Types of technology transfer & acquisition; Modes of technology transfer; Importance, barriers & steps in internal technology transfer; Importance, barriers & steps in external technology transfer; Management of technology acquisition by a nation;

1. Technology Acquisition &
Transfer
By
Dr. Vijay Kr. Khurana

2. What is Technology Transfer ?
• Technology Transfer is the process by which
technology is disseminated.
• It involves communication of relevant knowledge by
the Transferor to the Recipient.
• It is in the form of technology transfer
transaction which way or may not be a legally
binding contract.

3. What is Technology Acquisition ?
Twoterms technology transfer and technology are
normally used interchangeably.
The verb “Acquire” means
• To come into possesion of; get as one’s own
• To gain for oneself through one’s actions or
efforts
Technology Acquisition is the process of acquiring a
new technology, new product, process or service ;
by efforts of an individual or an enterprise or any
other macro entity. This process can be conducted
either internally or externally to the enterprise.

4. Types of Technology Transfer
• Scientific Knowledge Transfer, Direct Technology
Transfer, Spin-off Technology Transfer
• Informal Technology Transfer & Formal
Technology Transfer
• Internal Technology Transfer & External
Technology Transfer

5. Internal Technology Transfer
Internal Technology Transfer refer to such technology
transfers / investments where control on the
ownership & usage of technology resides with the
transferor.
It is a complex process involving following decisions:
• Timing : When to introduce new technology /
products in the market?
• Location : Where to transfer new technology /
products?
• Multi-functional teams --Which staff members
should be involved in transfer process ?
• Communication methods & procedures – What type
of Communication methods & procedures be
adopted to facilitate transfer ?

6. Barriers to Internal Technology Transfer
• R & D goals are not known to Production Department.
• Difficulties in stopping current production to test
new products / processes
• R&D Department does not understand needs &
capability of Production Department.
• In general, Production Department is resistant to
innovation and is bound by routine.
• Non-linkage of new technologies to marketing /
customer needs.

7. Overcoming Barriers to Internal
Technology Transfer
• Top management support and participation in the
transfer process
• Providing supportive organizational culture
• Use of multi-functional teams in the transfer
process
• Ensuring effective communication in the organization
• Bringing R&D closer to production.
• Rotation of few person between R&D and production
• Linking & participation of marketing elements in the
transfer process.

8. Steps in Internal Technology Acquisition by
a firm
1. Planning new products / services / processes to be
offered – planning must incorporate voice of the
customer & user needs
2. Screening new products, processes or services – only
viable / feasible items be offered as only one out of
4/5 becomes a commercial success.
3. Initiating development process – must be properly
designed and carried out so that it facilitates
success. Enterprises should
a. Consist of temporary system capable of adapting to
dymanics of change
b. Organize the systems around problem solving

9. Steps in Internal Technology Acquisition
by a firm
c. Have flexible management system & replace rigid
management system
d. Use multi-functional teams.
e. Proper integration between R&D, Production &
Marketing sub-systems
f. Ensure effective communication
4. Carrying out trial production on small scale and test
marketing
5. Improving design & production processes based on
experiences / feedback
6. Commercialization i.e. mass production & sales

10. External Technology Transfer
• In these transfers, control on the ownership &
usage of technology usually does not remain with
transferor and it passes on to the recipient, like
joint venture with local control, licensing agreement
etc.

11. External Technology Transfer
Successful external technology transfer depends upon
following factors:
• Type of the technology being transferred
• Complexity of the technology being transferred
• Transfer mechanism selected
• Relationships between the parties – building of
mutual trust
• Core competencies of the parties & compatibilty
thereof
• Organizational culture of the parties & mutual
understanding thereof

12. Methods of External Technology
Transfer
• Co-operative & collaborative ventures / strategic
alliances
• Licensing agreements
• Contracting agreements
• Enterprise acquisition.

