Technology Acquisition & Transfer
By
Dr. Vijay Kr. Khurana
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
What is Technology Acquisition ?
Two terms technology transfer and technology arenormally . used interchangeably “ ” The verb Acquire means
• ; ’ To come into possesion of get as one s own• ’ To gain for oneself through one s actions or
effortsTechnology Acquisition is the process of acquiring a
new technology, new product, process or service ; by efforts of an individual or an enterprise or any other macro entity. This process can be conducted either internally or externally to the enterprise.
Types of Technology Transfer • , Scientific Knowledge Transfer Direct
, - Technology Transfer Spin off TechnologyTransfer
• Informal Technology Transfer & Formal Technology Transfer
• Internal Technology Transfer & External Technology Transfer
Internal Technology 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 technologyproducts?
• 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 e ffective 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 firm
1. / / Planning new products services processes to – be offered planning must incorporate voice of the customer & user needs
2. , – Screening new products processes or services / only viable feasible items be offered as only one
4/5 .out of becomes a commercial success3. – Initiating development process must be
properly designed and carried out so that it . facilitates success Enterprises should
a. Consist of temporary system capable of adapting to dymanics of change
b. Organize the systems around problem solving
Steps in Internal Technology Acquisition by a firm
c. Have flexible management system & replace rigid management system
d. Use multi- .functional teamse. Proper int , egration 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 Transfer 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
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 oftechnology
• / 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 providers 3. Short listing / selecting suitable technology
providers on the basis …. Cultural compatibility, compatibility of core competences, appropriateness of technology, technical feasibility etc
4. 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 posi tive
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
Regulation of Technology Transfer By Nation
• 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?
Technology Acquisition & Transfer
By
Dr. Vijay Kr. Khurana