U.K.P.

Mihiranga
(MBA in MOT,
[Link]. Eng. (Hons),
Technology
PMP-PMI(USA),
AMIESL)
Transfer
 ➢ The process of movement of technology
from one entity to another
➢ The transfer is said to be successful if the
receiving entity can effectively utilize the
technology transferred and eventually
assimilate it

Definition ➢ The movement may involve physical

assets, know-how (Practical knowledge
and skills), and technical knowledge
➢ Technology transfer (TT) in some
situations may be confined to relocating
and exchanging personnel
 ➢ Technology transfer has also been used to
refer to movements of technology from the
➢ Laboratory to industry
➢ Developed to developing countries
➢ One application to another domain
More ➢ When technology is considered as
information, technology transfer is
definitions sometimes defined as the application of
information into use
➢ Technology transfer is the movement of
knowledge, skill, organization, values, and
capital from the point of generation to the
site of adaptation and application
 ➢Vertical Technology transfer
➢Horizontal technology transfer
Classification of TT ➢Unpackaged technology transfer
➢Process packaged technology
transfer
Vertical Technology
Transfer
➢ Transfer of technology from
basic research to applied
research, development, and
production
Horizontal
Technology Transfer
➢ The movement and use of
technology used in one place,
organization, or context to another
place, organization, or context
➢ International or Intra-national
➢ Pure Horizontal or Mixed
 ➢Purchased from the open market
in unpackaged form
Unpackaged ➢Price of each item is known
➢Price constrained by the presence
technology of competitors offering near
substitutes
transfer Ex: Purchasing a laptop, Smart phone
 ➢Systems rather than components
Process ➢Suitable when processes are
packaged specialized
➢Suitable when transferor offers a
technology major innovation
Ex: Purchasing ERP system, LMS
transfer
Seven Factor Model of TT
 ➢Transferor can be called source,
and on the other hand it can be
implied as the owner or holder of
the technology
Transferor ➢Transferor is the entity in TT which
sell the technology to the recipient
➢The transferor could be an
individual, a company, or a country
 ➢Transferee can be called recipient
and on the other hand it is the
beneficiary of technology and
knowledge transfer
Transferee ➢Transferee also is the entity in TT
which purchase the technology
from the source
➢The transferee also could be an
individual, a company, or a country
Technology
➢ Tools, processes, methods,
products, and systems
employed in the creation of
goods or in providing services
and all the knowledge
 Since the transferee is the beneficiary of TT project,
the mechanism of transfer should be chosen by the
transferee
1. Licensing
2. Support contract
Mechanism 3. Joint venture
4. Franchising
of transfer 5. Strategic alliances
6. Turnkey agreement
7. Equipment acquisition
8. Management contract
9. Foreign direct investment
10. Original Equipment Manufacturer (OEM)
The transferor environment
➢ Set of conditions under which the transferor proceeds to sell the
technology to the transferee is called the transferor environment
1. Willingness to transfer
2. Mode of transfer
3. Technology of transfer
4. Experience
5. Technological capabilities
6. Cultural trait
The transferee environment
➢ Set of conditions under which the transferee proceeds to purchase the
technology from the transferor is called the transferee environment
➢ Mode of transfer
➢ Technological capabilities
➢ Financial capacity
➢ Cultural trait
➢ Intent to learn technology
The greater environment
➢ It is evident that the transferee and transferor have the same set of
conditions which can influence TT
➢ It surrounds both the transferor and transferee.
➢ Layers of this environment are sub-regional, regional, and global
➢ Government support
➢ Government policies (trade agreements, tax policies)
➢ Historical relationships
➢ Cultural difference
Joint Venture
➢ A joint venture is an agreement concluded between two or more companies
to execute a particular business
➢ It implies mutual assets, management, risks, profit sharing, co-production,
services, and marketing
➢ Benefits from a joint venture in case of technology transfer are the following:
➢ Long-term cooperation between the parties
➢ Motivation of all participants in the successful transfer
➢ Lower costs than if the companies have been working separately
 ➢Franchising is an agreement where one company
grants to another the right to use its trademark
and business model
➢The buyer of the franchise starts manufacturing
and selling the goods according to the seller’s
Franchising specification
➢Normally, the owner of a trademark also shares its
experience in operating and managing the
franchised product/technology
➢The main advantage of franchising is the fact that
the company gets an already-made brand
 ➢ FDI is one of the main methods of
technology transfer at the state level
Foreign ➢ Foreign company invests in developing
countries to create a new market, remove
Direct export barriers and get access to cheap
labor

Investment ➢ Developing country gets all the benefits of

technology transfer, particularly the
development of their research environment
(FDI) ➢ To attract foreign investors, the developing
country’s government, generally, must make
some concessions in its policy
Original Equipment Manufacturer (OEM)
Form of subcontracting, where a local firm starts manufacturing according to the foreign
company specifications
A foreign company transfers a part of its technologies and equipment

It conducts training and management reorganization

Afterward, the foreign company sells produced goods through its channels and under its
trademark
OEM agreement enables local companies to absorb new technologies and reorganize their
production
With new equipment and skills, these firms can produce new goods for the domestic market
under their own brand
[Link]
[Link]
Licensing
➢ An agreement under which the owner of a patent, trademark, or other
intellectual property gives permission to another company to use the
technology developed by him (her), in a certain area during a certain period
➢ There are two main types of licenses:
1) Grants an exclusive right to use the technology
2) Grants non-exclusive right, which implies that the patent owner may
transfer the right to use the technology to other companies in the same
area
The End