Open innovation and technology transfer. Paul Trott's book dissectied.

1. Open
innovation &
technology
transfer-
Chapter 11
AARTI PANDEY

2. Background (Page 380)
1. The industrialised world has seen a shift from labour- and capital-intensive industries to knowledge- and technology-based
economies. As competition has increased in markets throughout the world, technology has emerged as a significant business factor
and a primary commodity. Knowledge, transformed into know-how or technology has become a major asset within companies.
Technology is vital for a business to remain competitive. In rapidly evolving markets, such as electronics and bio-technology, new
products based on new technology are essential. Even in mature markets, new technology is necessary to remain competitive on
cost and quality.
2. With the increasing technological content of many products, many organisations consider internal development too uncertain, too
expensive and too slow for the rapid technological changes that are occurring in the market.
3. These drawbacks can be traced to a more fundamental cause – the increasing complexity of technologies and the increasing range
of technologies found within products. This has led to a shortening of product life cycles with replacement technologies rapidly
succeeding others.
4. R&D in all other business activities is covered progressively by collaborations, partnerships and strategic alliances.
5. Many large firms operate in several technology fields and often are referred to as multi-technology corporations (MTC). It is
extremely difficult and expensive for such corporations to be technological leaders in every technology within their scope. More and
more companies are looking for outside sources of either basic technology to shorten product development time or applied
technology to avoid the costs and delay of research and development.

3. Dominant economic perspective
(381)
1. It was in the 1980s that governments around the world began to recognise the potential
opportunities that technology transfer could bring. This was based on a simple economic
theory. theory. Technology that has already been produced, and hence paid for by
someone else, could be used and exploited by other companies to generate revenue and,
thereby, economic growth for the economy.
2. Pause for thought.

4. Open Innovation(382) (2pages)
1. This chapter illustrates the strong link within the innovation process between the external
environment of the firm and the internal environment of the firm. It examines and explores
knowledge flows within the innovation process.
2. It illustrates how the ‘open innovation’ paradigm builds on previous research and is presented
as opportunities for the management of innovation. It confirms that accessing and utilising
these flows of knowledge is a fundamental part of the innovation process.The process of
accessing and transferring technology, then, is becoming increasingly crucial within innovation
and new product development.
3. the topic of open innovation and concluded that openness seems to manifest itself in two
inbound processes: sourcing and acquiring technology, and two outbound processes, revealing
and selling technology.

5. Closed V/s Open innovation
Process. People. Ideas. IP sharing.

6. The paradox of openness (384)
1. To innovate, firms often need to draw from, and collaborate with, a large number of
actors from outside their organisation. At the same time, firms need also to be focused on
capturing the returns from their innovative ideas. This gives rise to a paradox of openness
– the creation of innovations often requires openness, but the commercialisation of
innovations requires protection.
2. Mutual commitment and trust, together with other relational and environmental
characteristics, can deal with such uncertainty. Valuation of the licenses or agreements
that are used to transfer technology is a very delicate, but crucial, issue in R&D
collaborations

7. Introduction to Technology
transfer (384)
It is true that the technology in question may take a
variety of forms – it may be a product, a process, a piece
of equipment, technical knowledge or expertise or merely
a way of doing things. Further, technology transfer
involves the movement of ideas, knowledge and
information from one context to another.
It is only when information is used by individuals or
organisations that it becomes knowledge, albeit
tacit knowledge. The application of this knowledge
then leads to actions and skills (projects, processes,
products, etc.).
Illustration 11.1

8. Models of technology transfer
(386)
1. Licensing:- Essentially, licensing involves the technology owner receiving a licence fee in
return for access to the technology. Very often, the technology in question will be
protected by patents. The details of each licensing agreement will vary considerably.
Sometimes, the licensor will help the licensee in all aspects of development and final use
of the technology. In other cases, the amount of involvement is minimal. Mutual self-
interest is the common dominator behind most licensing contracts, as it is in other
business contracts. Licensing is the act of granting another business permission to use
your intellectual property. This could be a manufacturing process that is protected by
patents or a product or service that is protected by a trademark or copyright. The licensee
must be careful to evaluate the need for and the benefits likely to accrue from the
technology before making the commitment to pay.

