MB09 – 01 : MANAGEMENT OF TECHNOLOGY TRANSFER ABSORPTION AND IPR 1.1

Q.1 Differentiate between the channels of technology transfer.
1. Channels of technology transfer
Technology is intangible. It flows easily across the boundaries of countries, industries, departments, or individuals, provided that the channels of flow are established. There are three types of channels that allow the flow of technology.
2. General Channels
The technology transfer is done unintentionally and may proceed without the continued involvement of the source. Information is made available in the public domain with limited or no restrictions on its use. This information is harnessed by users and applied to their purposes. Channels of this type of transfer include education, training, publications, conferences, study missions, and exchange of visits.
3. Reverse Engineering Channel
Other channels in which the transfer occurs with no active contribution from the source include reverse engineering. Here a host, or a traditional receiver of a technology, is capable of breaking the code of a technology, and developing the capability to duplicate it in some fashion. This is feasible provided that the host has the knowledge to do this and there is no legal violation of the intellectual property rights. For example a product that is put on the market by company A can be purchased by company B, reverse –engineered, and introduced to the market as a competitor by company A’s product. This is a powerful method for technology transfer. Its limitation is in its inability to transfer the developer’s tacit knowledge. Such knowledge is usually gained during the product development process.
4. Planned Channels
The technology transfer is done intentionally, according to a planned process and with the consent of the technology owner. There are several types of agreements that are used to effect planned transfers. They permit access to, and use of, technological know-how:
a. LICENSING
The receiver purchases the right to utilize someone else’s technology. This may entail an outright purchase or payment of an initial lump-sum amount plus a percentage of sales.
b. FRANCHIES
This is a form of licensing ;however, the source usually provides some type of continual support to the receiver, for example , by supplying materials, marketing support , or training . This channel is commonly used in food chins and service organization , such as McDonald’s , Burger King , and Pizza Hut.
c. JOINT VENTURE
Two or more entities combine their interests in a business enterprise in which they can share knowledge and resources to develop a technology , produce a product , or use their respective know-how to complement one another . They also share in the rewards of the venture . International joint ventures are frequently used by recipients to acquire technology and by sources of technology to gain access to local markets and distribution skills.
d. TURNEY PROJECT
A country buys a complete project from an outside source and the project is designed , implemented , and delivered ready to operate . Special provisions for training or continued operational support may be included in the agreement between the parties. Engaging in a turnkey project is equivalent to buying or selling a machine but on the scale of an entire plant. Most innovative firms would not sell a plant or license technologies that they intend to exploit themselves .
e. FOREIGN DIRECT INVESTMENT (FDI)
A corporation , usually a multinational , decides to produce its products or invest some of its resources overseas . This permits the transfer of technology to another country , but the technology remains within the boundaries of the firm(i.e., is still controlled by the firm) . This type of investment has advantages for both the investor and the host country . The investor gains access to a labor force , natural resources , technology , or markets . The host country receives technological know-how, employment opportunities for its people, training for the workforce and investment capital that adds to the development of the infrastructure. The host country will also get tax advantages, since most employees will be contributing to the local economy. The multinational may also gain a tax break. Many U.S. Pharmaceutical companies have located facilities in Pureto Rico because of the tax advantage they can get with this arrangement . Some developing countries provide long-term relief for foreign companies located on their soil.

1b) . what do you mean by internal technology transfer .
Internal Technology Transfer
In large enterprises , technology is not often developed and introduced through only one organizational element . This is changing through the use of multifunctional teams . However , the movement of a technology from R &D team to manufacturing and then to marketing is a very complex process . The actual process of transferring technology with in the enterprise involves a number of decisions . One of the decision is on timing i.e.; when the technology is ready to move from research and development to production and finally to market . The competing concerns for making this decision include customer needs , i.e. , when is the technology at a stage to meet the customer requirements? The timing decision also depends on the development of specifications and operating parameters that are sufficiently detailed to ensure efficient , repeatable production . Timing is a function of preemption of competition . A late market introduction can have significant adverse effects on technology profitability; however , premature release can also have major adverse impacts . The timing of internal technology transfer is critical .

Q.2. What are the approaches to assess the technology . Explain any one of them .

Assessing the technology delivery system technology delivery system is an important aspect of assessment . While changes can be made to a technological development as it is in the process of being translated into a product , process or service , it is the underlying system , it is in the process of being translated into a product , process or assessment of the delivery process is key to future success in technology be assigned sole responsibility for insuring that technology is successfully developed , e.g. Chief Technology Officer .
Individual Technology Assessment
A technology must pass through three gateways to become commercially OR SOCIALLY EMBEDDED IN ITS INTENDED ENVIRONMENT (Benson and sage 1993). These triple-gateways, according to Benson and S age are:
• Market
• Systems-management
• Technology
A tripe-gateways methodology, according to Benson and sage is useful in the evaluation of emerging technology in the early outscoping phase prior to the expenditure of substantial enterprise resources. The outscoping phase is one of the seven phases in a multiphase life cycle analysis. A multiphase life cycle analysis is a process for determining the potential utility and costs of a technological developments it progress from its conception through development and finally to embodiment or deployment. The multiphase life cycle analysis focuses on the early phases of the research and development process and includes scoping and identification of requirements specifications so as to identify societal and markets needs (Benson and Sage 1993)
MARKET GATEWAY
The market gateway assessment uses a market uncertainly analysis approach, which covers new users, user skepticism behavior adjustment, competitive technologies, UN predictable technological developments, new users, and legal barriers. The new user uncertainty derives from where a new technology is being offered to a user , an example is the use of internet software to replace long distance voice communication and direct banking services .
User skepticism adds to technology uncertainly because developers of technology are usually optimistic about the relationship of performance and cost versus price. However, the user may not subscribe to the same set of r3elationships , i.e., the user may not want to pay the incremental pricing to obtain an incremental increase in performance .
Uncertainty also arises due to the need for user behavior adjustment . A new technological development may require users to change their behavior for the technology to achieve embodiment , e.g., telecommuting , where workers perform the majority of the work outside their enterprise offices .
New competitive technologies add to the complexity of the market adding considerable uncertainty, e.g., JAVA, an Internet computer language, which makes it possible to download software for one-time use, may cause existing operating systems to lose their importance. New technology breakthroughs also add uncertainty to the market. An example is the case of the early development of satellite communications, which changed the international telecommunication industry structure. Uncertainly as to the market is added to by legal and regulatory requirements which can cause new technologies to be forced to overcome, for example, long-periods of testing adding to development cost and uncertain profitability.