13. Why External Technology Transfer
• Technology already developed saves time & efforts
• Sometimes Growth objectives or competitive goals
cannot be reached through internal development
• Lack of risk taking ability for innovations
• Lack of internal resources (physical & human) for
innovation
• Firm does not have core competencies to deal with
complex technological developments.
• Need to keep up with competitors
• Need to cope up with acceleration of technological
change
• As a part of firm’ strategy --- let other firms take
big risks & it will purchase technology
developed by them.

14. Barriers to External Technology
Transfer
• Associated costs – usually high prices are required
to be paid in the form of royalities, technical &
knowhow fees etc over medium to long term period
• Appropriatesness of technology i.e. its suitability to
core competencies and market needs is always a
point of discussion and investigation
• Heavy reliances on foreign technology- may make
transferee / recipient technologically dependent on
external technology providers / transferors even
for small issues
• Lack of mutual trust between two parties may hinder
full & timely transfer

15. Barriers to External Technology
Transfer
• There is risk of loss of control over technology and
the transferee / recipient may use technology in an
arbitrary manner
• Transfer may render existing technology & its
related products / services / processes obsolete
• Transferee may turn a potential competitor in
future.
• Mismatch in core competencies of the transferor &
transferee may create difficulties in transfer
• Different organisation cultures may create
difficulties in transfer
• Lack of effective communication between the parties
may also create difficulties in transfer

16. Overcoming Barriers to External
Technology Transfer
• Proper & well defined technology transfer
agreement should be signed
• Proper assessment / evaluation of appropriateness
of technology
• Proper assessment / evaluation of compatability of
core competencies of the parties
• Building pre-agreement relationships so as to
develop mutual trust and so as to understand culture
of opposite parties
• Seeking cross cultural training
• Ensuring effective communication
• Anticipating problems and adopting measures for
facilitating transfer

17. Steps in External Technology Acquisition by
a firm –
1. Identification of Need
2. Developing list of suitable technology providers
3. Short listing / selecting suitable technology
providers on the basis …. Cultural compatibility,
compatibility of core competences, appropriateness
of technology, technical feasibility etc
4. Negotiation
5. Agreement
6. Payments as per agreement
7. Transfer of specifications, blueprints, designs,
documents, CDs to purchaser
8. Training of technical personnel of purchaser

18. Modes of Payment for Technology
Transfer
• Lumpsum payment or periodical instalments
• Royalities as a %age of sales over next few years
• Cross-licensing agreements
• Contracted supply of output
• Issue of equity shares in lieu of technology
transferred

19. Acquisition of Technology By Nation
• What factors influence acquisition decision?
• What are national strategies for technology
acquisition?
• Methods of technology acquisition by a nation

20. Methods of Technology Acquisition By Nation
• Attracting TNCs / MNCs
– Through direct measures viz. making a positive list
of industries open to FDI
– Through indirect measures - viz by offering
incentives & subsidies
• Attracting TNCs / MNCs into natural resource
processing & inducing greater value additions
• Using TNCs / MNCs to attract / encourage their
overseas suppliers to invest into country
• Improving skills & training of local technologists by
involving TNCs / MNCs

21. Methods of Technology Acquisition By Nation
• Developing industrial parks / technology parks to
attract high technology investors
• Offering incentives to existing investors to move to
more complex technologies and to increase or
upgrade technological R& D base
• Changing competitive environment and existing
incentive structure to encourage world class
technology & management
• Improving technological access for local firms for
outsourcing / technology transfer
• Collecting, organising & disseminating information
about technology development

22. Regulation of Technology Transfer By Nation
• The regulation is undertaken in two directions:
– Regulation of import of technology / technology inflows
– Regulation of export of technology / technology outflows &
Setting up of Joint Ventures (JV) and Wholly Owned
Subsidiaries (WOS) Abroad
• Why regulation of import of technology? – What are
advantages & disadvantages of import of technology?
• What are – Guidelines on import of Foreign Technology into
India?
• Why regulation of export of technology? –What are advantages
& disadvantages of export of technology?
• What are – Guidelines on Export of Technology & Setting up
Joint Venture & Wholly Owned subsidiary abroad?

23. Technology Acquisition &
Transfer
By
Dr. Vijay Kr. Khurana