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BPTT 3133TECHNOLOGY TRANSFER IN BUSINESSDr. Md. Nor Hayati Bin Tahir

B. Sc (Geology, UM)M. MoT (Technology, UTM)D. Sc (IT Economics, Waseda Japan)

Mobile: 012-603 6456

e-mail : mdnortahir@utem.edu.my

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CONCEPT

Technology The practical application discipline of

science to commerce or industry Development

Process of improving by expanding, enlarging, refining, evolvement, gradual growth, evolution, maturation and progression

Technology Change Technology Transfer (TT)

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Definition: Technology

Practical application of science to commerce or industry. A system of knowledge, skills, expertise, and organization

used to produce and utilize goods and services that satisfy social demand

Ideology that contributes to the healthy development in life

Capabilities of human society to transform nature, the resources, into useful products for human consumption

Facilitates human activities and to satisfy human needs for unlimited knowledge

Practical application of science to commerce or industry Knowledge that is been embodied in the sciences and the

application of the technique of sciences.

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Technology can further explained Capabilities of human society to transform nature

(resources) into useful products for human consumption Have its own generation Have its own structure Dynamic process that bring about socio-economic change

and growth of human knowledge Development of technology will result a technological

progress and new cycle of growth Can be updated and improved

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Result

The result can be benefited and disbenefited to human life.

Impact of technology progress, Increase living standard Increase output per capita Increase of rate of national economic growth

Further result, Continuous adaptation Improvement Development Towards technology-intensive industries

 Technological change originate externally and internally Resources - Knowledge and information embodied in mode

of technology transfer The transfer of technology suggests how technology might

be systematically imagine.

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Technology Transfer

Process of sharing of: Skills Knowledge Technologies Methods of manufacturing Samples of manufacturing Facilities

Among governments 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.

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Mode of TT

Managerial Political Social National context Intellectual Property

Right Know-how Foreign direct

investment Licensing and joint

ventures that involve the transfer of equipment and materials

Skilled manpower Organizational

innovations Franchising

Marketing contracts Technical service

contracts Turnkey contracts International sub-

contracting Technical assistance Affiliate Licensing Business development Incubators and research

parks Information networks Design and drawing Management contract

Technology transfer is embedded in

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Technological Change

Describe the overall process of Invention Innovation Diffusion of technology or process.

It involve at all stages of research and development

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TT to Developing Countries

Definition: Developing Country Manufacturing industry contributes less

that 10 % of GDP (World Bank) Technology will enhance

Efficient use of resource Promote industrialization Socio-cultural development

TT is the engine of development

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Concept of Changes

For efficiency of production and continuous improvement.

The demand of different level of technology signifies the rate of technological changes in the nation.

It demonstrates the gap between nations relates to technology specific and infrastructure related.

For sustainability in developing nation The acquisition and adaptation of technology become more urgent

and complex.

These will affect the development process itself How the technology is transferred to the organization

To the extent that varies in term of the magnitude and scope of change.

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Magnitude and Scope of Change

Depend on various factors such as: Resources Institutionalized infrastructure Organization-managerial style Political systems Knowledge and scientific capability Potential of imitation Knowledge absorption. Policies of a nation Economic environment of a nation Public acceptance of consequential social and political

changes.

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Non-Technical Changes

Changes promote new set of values Geographically Environmental and resource location Scientific advance Pre-existing technology Market process Industrial relations Organization structure State institution and international systems of states Gender division Cultural factors

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Technology growth

Presence of technology gap Innovation, that tends to increase technological gap

Innovation of technology that does not diffuse to the critical mass will increase the technological gap in a developing nation and among the developing nation.

Example: comparing mobile technology and manufacturing technology among developing nation

Both contributes to economic growth Imitation, which tends to reduce them

Within the framework of technology transfer, imitation tends to increase the diffusion rate that in turn, reduce the gap.

Issues of property right that does not bring about any economic implication to the owner but to the nation.

Ethically, is not right.

