Internal Technology Transfer-3

Still today we have already discussed on different topic like definition and classification, Channels of technology transfer, technical consortium types of technology transfer methods of technology transfer etc.. As a part of our talk today we continue our discussion on Internal Technology Transfer. The internal transfer of integration of technology is different due to the complexity of the technology being transferred from R & D or applied basic science to the product of production stage of development. Iansiti developed an information process framework, shown in for the development of products based on new innovative capabilities. It shows the informational relationship between research, technology integration, and the product development process. The model serves as a framework for understanding the development process of new technology, which has both a high level of complexity and component uncertainly. 

The process and success of the internal integration or technology transfer are associated with the overall effectiveness of the total enterprise developmental process. The research indicates that more successful enterprises are characterized by a system focused on the integration process. These enterprises emphasize the gathering of accurate information on how the technical factors would impact functionality and cost. This informational gathering is obtained prior to moving the technology from R & D to product development. The problems, which may occur in later stages of product development, are directly lined to the decision in the critical internal technology integration or transfer stage.

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Internal Technology Transfer-2

Deciding which staff members should be involved in the internal technology transfer process, according to Garvin is an element of the process Multifunctional teams composed of the developers and receivers of the technology are the most effective in insuring a smooth transfer. Communication between the various enterprise elements involved in the internal technology transfer process is a critical factor in the decision process. It is important to develop effective communication methods for bridging the cultural, informational and geographic differences that often-separate enterprise elements in an internal technology transfer process. Multifunctional teams with responsibilities throughout the entire project greatly enhance communication. Where multifunctional teams do not exist, there direct transfer of personnel and formal documentation can assist communication. 

The internal transfer of technology differs within an enterprise depending on the nature of the technology being transferred. The internal transfer of integration of technology is different due to the complexity of the technology being transferred from R & D or applied basic science to the product of production stage of development. Iansiti developed an information process framework, shown in for the development of products based on new innovative capabilities. It shows the informational relationship between research, technology integration, and the product development process.

Internal Technology Transfer-1

In large enterprises, technology is not often developed, produced and introduced through only one organizational element. This is changing through the use of multifunctional teams. However, the movement of a technology from an R & D team to manufacturing and then to marketing is a very complex process. The actual process of transferring technology within the enterprise involves a number of decisions. One of the decisions is on timing i.e., when the technology is ready to move from research and development to production and finally to market.  

The competing concerns for making this decision include customer needs, i.e., when are the technology at a stage to meet the customer requirements? The timing decision also depends on development of specifications and operating parameters that are sufficiently detailed to ensure efficient, repeatable production. Timing is a function of preemption of competition. A late market introduction can have significant adverse effects on technology profitability; however, premature release can also have major adverse impacts. The timing of internal technology transfer is critical. 

Location of technology transfer is a critical decision factor, which includes whether the new technology should reside in an existing or new portion of the enterprise.

We continue our discussion our next post. 

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Methods of Technology Transfer-2

In our previous post we have talked about Informal Processes and today still we continue our talk on Informal Processes and also we will talk on Formal Processes. In some instances the knowledge of genetic code had been placed on-line in electronic media such as the Internet only to be patented by others. The process of training scientists in academic research institutions is another informal method of technology transfer. Acquisition of critical technical personnel is another informal method of technology transfer. While intellectual property can be protected, it is very difficult to protect knowledge and skills which key technical personnel have encoded within them. While employee agreements can preclude direct competition, in practice it is very difficult to enforce, especially if the personnel move to another country, taking the knowledge with them. 

Formal Processes 

The formal processes of technology transfer are generally process-embodied or person-embodied transfer within an overarching organizational framework. These processes include outright procurement of a technology though its sale, licensing or acquisition of the enterprise tin which the technology is embedded. Another formal process of technology transfer is through formal agreements between governments, enterprises, individuals, research entities such as laboratories, and academic institutions. In this instance, formal legal arrangements are made, such as joint ventures, R & D consortia, co-operative agreements and other legal instrumentality.

Methods of Technology Transfer-1

As our talk in technology transfer today we are going to discuss on methods of technology transfer. There are number of methods for transferring technology, both informal and formal. First we understand about the Informal process then we will understand the Formal process. The formal processes are those which use legal arrangements between the participants in the transfer process. The informal processes include the transfer of technology either with ore without the transferee’s knowledge or formal recognition that this knowledge is or has been transferred.

 

Informal Processes

The informal processes of transferring technology include technical information exchange though published matter, either printed or by electronic media, meetings, symposia and individual exchanges. In this process the originator of the information makes the technical information available through professional meetings, journals, articles, electronic exchange, and informal meetings and personal communication. Technologists have sometimes inadvertently exchanged valuable and sensitive technical information, which has led to competitors capturing economic rents that rightly belonged to the initiator of the information exchange. In some instances the knowledge of genetic code had been placed on-line in electronic media such as the Internet only to be patented by others. Some time working group want to transfer their work environment also with which they are working. Working group want to transfer same interior design with the same vertical window blinds.

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Types of Technology Transfer

Scientific Knowledge Transfer 

Scientific knowledge transfer is traditionally associated with research and development activities, and involves the transmission of knowledge gained through research. This type of transfer is most prevalent in the area of basic research and development. Knowledge transfer is accomplished primarily through information exchange and presentations of technical papers at scientific meeting and symposia. 

Direct Technology Transfer

Direct technology transfer occurs between:

·         Enterprise elements, i.e., internal integration

·         Enterprise to enterprise

·         Government to enterprise

·         Government to government

Direct technology transfer usually occurs through formal

arrangements. 

