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TA_IBM
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.
TA_IBM
- 1. TECHNOLOGICAL ADVANCEMENTS IN I.B PRESENTEDBY: PRASHANTH KUMAR BHARGAV SEERAM RISHIKA SHETTY RAKHI AIL ERROL 1
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- 3. Firms are Compelledto 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. 3
- 4. Technological Advances asa 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 4
- 5. Communications Technology • Especiallyimportant. 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 5
- 6. Societal Consequences ofMarket 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 6
- 7. Technology Transfer • Atechnology 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 7
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- 9. Knowledge Management Patents & Licenses Technology Transfer TechnologyAcquisition Skill Development - Know How Technology Adaptation Dissemination Forms Phases Increases Production Efficiency - Long Term Competitiveness Of SME’s 9 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 11
- 11. Channels of TechnologyFlow • Public Dissemination • Reverse Engineering • Purposeful Acquisition • Licensing • Franchise • Joint Venture • Turkey Project • Foreign Direct Investment • Technological Consortium & Joint R&D 12
- 12. Technology Consortia • SomeEuropean 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 13
- 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 14
- 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 15
- 15. Technology Competitiveness inDeveloping 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 16
- 16. Technology Competitiveness inDeveloping 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 17
- 17. Technology Competitiveness inDeveloping 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. 18
- 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 19
- 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 20
- 20. The macro viewof 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 21
- 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 22
- 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 29
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- 24. Transfer Price: Whatand 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. 31
- 25. Transfer Price: Whatand 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. 32
- 26. Factors Affecting TransferPricing • Internal factors: Performance Measurement and Evaluation • External Factors: • Accounting Standard • Income Tax • Custom Duty • Currency Fluctuations • Risk of Expropriation 33
- 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 34
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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 36
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