Slides of MOT

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Technological change

Number 01 slide


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Technological change

Technology may be defined as a systematic application of scientificknowledge to practical task. Basic feature of it is change. Technologicalchange leads to new product and process, and destroy the existing order orstatus quo. It is creative destruction.

Technological changes include both innovation and diffusion. Innovationbrings in new ideas in the forms of product and process that invariablyreplace existing ones.

Diffusion takes place when a firm adopts new ideas from others. It

abandons the existing way of doing things in favor of new the ideas, thepractice and the tools that it has borrowed from its environment.

Technologies changes produce four consequences:-


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New products represent arguably the most visible battleground inthe market place.

Product improvements through incremental and modular

innovations, architectural innovation that open up new marketsegments, the of radically new products that render existingproduct obsolete.

Product improvements have helped firms extend the market of

their products. Industries sin the mature stage can often berevived by an infusion of newer technologies into their products.Mechanical watch is converted into digital watch is an example.


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Architectural innovations: They provide opportunities to servepreviously untapped market segments and enable firms to changetheir competitive positions.

Technological innovation: Technological innovation sometimesgenerate totally new products.

Technology integration: Technology integration or the opportunityto develop new products and process by synthesizing a set ofexisting technologies often leads to convergence. For example,convergence is now taking place in the computer.Telecommunication and entertainment business.


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Technological changes enable firms to reconfigure their

value chains, thus influencing the cost and speed of doing

business. There are two ways in which value chain are

transformed-


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Automation:Automation refers to the replacement of laborwith less expensive capital intensive technologies. Capitalintensive machineries replace blue collar job in thedeveloped countries. Information technology helps firms to

reduce layers of management.

Superior processes: Firms reconfigure their value chains byintroducing superior process into their operations. Superior

processes may evolve from technology progression ortechnology evolution. Some of the processes are TQM, Leanproduction systems, JIT,etc.


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Value constellation of firms are upset by technological

development in three ways:

Shifting Balance of Power

Potential for Outsourcing

Different Ways of Managing Value Constellation


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Change in Value Constellation..

Shifting balance of power: Technological developments shift

balance of power between firms and their suppliers and distributors.

Potential for outsourcing: As a result of market forces and thestandardization o production processes, firms are discovering the

opportunities to outsource many activities that had previously

conducted in-house.

Different ways of managing value constellation: Widespread

adoption of IT is enabling firms to better plan and manage their

supplier and distributors relationship.


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Products and processes innovation are two means by which the competitive game is

played and won.

These innovations enable firms to erect entry barriers to competitors, to bring about

product and process substitutions and to redefine the rule of competition.

Barriers to entry may include patents, economies of scale, brand loyalty, etc.

Product and process substitution. Technological change may contribute to product

substitution and product differentiation. Word processor has replaced typewriters.

Process innovation in raw ,materials may enable firm to enhance its competitive

position. CAD, automation have reduced cost and quality advantage of many firms.


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Number 2: slide


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Role of 'Transnational Corporations

(TNCs) in Transferring Technology to

Developing Countries: An Overview

AndThe Role of technology parks in

Facilitating technology transfer


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INTRODUCTION

Technology is the master key for

economic development. It is a tool for

deriving benefits from nature as well as

giving Competitive edge to a nation

Ayres (1991) has referred to technology

as the "wealth of nations".

Transfer of technology (TV) can take

place within the national Boundaries

and also internationally


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INTRODUCTION

In every case there must be a

transferor, a transferee and some

vehicle for transfer

Many direct and indirect linkage have

been used to transfer technology from

the developed to developing countries

. TNCs are the real owners of modern

technologies.


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INTRODUCTION

They have the capital, trained

personnel and managerial

capability to transfer technology,

tap the international money market

and to integrate the developing

countries into the world economic

structure.


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TNC's and Developing Countries

The attitudes of governments of the

developing countries towards TNCs have

been dramatically changing since 1980s

TNCs as agents of Imperialism or new-

colonialism


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Motivation for Transfer of Technology By

TNC

Increasing return on R&D investment

Obtaining additional earnings fromtechnologies whose period of competitive

advantage in primary home market is over. Taking advantage of lower cost of production

in developing countries and thereby

maintaining competitiveness in worldmarkets.


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Motivation for Transfer of Technology By

TNC

Gaining access to market with projectionistbarrier.

Reinforcing technological dependency.