Issues Relevant to Gap

A close relationship between a nation’s economic and technological levels

The rate of economic growth positively influenced by technological growth

Nation facing a lower level technological gap will increase rate of economic growth through imitation

The rate at which a nation exploits the possibilities offered by the technological gap depends on its ability to mobilize resources for transforming social, institutional and economic structure.

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Implication of Tech Transfer’s Gap The technology policies become as part of economic

policies for a nation. For wealth creation and not with the pursuit of

technological achievement for its own sake. The economic benefits when brought to the market Measurement is by:

Economic development by Gross Domestic Product (GDP) Technological development by the level of R&D or by patent

statistics.

Traditional Neoclassic Theory believes that: Technological development depends primarily on

the relation between capital and labor. Technology Gap Theorist

Relate the technological level of development of technology capabilities and innovative activities.

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Technology Issues in Developing Countries

UNESCO: Only 11 industrially developed countries produces science and technology (S&T)

For TT to qualify, issues to consider are: Technological level Technical capability Absorption Assimilation Sub process to internalize transfer

• country comparison to the world: 31

• $383.6 billion (2009 est.)

• $390.2 billion (2008 est.)

• $372.7 billion (2007 est.)

Note: data are in 2009 US dollars

Malaysian GDP

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Process of Sharing

Sharing many other elements in Technology transfer such as:

Skill Knowledge Expertise Time Others

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Innovation Theory

Innovation is necessarily linked to the entrepreneur Entrepreneur derives new economic combinations by

means of introducing 5 parallel types of changes: Introducing new products; Introducing new production functions that decrease the

input needed to produce a given product; Providing new consumers by opening new markets; Exploiting new sources of materials; and Reorganizing an industry

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Entrepreneur-Innovator

Entrepreneur-innovator characterized by: Initiative Authority Foresight Captain of industry

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Factors affecting TT to Developing Countries Financial Technological resources Low per capital GNP Unfair income distribution Lack of hard currency Political conditions Ineffective bureaucracies Illiteracy Riots Social violence

Language Religion Political instability Labor strikes Transportation Telecommunication and communication systems Unmodernized education systems Research facilities Insufficient professional institutions for technologists

and researchers

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Mastery of technology

Upon TT: can host nation attain the same

Between industrialized countries Industrialized countries to developing

countries Range from mere transfer of production to

complete process

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Pathway of TT

Process of TT is very costly and complicated

Depend much on Level Direction of indigenous technological

effort Institutional setting at host country

TT system must accommodate Physical transaction to indigenous

technological endowment to adoption and development in host country

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Obstacle of Successful TT in Developing Country

Sophisticated process that structurally is beyond control

Socially and culturally Eg: adaptation and diffusion

Output is fundamentally strange/unfamiliar

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Why failure (1)

Factors that are not easily been transferred: Knowledge Know-how S&T Management

Global competition Investment capability Learning capability Organization-operation capability

Economic characteristics Market size, degree of tariff protection, personal

income, market and information distortion Availability of skills Political stability

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Why failure (2)

Substantial differences Widening gap in S&T capabilities

Import of technologies requires resources capabilities

HR skills Technical knowledge Information networks As a result – selection of appropriate

technology

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How to overcome failure

Long term interaction between host and home country

Marginal TT that can be stimulate positive response

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Technological Development in Developed Country

Presence of smooth linkages Incremental Material support Knowledge-based Knowledge intensive New technology input requirement

supplied by host country

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Appropriate Technology (1)

Choices of right technology to be transferred to catalyze growth that appropriate to the environment strategically and to be utilized

Technological Techno-economics National aggregate capability Socio-cultural Political Environmental Legal

Ranges: Labor intensive Low technology Knowledge-based on expert system/ soft

technologies

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Appropriate Technology (2)

Developing Countries depend on Economic assessment

Other mode of assessment of appropriateness

Firm level Limited to monetary cost-benefit

assessment (quantitative) that will isolated from socio-cultural, technical and regional environment (subjective)

Economic, social, environment and anthropocentric factors often excluded

Lacking of guidelines and non-quantifiable factors

Shortage of data and information Rely on quantitative data input