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LECTURE 07 and 08 Technology Transfer Shan Jayasinghe
Pre-requisites • A proper understanding of the concept innovation • “Innovation is more than simply coming up with good ideas; it is the process of getting them into practical use. Definition of innovation may vary in their wording, but they all stress the need to complete the development and exploitation aspects of new knowledge, not just its invention”
Pre-requisites • What is the purpose of complex innovation ecosystems? Creating Value Generating Wealth Capturing Value Capturing Wealth
Pre-requisites • What are the phases of industry evolution? Maturity Start-up/Growth Shakeup
Pre-requisites • A proper understanding of the concept entrepreneurship • “The process of setting up a business. Entrepreneurship is one of the resources economists categorise as integral to production, the other three being land/natural resources, labor, and capital. An entrepreneur combines the first three of these to manufacture goods or provide services. They typically create a business plan, hire labor, acquire resources and financing, and provide leadership and management for the business”
Pre-requisites • Significance of the technological innovation process • The process of technological innovation is a complex set of activities that transforms ideas and scientific knowledge into physical reality and real-world applications • It is a process that converts knowledge into useful products and services that have socioeconomic impact. • It requires the integration of inventions and existing technologies to bring innovations to the marketplace.
Pre-requisites • Global competitiveness is the process by which one country strives to outperform another • The degree to which a nation can, under free and fair market conditions, produce goods and services that will meet the test of international markets, while simultaneously maintaining or expanding the real income of its citizens
Flow of the Presentation • Introduction – What is Technology Transfer? • Elements of TT process • International TT models • Technology transferred through different mechanisms • Technology capability development stages by TT • Avoiding common problems in TT
The movement of technology from one entity to another, and if the transfer is successful, the proper understanding and effective use of the technology by the receiving entity
Lack of understanding until about mid 1960s • Eternal dependence due to large technological gap • Belief of free flow of technology • Lack of clear understanding of the role of S&T in economic development • Change of attitudes due to privatisation, liberalisation, globalisation and success stories • Acceptance of the importance of TT and its assimilation for competitive advantage
No free flow of technology and existence of an international market • TT is viewed a international trade • Has features of commodity, available in international market and subject to commercial transactions • No donors and recipients but sellers and buyers
Some Technology Transfer is Possible Technology Transfer Most Effective TT possible but unlikely due to market rivalry Medium to High Technology capability status of transferee TT unlikely to succeed due to lack of Absorptive Capacity Simple TT may be successful Some TT is possible Low to Medium Very High to High Moderate Low to Very Low Technology component gap between Transferor and Transferee Relationship between Effective Technology Transfer and Technology Gap
Schematic Representation of Technology Transfer Process Greater Environment Transferor Transferee Linking Transferor Technology Transferee Mechanism Environment Environment Greater Environment
Transferor Environment • Immediate set of operating conditions of the transferor, individual, organisation or national level • Involves economic status, technological status, inward vs outward orientation, stability, attitude, policies and commitment towards TT
Transferee Environment • Absorptive capacity • Physical & organisation infrastructure • Availability of skills • Attitude and commitment to change • Inward vs outward orientation • Economic and technological status • Political stability • Transparent and developed legal systems etc. • Attributes of the transferee
The Greater Environment • Environment surrounding the transferor and transferee environments • Political relationships, investment climate, exchange rates, balance of trade problems, technological levels, international competition
Examples for the Greater Environment • Political relationships with India, China and the West • Semiconductor shortage • USAs control of 40% of technology (dual use) • Trade war between the USA and China
Motivations of Transferee • Technology is strategic for growth • Not possible to develop all required technology • Lower costs learning from transferor’s experience • Reduce R&D and D&E costs by imitation • Learn buyer needs from transferor’s experience • Generate employment and investment opportunities • Enhance competitive strength of exports • Meet defence requirements and other political needs • Catch up latest technology by leapfrogging
Motivations of Transferor • Getting the most out of technologies developed • Tapping unavailable but attractive markets • Rapidly standardise technology • Use cheaper labour in least developed countries • Reinforce technology dependence • Political factors, especially security related
Reasons for Ineffective Transfer • Lack of generic framework for product/process technology elements • Incomplete and poor specification causing mismatch • Poor scanning of international shelf and ineffective assessment • Erodes basis for negotiations affecting price • Selection of unsuitable mechanism
Technology Transfer Mechanisms • Direct and Indirect • Contractual and non-contractual • Market oriented and development oriented
Market Oriented Mechanisms • Purchases of plant, equipment and products • International joint ventures • Licensing • Subcontracting • Turnkey contracts • Product in hand contracts • Management contracts • Production sharing • Joint research ventures • Expert services • Technical information services
Non-Market Oriented Mechanisms • Books, academic journals, business magazines, etc. • Sales literature • Industrial fairs and exhibitions • Informal personal contacts • Participation in conferences, seminars and workshops • Training
Watch this documentary to realise how China fulfills its food requirement by increasing the productivity of its agriculture sector https://www.youtube.com/watch?v=AmVNwilQJvc&t=5s
Can you relate our discussion to The Taiwanese Approach case study? https://www.nap.edu/read/10677/chapter/9
The governments of East Asian nations have promoted the following 4 aspects simultaneously Supporting technology transfer to the country through FDIs Start establishing a startup eco-system around the FDIs Aligning the overall education strategy to support the expansion of the industry Supporting existing research centers and establishing new ones The Sri Lankan government and education institutions are promoting 2, 3 and 4. However, according to the evidence from Southeast Asian region, the success of 2, 3 and 4 heavily depends on the success of 1
