1. Technology Transfer

2. Concept of Technology Transfer
Technology transfer is a principle means of industrialization for underdeveloped nations.
The transfer of technology from developed to developing country has grown considerably in last few decades.
Acquisition of technology cannot be regarded as a neutral phenomenon . It is closely bound by the economic policy at both national & international level.

3. The irreducible constraints
The irreducible set of constraints on the transfer of technology from R&D to product environment are:
Performance
Efficiency
Frequency of operations
Volume & weight
Bandwidth, power dissipation
Reliability
Reliability is the maintenance of functionality(performance specification) over the life cycle.
Cost
Cost is calculated in terms of functionality
i.e. cost per unit of performance.

4. Application Space
In the R&D environment we talk of trade off between cost, performance & reliability.
In the product environment the specification of cost, performance & reliability is determined by, and mapped onto, an application. This mapping process defines an “application space” having three independent axes(orthogonal).
For a given application there is a minimum performance specification , minimum reliability specification and maximum allowable cost, this set constitutes a point inn the application space.
The total market them is then the collection of all points in the application space.
Any trade-off will define at best a new appilation ,at worst product will not match any existing application.

6. The experience Curve
The experience curve reflects the evolution of unit cost with cumulative production volume.
The experience curve, or cost-volume( C-V) curve, teaches that, unit cost declines with increase in cumulative volume.

7. Return on Investment
To estimate return on investment we need to superimpose price on the C-V curve as shown below.

8. Return on Investment
Initial price determined by market force is lower than cost.
As producer moves down cost dips below price, profitability starts rising.
A price reduction as shown in the figure may be due to competition or adaption of technology.
Hashed line is for stable market.

9. Necessity for Technology Transfer
First changing competitive environment
To have competitive advantage.
To be in a favorable situation than competitors.
Strategies in business area are established in consideration with some fundamental factors and required conditions.

10. Technology Outsourcing
Subjects of technology outsourcing

11. Technology Outsourcing
Management environment factors that promotes technology outsourcing

12. Characteristic of Technology
Assets that have economic value largely can be divided into tangible assets which have specific form . Intangible assets which does not have any specific form
Technology to be transferred can be included in the intangible category.
In wider sense it means entire intellectual property which has economic value.
Planning and executing business strategies based on understanding of various characteristics of intellectual property is a short cut to business success.

13. Characteristics of Intellectual Property.
Not visible and does not have any physical form.
Recovery value is relatively high because of the limitation in creation and production due to the high level of intellectual origin.
Evaluation and valuation is very difficult,and transfer price and conditions are determined by negotiations rather than market force.
Life cycle is relatively short.

14. Motive of Technology Transfer
In case where owner of the patent does not have the capability to execute and there are no problem in licensing to third party.
Problem in developing a basic patent into a commercial product.
Disposed for early recovery of R&D cost.
Difficult to produce the finished good based on partial patent.
Sales by specialized technology development
Individual inventor raises research & invention funds.

15. Payment method of the sales price for Patents
Methods where the sales price and the patents rights registration are exchanged.
Methods of payment and receipt simultaneously with the notification of the completion of transfer.
3rd party such as banks.

16. Modes of transfer
According to the International Code of Conduct on the transfer of technology(UN 1980) ,a number of distinct operationns may be identified, as follows:
Assigning or granting of industrial rights.
Handing over technical or non-technical know how in the form of documents,plans,diagrams and so on.
The communication of technical or other know how in the form of supply of services.
Providing technical services related to the selling or leasing of machinery

17. Modes of transfer
According to Adeboye(1977) who bases his schema on UNCTAD(1975),wherein the transfer of technology can take place through one or more of the following means:
Transfer of published material.
Purchase of machinery, equipment and other intermediately goods.
Transfer of data and personnel.
Granting and licenses and trademarks.
Direct foreign investment by transnational co operations.
Technologists’ mobility
Technological entrepreneurship
Interpersonal communication.

18. Modes of transfer
Baranson (1975) classifies these mechanisms into three principle modes
licensing
subcontracting
Supply of equipments and materials..
Goulet adds consultant to the list proposed by Baranson.

19. Modes of transfer transferor transferee Linkage
According to M.Sharif(1986) technology transfer is described as consisting of three elements
transferor
transferee
Linkage
Direct
The operations of transnational companies
Licensing arrangements
Hiring of experts and contractors
Training of technical staff abroad.
Indirect
Purchase of machinery , equipments, components
Exchange of information
Flow of books,journals
Exhibition and trade fairs.

20. Modes of transfer UNCTC(1987) classifies technology transfer as
Commercial
FDI
Joint venture
Licensing
Franchising
Contracts(marketing , technical service)
Non-commercial
Review of technical publications
Training of foreign students

21. Modes of transfer Two more mode of transfer identified as Conventional
Non-conventional
Reverse engineering(product imitation)
Reverse brain drain
FDI in industrialized countries
Adopted by NICs

22. Transfer from advanced/industrialized economy
Approach
Cultural Difference
Equipment Specification
Team approach
Planning
Program focus and execution

23. Product/Processes Transfer
Transfer Procedure
Discovery of technology
Technology valuation and demand selection
Negotiation and contracting
Packaging
Marketing
Post managment

24. Product/Processes Transfer
Licensing Methods
Exclusive license
Non-exclusive license
Sublicense
Cross Licensing
Package Licensing

25. Cost of Technology Transfer
Direct Cost
Indirect cost