Avoiding the economic risk associated withoperations in unknown environment in aforeign country and taking advantage of a

local firm knowledge of market condition


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Motivation for Technology Transfer by

Developing Countries

Technology is a tool for nationaldevelopment

Most developing countries facetremendous hard currency shortage fromservicing their foreign debt

Bangladesh spends 22% of its nationalincome for the payment of interest offoreign debt


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Motivation for Technology Transfer by

Developing Countries

The TNCs are providing new technologies,management skills and marketing knowledge.

TNCs help the developing counties in

enhancing their export performance They can avoid R&D cost

TNCs can solve the unemployment problem of

developing countries.


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Effectiveness of technology Transfer

through TNCs

The Process of effective technology transfer does not

end with the acquisition of technologies.

Additionally it implies the assimilation and diffusion

of technologies in host countries as well as thedevelopment of local capacities for adaptation and

innovation.

An evaluation of the effectiveness of technology

transfer through direct foreign investment (FDI) and

via non-equity forms


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Foreign Direct Investment and Technology

Transfer

Technology transfer through FDI concerns the

transfer of skill- training program

Investment in new enterprises

TNCs undertake programs which include -

courses and training workshops on

management techniques, quality control,

engineering and computer application


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Foreign Direct Investment and Technology

Transfer

R&D activities are undertaken by TNCs in the

host country.

TNCs do some R&D activities for adapting

products to local market conditions and

controlling quality. Primarily taste, different

standard, and sometimes government

requirements are the main factors which ledto local modification


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The channels of international technology

transfer

The first is a direct transfer of technology

via international licensing agreements

Second is a foreign direct investment

Third channel of technology transfer is

through international trade, in particular

imports of intermediate products and

capital equipment


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Sources of Technology Transfer in the

Global Economy

Kokko (1992) identifies at least four ways that

technology might be diffused from foreign

investment enterprise (FIE) to other firms in

the economy: (1) demonstration imitationeffect, (2) competition effect, (3) foreign

linkage effect, and (4) training effect.


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Sources of Technology Transfer in the

Global Economy

R&D can be thought of as having two complementaryeffects on firm's productivity growth (Cohen andLevinthal 1989).

First, R&D directly expands firm's technology level bynew innovations, which is called innovation effect.

On the other hand, it increases firm's absorptivecapacity ability to identify, assimilate and exploitoutside knowledge, which is usually called learningor absorption effect.


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Non-Equity form of Technology Transfer

A licensing agreement often is a prerequisite for

obtaining the necessary manufacturing and problem

facilities from the parent company

Licensing arrangement have excellent possibilitieswhen the license (developing country) has achieved

a certain level of industrial experience and

sophistication, when local infrastructure is adequate,

and when the available markets are large enough torecover investment


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Non-Equity form of Technology Transfer

Due to severe imperfection in technology

market, the supplier TNCs often seeks to

impose a lot of restrictions in order to

maintain oligopolistic power and to limit thescope for assimilation and diffusion of

technologies within the host countries


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THE ROLE OF TECHNILOGY PARKS IN

FACILITATING TECHNOLOGY TRANSFER


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What is Technology Park?

What is technology transfer?

How technology is transferred? How technology is transferred through

technology parks?

Concluding remarks and suggestions?


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Technology Park

The idea for a Technology Park in Create dates

back to 1988, when it was first nurtured by

key individuals in FORTH (Foundation for

Research and Technology- Hellas), one of themost respectable research institutes of the

country, well known all over Europe in the

scientific circles.


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Technology Park

Technology Park is a landscaped developmentusually comprising of high specification officespace as well as residential and retail

developments, designed to encouragelocalization of high technology companiessuch as information technology, softwaredevelopment etc., thereby giving each the

benefit of economies of scale.


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Technology Park

Technology Park is to carry out the innovation process andlocation advantages to commercialize the innovation purpose.The phases of innovation process are as below:

Basic research

Industrial research Product and process development

Early proto type or pilot plan

Interim manufacture

Full manufacture Commercialization.


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Technology Park

Furthermore, a technology park provides theservices to carry out the innovative activities such as:

Education and training

Information Patenting and licensing

Entrepreneurial services

Commercial promotion

Financing and venture capital.


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Relationship and Differences of Technology Park or Science

Park, Innovation center and Business Incubation

Science park

Innovation center

Business incubation

BUSINESS DEVELOPMENT

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A science park is a property based

initiative which:

Has formal and operational links with a University orother higher educational and research institutions(HEI).

