TA)

 It is a scientific, interactive, and communicative process that aims to

contribute to the formation of public and political opinion on societal aspects
of science and technology.
 TA is the study and evaluation of new technologies.
 It is based on the conviction that new developments within, and discoveries
by, the scientific community are relevant for the world at large rather than
just for the scientific experts themselves.
 Technology assessment assumes a global perspective and is future-oriented.

Technology forecasting

Technology forecasting attempts to predict the future characteristics of useful

technological machines, procedures or techniques. Primarily, a
technological forecast deals with the characteristics of technology, such as
levels of technical performance, like speed of a military aircraft, the power in
watts of a particular future engine, the accuracy or precision of a measuring
instrument, the number of transistors in a chip in the year 2015, etc.

TECHNOLOGY FORECASTING METHODOLOGIES

Specific techniques for forecasting fall into two main categories, exploratory
and normative.
 i) Exploratory techniques are primarily concerned with the analysis of
historical data. Selected attributes such as functional performance, technical
parameters, economic performance etc. are plotted against time.
 Since it is usually assumed that progress is evolutionary and that
technological progress is not random, it is possible to generate characteristic
curves or patterns from the data and from these patterns forecasts can be
made with varying degrees of certainty.
 However, changes do occur and the influence and impact of new or surprise
factors must not be disregarded.
 Examples of relevant exploratory techniques are: S-curves cycles, trend
extrapolation, technology substitution; all of which rely on a large amount
of statistical data, which may or may not be available freely.

ii) Normative techniques

Normative techniques start by proposing a desired or possible state, such as
the satisfaction of a market need or the achievement of a technological
development, and work backwards from this to determine the steps
necessary to reach the required outcome.
 The number of foreseeable paths of development from the present position
to the objective could range from ‘none’, implying a completely new
technology, to ‘several’.
 Each feasible path to the objective is analysed for its relevance and
difficulty.

Technological Innovation
Definition

 Technological innovation comprises activities that contribute to the research,

development and design of new products, services or techniques, or to
improving existing products, and generates new technological knowledge.
 It is the introduction or alteration of some form of technology (often
information technology) into an organisation.
 It is a process, product, managerial change and creation that improve
company´s productivity and quality, adding value to customer.
 Innovation process and outcomes involve the development and diffusion in
the market and society of new products, services and organizational models.

The 8 stages of the technological innovation process

1- Basic research

Basic research is that phase of the technological innovation process that only
occurs in large companies, usually in the pharmaceutical, energy and
information technology sectors, which keeps research and development
departments continuously abreast of the state of the art technologies that
most impact their organizations.
2- Applied research

When it detects some specific market needs that may represent an

opportunity to develop a sustainable competitive advantage for the business,
the company searches among the technologies that dominate the way to
solve this problem. At this point, you can integrate existing technologies
creatively and innovatively or really develop something totally new.

3- Development
When reaching a solution to the market need, it’s time to develop the
product, service or process that will be marketed or employed. For this, a
prototype is developed that must be tested, preferably with the help of the
public that will use it.

4- Engineering
With the prototype set, you have to turn it into a scalable product or service
that can be mass-produced or meet the specific needs of an industry.
Materials, suppliers, appropriate forms of storage and transportation are
searched, such as connecting parts and benefiting inputs, defining which
professionals will need to be hired and trained, among other measures.

5- Manufacture

This is one of the most important aspects of the technological innovation

process.
It is time to define the best way to deliver the solution created to the final
customer, with efficiency and quality.

6- Marketing

With the product or service ready to be released, it’s time to do concept

tests, market research and market testing to see if any adjustments are still
required depending on how their acceptance and distribution is taking place
in test markets.

7- Promotion

Once the market tests are done, the product or service is launched nationally
or globally, depending on the markets the company serves.
8- Continuous improvement

Once launched, both the product or service and the process flows used to
produce and deliver them to end customers are constantly measured and
analyzed, with the aim of looking for ways to improve them even more,
adding even more perceived value to the final customers.

Barriers to Technological Change/Technology Adoption

There are lots of good technologies out there, and you are using them. So
why hasn’t technology had a positive impact (beyond drilling) on teaching
and learning? We have come up with a list of barriers that need to be
addressed if technology is going to have an impact beyond the isolated
classroom.

Lack of leadership/support for innovation

• Comfort level – effect of disruption
• Time to make changes and adjust
• Understanding of and ability to implement
• Social implications – changes in collaboration communication styles
• Current processes or procedures
• Budgetary priorities
• Difficulty/availability/time for training
• Resistance to learning new technology
• Work stress/overload
• Cost
• Proof of value
• Reliability – will it continue to provide value
• User acceptance
• Performance

Note: Elaborate each point if necessary.