9. 2. Science park model
Science parks are a phenomenon that originated in the United States. The idea is to develop an
industrial area or district close to an established centre of excellence, often a university. The
underlying rationale is that academic scientists will have the opportunity to take laboratory ideas
and develop them into real products. In addition, technology- or science-based companies can set
up close to the university so that they can utilise its knowledge base. In the United States, where
science parks have existed for 40 years, the achievements have been difficult to quantify. Examples
are Stanford University and Silicon Valley, a collection of companies with research activities in
electronics, and the ‘research triangle’ in North Carolina, which has several universities at its core. In
the United Kingdom, one of the first science parks to be established was the Cambridge Science
Park.

10. 3. Intermediary technology models:-
Their role, however, is the same they act as the intermediary between companies seeking and
companies offering technology.
4. Directory model
Companies, such as Derwent World Patents, Technology Exchange, NIMTECH and
Technology
Catalysts, offered directories listing technology that was available for licence. Some
universities in the United States also produced directories of technology available from the
university’s own research laboratories.

11. 5. Knowledge transfer partnership model:-
Previously called ‘the teaching company scheme’, this UK Research Council-funded programme
aims to transfer technology between universities and small companies. This is achieved through
postgraduate training. Students registering for a two-year MSc at a university are linked to a local
company-based research project. The student studies part time for two years with the university,
say two days a week, and the other three days are spent at the company working on the project.
The university provides support to the student and offers other expertise to the company.
6. Ferret models
The raison d’être of DTE was to provide access to MOD technology and generate commercial
revenue. This was achieved through the use of so-called ‘ferrets’, qualified scientists and engineers
who would ferret around for interesting defence technology that could have wider commercial
opportunities. The

12. 7. Hiring skilled employees
8. Research clubs:-
Companies. Collaborate. Exchange ideas. One of the most successful clubs is the M62 Sensors and
Instrumentation Research Club, so called because it originated from a group of companies along
the M62 motorway in the north-west of England.
9. Technology transfer units
10.Consultancy
Very often, they were formerly employed in a research capacity within a large organisation. After
developing their knowledge and skills in a particular area of science, they offer their unique skills to
the wider industry. Consultants are able to offer help, advice and useful contacts to get the
research project off to a flying start.

13. Limitations to technology transfer
The research revealed that, whilst much effort appeared to have been directed at providing
access to technology, little effort had been aimed at understanding the needs of
organisations acquiring technology developed outside the organisation.

14. An organisation’s overall ability to be aware of, to identify and to take effective advantage of
technology is referred to as ‘receptivity’.
This highlights the importance of viewing technology development as a combination of
knowledge, skills and organisations (all embodied in ‘organisational know-how’) rather than
the economist’s view of technology as an artefact to be bought and sold.

15. NIH syndrome
One of the best-known barriers to technology transfer is the not-invented-here (NIH)
syndrome. This is defined as the tendency of a project group of stable composition to believe
that it possesses the monopoly of knowledge in its field, leading it to reject new ideas from
outsiders to the likely detriment of its performance

16. Absorptive capacity
1. They see R&D expenditure as an investment in an organisation’s absorptive capacity and argue that an
organisation’s ability to evaluate and utilise external knowledge is related to its prior knowledge and
expertise and that this prior knowledge is, in turn, driven by prior R&D investment.
2. Inward technology transfer will be successful only if an organisation has not only the ability to acquire but
also the ability effectively to assimilate and apply ideas, knowledge, devices and artefacts.
3. This requires an organisation and the individuals within it to have the capability to: ● search and scan for
information that is new to the organisation (awareness);
● recognise the potential benefit of this information by associating it with internal organisational needs and
capabilities;
● communicate these business opportunities to and assimilate them within the organisation; and ● apply them
for competitive advantage.

17. External scanning without a full understanding of the
organisation’s capabilities and future requirements is likely
to produce much ‘noise’ along with the ‘signal’.
Given the importance of an awareness of external
information and the role of technological scanning and
networking, awareness is seen as the necessary first stage
in the inward technology transfer process
Inward technology transfer,
however, involves more than
identifying interesting
technology; it is necessary to
match technology with a market
need in order to produce a
potential opportunity for the
business. The scanning process
needs to incorporate commercial
scanning as well as technology
scanning so that technological
opportunities may be matched
with market needs

19. Managing inward technology
transfer
In order for inward technology transfer to take place, members of the organisation must
show an awareness of and a receptivity towards knowledge acquisition. Individual learning
involves the continual search for new information of potential benefit to the organisation.