This document discusses technological advancements in international business and technology transfer. It covers the following key points: 1. Firms are compelled to internationalize due to globalization and technological advances that reduce costs and enable small firms to operate globally. Advances like the internet open up global markets. 2. Technology transfer involves transferring technologies developed by one organization to other entities to exploit its potential benefits. It discusses different forms and phases of technology transfer. 3. Developing countries face challenges in technology competitiveness like lack of indigenous innovation, inadequate infrastructure and skills, and difficulties acquiring and adapting new technologies due to costs and rapid changes. Effective technology transfer can help address these issues.

1. TECHNOLOGICAL
ADVANCEMENTS IN I.B
PRESENTED BY:
PRASHANTH KUMAR
BHARGAV SEERAM
RISHIKA SHETTY
RAKHI AIL
ERROL
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2. 2
THE SHRINKING
GLOBE

3. Firms are Compelled to Internationalize
• In today’s business setting, interest in the profitable exploitation
of a firm’s technological assets, through technology transfer, has
intensified.
• Firms implement internationalization proactively are more
successful than those reactively engaging.
• E.g., Vodafone has established production and marketing
operations all around the world. Has some 200 million customers
in 30 countries.
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4. Technological Advances as a
Driver of Market Globalization
• Advances in technology provide the means for internationalization
of firms
• Advances in technology:
• Reduces cost of doing international business;
• Enables even small firms to go international
• Helps coordinate worldwide activities;
• Mitigates geographic distance
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5. Communications Technology
• Especially important. Includes telecommunications, satellites,
optical fiber, wireless technology, and the Internet.
• The Internet, and Internet-dependent systems such as intranets,
extranets, and e-mail, connect millions of people across the
globe.
• The Internet opens up the global marketplace to all firms, large
and small
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6. Societal Consequences of Market
Globalization
• Positive consequences
• More jobs
• Economic development and growing prosperity
• Technology and knowledge transfer
• Negative consequences
• Natural Environment
• Disruptive effects in national economies
• Human rights violations abroad (e.g., sweatshops)
• Job losses at home
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7. Technology Transfer
• A technology developed by an organization for a particular
purpose was further given to other entities in order to exploit its
potential in some areas.
• A transfer/ transformation/ transition process between the
technology originator/ possessor and the receiver
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8. 8

9. Knowledge
Management
Patents &
Licenses
Technology Transfer
Technology Acquisition
Skill Development - Know
How
Technology Adaptation
Dissemination
Forms
Phases
Increases Production Efficiency - Long Term Competitiveness Of
SME’s
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Technology Transfer