Is designed to encourage the formation and growthof knowledge based and other organizationsnormally resident on side.

Has a Management function which is actively

engaged in the transfer of technology and businessskills to the organizations on site.


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There are two principal forms of academicscience park link at the level of the

individual park enterprise (quoted fromQuntas 1992) such as:

The establishment of spin-off firms,formed by academic staff taking researchout of the laboratory and into the sciencepark, starting their own commercialenterprise.

The occurrence of research linksfacilitating technology and knowledgetransfers.

Research oriented technology parks


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Research oriented technology parks

include:

Science parks

Technology parks/technopoles

Innovation center

Re4search center

Innovation plaza


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Business oriented technology parks

include:

Business incubators

Business parks

Industrial parks


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Distinguishing between knowledge

transfer and technology transfer

. Knowledge transfer implies a broader,

more inclusive construct that is directed

more toward understanding the "whys" forchange. In contrast, technology transfer is

a narrower and more targeted construct

that usually embodies certain tools forchanging the environment.


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Distinguishing between knowledge

transfer and technology transfer

. Specifically, firms with more mechanisticstructures and more stable direction-oriented

cultures were associated with higher levels ofknowledge transfer. Conversely, firms with moreorganic structures, more flexible change-oriented cultures, and more customized

university policies for IPR, patent ownership, andlicensing were associated with higher levels oftechnology transfer


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Technology transfer

TechnologyTransferor

Technology TechnologyTransferee


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Technology Transfer Basics

Protection is key to technology transfer

By generating licensing and royalty revenues

Commercialization

The aim of technology transfer is to providethe educational, advisory, and financialresources to help you in this regard


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Intellectual Property Protection

The two most common forms of intellectual

property protection are patents and copyrights

. Patents are used to protect devices, materials,

processes, and improvements to any of these. Copyrights are exclusive rights granted by a

government for a limited time to protect the

particular form, way or manner in which an idea or

information is expressed.


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Intellectual Property Protection

To transfer intellectual property through

royalty bearing licenses, rather than patent

title assignment

The two major factors determining the

licensing decision are: (1) what kind of

licensing is most likely to lead to rapid

commercialization; and (2) what kind oflicensing is in the public interest


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Mechanisms of technology transfer

Ramanathans (1995) classification seems to

be more appropriate. He classified this

mechanism into two types- 1. Pure external

acquisition mechanism and 2. Alliance basedacquisition mechanisms. Later (1997) he

classified it into two categories such as Market

oriented mechanism and Non-market orientedmechanisms


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Market Oriented Mechanisms:

Purchase of plant, equipment and products

Direct foreign investment

Joint ventures

Technical collaboration: 1. Licensing, 2. Technical agreement,

3. engineering and construction agreements. Subcontracting

Turnkey contracts

Product-in-hand contracts

Management contracts

Product sharing

Joint research ventures

Expert services


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Non Market Oriented Mechanisms:

Books, academic journals, business magazines etc.

Sales literature

Technical information services

Industrial fairs and exhibitions

Informal personal contracts

Participation in conferences, seminars and workshops

Training


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How technology is transferred through

Technology Park?

The following section will be discussing various activities/particulars ofvarious types of technology parks and the way/means by whichtechnology may be transferred.

Business oriented technology park

Business incubator

Activities/Particulars:-To help (business support services) small businessto start up in the most favorable environment. Business development ispriorityMinimum entry capital is requiredIs useful with the priority ofbusiness development while research applications are secondaryGrowinginfant companies are housed here

Technology transferred through:-Employment/creation ofjobsTrainingClerical & administrative helpBusiness assistanceInformation

gathering


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Business Park

Activities/Particulars: Growing companies

are housed here, Focus is on good

environment of office light manufacturing

& business support services

Technology transferred through: Business

support services,

Interactions,Information exchange


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Industrial Park

Activities/Particulars: Mature & decliningcompanies are housed here, Associated

with traditional production service &

distribution system, Not well suited to awide range of high technology activities.

Technology transferred through: Support

services, Information exchange &interactions.

Conclusion


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Conclusion.The above analysis shows that technology park is useful intransferring technology. The study also shows that technologyparks are only useful for small and medium sized enterprises.Due to enough technological capabilities, big companies arenot interested to establish business ventures in these parks.TP is very much helpful for the start-up companies. Due to thedifferences in the nature of parks, the services provided there,are also different. Technology parks may be classified into twotypes such as business oriented technology parks andresearch oriented technology parks.

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