The document discusses various perspectives and aspects of technology diffusion and absorption in India. It outlines the steps involved in technology acquisition, absorption, and improvement. It notes that while India has made efforts to absorb imported technologies, challenges remain such as lower production scales, lack of focus on absorption, and minimal R&D involvement. It provides recommendations to strengthen absorption efforts through various initiatives.

2. One of the many ways
to acquire technology
is to buy/obtain it from
sources within or
outside the country.
Technology Acquisition

3. Once a technology is imported
from another country, it needs
to be absorbed and updated in
accordance with the local
requirements.

4. Technology Absorption

7. Project
Formulation
Project
Execution
Technology
Adoption
• Prefeasibility
report/project report
• Technology
negotiations
• Approvals/clearances
with Government
• Foreign collaboration
agencies
• Funds from financial
institutions
• Land Acquisition
• Clearances from State
Govt. and other bodies
for power etc.
• Technology Transfer.
• l Design/know-how,
experts, training
• l Use of Indian
consultants
• l Procurement of
equipment, components
and materials.
• l Payments for
technology, RM, and
equipment.
• l Project
implementation.
• Trial runs
• Debottlenecking
/rectifications
• Production based on
selective imports of
components/RM
• Indigenization of RM/
components,
equipment
• Adjust
product/process
technology to suit local
conditions.

8. Technology
Absorption
Technology
Improvement and
Upgradation
• Analyze and unpackaged
technology
• Investigate
product/process designs
and technology.
• Optimize technology for
higher quality and
performance.
• Design; develop
components/raw
materials/equipment.
• Use research linkages.
• Improve
product/process designs
and technology for
better
performance/utilization.
• Use Research linkages.
• Upgrade
product/process to
reach larger
scales/capabilities.

9. Know-how: Consists of software documents and
allied knowledge-based services to assist an
enterprise to undertake manufacture.
Know-why: The basic knowledge behind the know-
how. Examples are such as design analysis and
calculations in a product or process development,
metallurgical and engineering design evaluation
information, the 'why' aspects of the documents and
services in transfer of technology, the knowledge on
performance/design parameters, and effects of their
variations in product/process technology.

10. Lower scales of production compared to
international levels, even in areas amenable
to scale sensitive sectors/use of latest
technologies.

11.  Lack of attention to absorption of technology
in the absence of any compulsion to be
internationally competitive.
 Continued access to collaborators on nominal
payments, assured market and inadequate
allocation of resources for R&D have resulted
in insufficient attention for effective
absorption and improvement of imported
technology.

12.  Minimal involvement of R&D personnel in
assessment of technology, further
negotiations and transfer, and transfer 'in
implementation of technology.
 User's preference to imported technology
based products and col1aborator's
guarantees

13. MANAGEMENT OF
TECHNOLOGY ABSORPTION
Accelerated indigenization improvement of raw
materials/ components/ sub-systems through speedy
R&D efforts with vendors/ ancillaries.
 Basic investigations and projects in research, design
and engineering, .encompassing process/ product
design analysis/ optimization/ improvement, product
designs for higher ranges/new applications, exports,
process design and engineering for higher volumes
and exports.
 Analysis and improvement of designs and
development of tailor-made production equipment.
Demonstration of improved/higher range of products/
equipment of the users

14.  Use of qualified and experienced
engineers/scientists.
 Skill improvement by training/ continuing
education in institutions/ research
organizations in the country or abroad.
 Updating and augmenting of existing R&D
facilities with 'state of the art' facilities to
take up sophisticated investigations.
 Use of cooperative, national or international
R&D facilities for basic R&D investigations in
industry.

15.  Repeated collaborations for the same product/ process are
avoided.
 Acquisition of further technologies becomes selective.
 Ability is developed to unpackage technology.
 Savings can be affected in foreign exchange due to
indigenization/ use of indigenous alternatives.
 Effective utilization is made of available indigenous research
expertise and facilities to achieve the desired results. .
 Know-why and technology upgradation capabilities are built-
up.
 Exports are increased.
 Technically competent groups of scientists and engineers
trained in technology absorption get matured and
strengthened.
 The base for technological self-reliance is enhanced

16. Government has, over the years, directed the industry to take
necessary steps to set up R&D units for upgradation and absorption
of imported technology.
 There is also a stipulation with respect to this in the terms and
conditions of foreign collaborations.
The Government had stipulated that industries using technologies
costing more than a payment of Rs. 2 crores should bring out
comprehensive Technology Absorption, Adaptation and
Improvement (TAAI) plans.
Government had also directed industry to submit annual returns for
technology implementation and absorption. , and more. It is mostly
presented before an audience. It serves a variety of purposes,
making presentations powerful tools for convincing and teaching.
The New Industrial Policy 1991 which has ushered in further
liberalization and consequent easy clearances and procedures in
approval of foreign collaborations. Industrial licensing is not required
except in some identified areas. This is expected to bring about
speedier acquisition and implementation of foreign collaborations.
The Technology Absorption and Adaptation Scheme (TAAS) was
initiated by the Government (DSIR) as a pilot scheme during the 7th
plan. TAAS aims at stimulating and accelerating the efforts of Indian
industry in technology absorption and upgradation