10. The Transferring Level
• International — From the DCs to NICs or LDCs
• Regional — Indigenous vs. Foreign
• Industrial — The threat of outsiders
• Corporation — Licensing program
• Internal — The issue of transferring price
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11. Channels of Technology Flow
• Public Dissemination
• Reverse Engineering
• Purposeful Acquisition
• Licensing
• Franchise
• Joint Venture
• Turkey Project
• Foreign Direct Investment
• Technological Consortium & Joint R&D
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12. Technology Consortia
• Some European technological development consortia coordinated by
EC/EU
• RACE (Research in Advanced Communication in Europe)
• ESPRIT (European Specific Programs of Information Technology)
• JESSI (Joint European Submicron Silicon program)
• EUREKA (European Research Coordination Agency)
• Airbus (Mercedes-Benz & British Aerospace, etc)
• ITC consortia for developing and marketing of IT & communication
technologies
• The term of fair and non-discrimination licensing for necessary patents
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13. International Technology Transfer
• Global sourcing was encouraged not only by trade liberalization
but also by technological developments which reduced trans-
port costs.
• Competitive Collaboration, each company's participation spreads
the costs and risks both of developing new technologies and of
combining existing technologies to develop new products
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14. International Technology Transfer (cntd)
• In the initial phases of development, much of the R&D undertaken
in Japan was absorptive, aimed at integrating foreign technologies
• Countries such as Mexico, Brazil, India, and China view foreign
direct investment FDI by firms from technologically advanced
countries as a vehicle of technology transfer
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15. Technology Competitiveness in Developing
countries - Factors
• Technology Imports
• Small number of developed countries provide most of technological
innovations. Most of the developing countries are neither innovating nor
adopting.
• Lacks capability to create globally competitive technologies
• Lack of access to information on new technologies and innovations
• Technology Infrastructure
• R&D institutes and testing facilities in developing countries fall short of
quality when compared to industrialized countries
• Lack of collaborative research
• Isolation of universities and R&D from Industry
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16. Technology Competitiveness in Developing
countries - Factors
• Pace of Technological Change
• SMEs lack the capability to constantly upgrade technologies in view of
rapidly changing technologies in developed countries
• Easier in Process industries
• Technology Acquisition
• Unit level technology absorption is low
• Lack of incentive, direction and capability to update existing technologies
• Lack of ready access to capital
• Relatively high transaction cost
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17. Technology Competitiveness in Developing
countries - Factors
• Unit Level Interventions
• Smaller firms find difficult to finance and coordinate the requisite
level of technological activity
• Low participation in network of organizations and institutions
involved in diffusing information on technologies. (specially SMEs)
• Availability of Skilled Manpower
• Shortage of trained personnel
• Lack of continuous capability development of manpower in technical
dimensions
• New technologies are not adopted due to lack of skilled people thus
widening the technology gap.
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18. Technology Transfer – Main Issues
• Slow uptake of technologies that support sustainable
development, despite many initiatives for increased and effective
transfer of technologies.
• Need to emphasize on specific and practical methodologies and
tools for promoting the adoption and use of latest technologies.
• Absence of ubiquitous approach. Need to prioritize initiatives for
developing countries depending on their needs and status.
• Multinationals often transfer older technologies to safeguard
themselves against future competition
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19. Technology Development - Challenges
• Can be met through innovations management
• To be able to invest in technology creation at the risk of failing
• Adequate infrastructure required for technology creation
• IPR issues
• Adequate information relevant to strategic planning and market
development
• Developing countries have already lost precious time
• Creation of useful and usable technologies is a major factor in
ensuring that there is opportunity to make informed and confident
choices in technology investment projects
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20. The macro view of international technology
transfer
• Counterparts
• the private enterprises of developed countries, LDs (transferor), vs. the
governments of less developed countries, LDCs (transferee)
• The transferor
• economic gains of technology by strategically taking the advantage of LDCs
(transferees)
• The transferee
• the governmental interventions for GDP growth contributed from the
expected technology externalities of transfer
• prevent the indigenous resources and employment from being exploited
• The processes of technology transfer are more political than economic
negotiation
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21. Technology Absorptive Capacity
• Resource endowment, people talent, education system, path
dependence, infrastructure/property law/business managerial
practice/social norm
• Appropriate technology—criteria defined by political, social, and
economic development and progress
• Availability of complements: the trade-off between the broadly
low-end and the scarce high-end cluster
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22. Technology Up gradation – Key Focus Areas
Skill upgradation
Capacity building
Technology Dissemination
ICT Applications to Technology &
Management Processes
Market access
Global Benchmarking of Quality
Technology Innovations/R&D
Others
Key
Drivers
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23. Transfer Pricing 30

24. Transfer Price: What and Why?
• Transfer Price means the value or price at which transactions take
place amongst related parties.
• Transfer Price are the prices at which an enterprise transfers
physical goods and intangible property and provides services to
associated enterprises
• Transfer Price gain significance because these can be used by the
controlling party to their advantage to minimize tax incidence.
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25. Transfer Price: What and Why?
• Approximately 60% of the total transactions across the world are
between related parties.
• If the transactions are across different tax jurisdictions, where tax
rates are different, shifting is beneficial.
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26. Factors Affecting Transfer Pricing
• Internal factors: Performance Measurement and Evaluation
• External Factors:
• Accounting Standard
• Income Tax
• Custom Duty
• Currency Fluctuations
• Risk of Expropriation
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27. Transfer Price Regulations
International
• OECD formulated “Guidelines
on transfer pricing”. They
serve as generally accepted
practices by the tax
authorities
India
• The Finance Act 2001
introduced the detailed TPR
w.e.f 1st April 2001
• The Income Tax Act
• AS-18
• Other Relevant Acts
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28. RevenueProfit
CapitalGain
Royalty
InterCompany
ControlSystem
costcentres
revenuecentres
profit/Investmentcentre
IntraCompany
Internal
(Withinthecountry)
Non-Related:
Profit/Dividend/Royalty
ForexFluctuations
Accounting
Related
Profit/Dividend/Royalty
TransferPricing
Forex/Accounting
InterComapny
ControlSystems
ForexFluctuations
Accounting
TransferPricing
IntraCompany
External
(outsidethecountry)
Transactions
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29. Uses of Technology
• Manufacturing, Health Care, Services
• Improves GDP/ NI; Modernization
• Development of IF & Villages
• Entertainment
• R&D
• Studies
• Tracking & Monitoring; Detection
• Increase in Employement
• Increases Reln with other Countries
• Forecasting
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30. THANK YOU 37