Spin-off Technology Transfer

Spin-off transfer occurs when technology developed by one enterprise, in one technical area, and usually for one purpose, is applied and used for a different purpose in a different technical area of market application than those foreseen at the time of the research and development was originated. The United States government has introduced numerous programs and expended considerable resources to commercialize various technologies originally developed for specific governmental and military purposes. Each type of technology transfer has a number of factors, which must be considered. The advantages achieved through technology transfer also have associated risks and disadvantages. The transfer of technology can occur in any of the various stages of technological development and utilization shows the stages of the technology transfer process.

Technical consortium

Here, two or more entities collaborate in a large venture because the resources of one are inadequate to affect the direction of technological change. Typically this type of venture takes place between two countries or two large conglomerates. For example, a consortium was formed between France and England to develop a supersonic place (the Concorde). Both nations needed to combine their technical and financial resources to develop expensive technology and, in the meantime, to compete with their rivals in the United States. Several similar ventures and consortia exist under the auspices of the European Union (EU). EU supports include “Race”, a project to advance communication technology; “Espirit”, for information technology; and “Jessi”, to bolster semiconductor research. Project “Eureka” is an independent research program involving 24 nations.  

All these cooperative projects are aimed at advance research, develop technology, and transfer knowledge to participating member states. The Japanese government, through its Ministry of International Trade and Industry (MITI), fosters alliances between industry and government in projects of national interest and scope.  

Examples include the VLSI project undertaken to make the Japanese semiconductor industry competitive and the Fifth Generation project, which focuses on advancing artificial intelligence and parallel processing. American industry has also changed some of its ways of doing business, moving from a continuous-competition and closed-technology mode of operation to a more flexible, cooperative mode. Examples are the cooperation between IBM, Apple, and Motorola to produce the power chip for the personal computer; between Microsoft and NBC to tap into the future of the multimedia industry; and between Apple and Microsoft to exploit each other’s strength in technology.

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Channels of Technology Transfer-3

Today we will discuss on Turnkey project and Foreign direct investment as a part of Channels of Technology.

d. Turnkey project 

A country buys a complete project from an outside source and the project is designed, implemented, and delivered ready to operate. Special provisions for training or continued operational support may be included in the agreement between the parties. Engaging in a turnkey project is equivalent to buying or selling a machine but on the scale of an entire plant. Most innovative firms would not sell a plant or license technologies that they intend to exploit themselves. 

e. Foreign direct investment (FDI) 

A Corporation, usually a multinational, decided to produce its products or invest some of its resources overseas. This permits the transfer of technology to another country, but the technology remains within the boundaries of the firm (i.e., is still controlled by the firm). This type of investment has advantages for both the investor and the host country. The investor gains access to a labor force, natural resources, technology, or markets. The host country receives technological know-how, employment opportunities for its people, training for the workforce and investment capital that adds to the development of its infrastructure. The host country will also get tax advantages, since most employees will be contributing to the local economy. The multinational may also gain a tax advantage by locating facilities offshore in a country or territory that gives a tax break. Many U.S. Pharmaceutical companies have located facilities in Puerto Rico because of the tax advantage they can get with this arrangement. Some developing countries provide long-term tax relief for foreign companies located on their soil.

Channels of Technology Transfer-2

Planned Channels

The technology transfer is done intentionally, according to a planned process and with the consent of the technology owner. There are several types of a agreements that are used to effect planned transfers. They permit access to, and use to, technological know-how:

1. Licensing
2. Franchise
3. Joint venture
4. Turnkey project
5. Foreign direct investment (FDI) 

a. Licensing     

The receiver purchases the right to utilize someone else’s technology. This may entail an outright purchase or a payment of an initial lump-sum amount plus a percentage of sales. 

b. Franchise

This is a form of licensing; however, the source usually provides some type of continual support to the receiver, for example, by supplying materials marketing support, or training. This channel is commonly used in food chains and service organizations, such as McDonald’s, Burger King, and Pizza Hut.

c. Joint venture

Two or more entities combine their interests in a business enterprise in which they can share knowledge and resources to develop a technology, produce a product, or use their respective know-how to complement one another. They also share in the rewards of the venture. International joint ventures are frequently used by recipients to acquire technology and by sources of technology to gain access to local markets and distribution skills. 

We will discuss on Turnkey project and Foreign direct investment (FDI) in our next post.

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Channels of Technology Transfer-1

Technology is intangible. It flows easily across boundaries of countries, industries, departments, or individuals, provided that the channels of flow are established. There are three types of channels that allow the flow of technology. 

General Channels

The technology transfer is done unintentionally and may proceed without the continued involvement of the source. Information is made available in the public domain with limited or no restrictions on its use. This information is harnessed by users and applied to their purposes. Channels of this type of transfer include education, training, publications, conferences, study missions, and exchange of visits. 

Reverse Engineering Channel

Other channels in which the transfer occurs with no active contribution from the source include reverse engineering. Here a host, or a traditional receiver of a technology, is capable of breaking the code of a technology and developing the capability to duplicate it in some fashion. This is feasible provided that the host has the knowledge to do this and there is no legal violation of intellectual property rights. For example, a product that is put on the market by company A can be purchased by company B, reverse-engineered, and introduced to the market as a competitor to company A’s product. This is a powerful method for technology transfer. Its limitation is its inability to transfer the developer’s tacit knowledge. Such knowledge is usually gained during the product development process.