18. TECHNOLOGY
ABSORPTION
EFFORTS: INDIAN
EXPERIENCE
The units should have their own technology policy
for its acquisition, absorption and adaptation, on
long-term as well as short-term basis.
 Travel grants and incentives may be considered for
participation in international seminars/ symposia
etc. as well as for training abroad to keep abreast
with the latest development in their fields. ‘
 The R&D personnel from in-house/national
laboratories 'etc. should be involved intimately in
the transfer of technology from the conceptual stage
itself.
 Incentives and support should be given for
prototype development and testing facilities, pilot
studies etc. for adaptation, absorption and
upgradation of imported technologies. Also, support
for using the services of experts/consultants on
short-term basis may be considered in specific cases

19.  There needs to be a closer interaction amongst in-house R&D
units, national. R&D laboratories, academic institutions, design
organizations and -consulting firms. Also, international R&D
collaborations can be encouraged.
 Information about the acquisition of foreign technologies
should be widely disseminated with a view to making R&D
personnel aware of the needs of the industry. It enables them to
formulate the programs accordingly
TECHNOLOGY ABSORPTION
EFFORTS: INDIAN
EXPERIENCE

20. TECHNOLOGY ABSORPTION EFFORTS:
INDIAN EXPERIENCE
Tax benefits and fiscal incentives may be considered for investments
made in absorption and upgradation of processes/ products.
 In case of fast changing technologies such as electronics, foreign
collaboration agreements should be of shorter durations.
R&D expenditure should be generally 5 to 10% of the annual
turnover of the company, particularly in areas of high rate of
obsolescence.
An information base for modern available technologies on global
basis should be set up.
The development of new products is very expensive and time
consuming. It is generally not economical for the industry because of
the low volume of manufacturing and fragmentation of capacity.
Small/medium industries are not able to do any significant
technology absorption exercises since most of them do not have
their. own R&D facilities in a meaningful way.

21.  Import of technology and know-how is limited to product
design in most of the cases and manufacturing processes are
directly related to the volumes of production abroad. They are
uneconomic for the Indian firm and need be scaled down to
meet the local demands. Consequently, quality and finish may
often suffer.
TECHNOLOGY ABSORPTION
EFFORTS: INDIAN EXPERIENCE

22. TECHNOLOGY
ABSORPTION
EFFORTS: INDIAN
EXPERIENCE
Availability of indigenous materials (such as high
temperature resistant alloys, engineering plastics,
etc) is very poor.
The standards for various products, components
and materials need to be revised and updated on
continuous basis particularly for industries like
automobiles.
A complete documentation of all the national
research facilities may be compiled with regard to
their activities and developments carried out by
them. Such . documents should be periodically
updated and transmitted to the industry, other
national laboratories and R&D centres.
A periodical review meeting of the R&D chiefs of
the industrial units to discuss technol

23.  Incentives should be given to firms for adhering and following
a faster phased manufacturing programme as specified in the
collaboration agreement. A useful index could be "net foreign
exchange savings" year to year over the duration of the
project.
 A time-bound programme for absorption and adaptation of
imported technology should be drawn by the company
immediately after the collaboration agreement.
TECHNOLOGY ABSORPTION
EFFORTS: INDIAN
EXPERIENCE

24. It facilitates process of technology transfer by
acceptance of innovation on wider scale, for
better returns, to the owner or supplier of
technology.

25. is more relevant to publicly funded R&D
organizations and academic institutions
which are generally engaged in basic and
applied research and which, by
themselves, are not in a position to
commercialize the innovations.

26. Perspectives on
Diffusion
Regulatory/Societal Perspective
Models Perspective
Comprehensive Perspective
Traditional Perspective
Adoption Perspective
Technological Perspective
Infrastructure Perspective

27.  Individual Action
 The diffusion process begins with the first stage of innovation the
individual action stage. During the individual action stage, the
inventor proceeds (sometimes without even realizing it) through a
series of steps that result in practical use of an innovative idea. The
innovator may draw on the resources of others, but the effort is
essentially individual. This stage includes eight phases, each of
which contributes to the innovation and diffusion process.
Major Activities Necessary in
Technology Diffusion
Diffusion is a multi-faceted activity.

28. Creation of Favorable Conditions
Identification of Unfulfilled Needs
Definition of the Problem
Preparation for Problem Solving
Incubation
Inspiration
Externalization
Influence
The Eight (8) phases of Individual Action