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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