ANALYSIS OF FACTORS INFLUENCING THE TRANSFER

OFTECHNOLOGY AMONG MICRO AND SMALL ENTERPRISES IN

ARADA MANUFACTURING COLLEGE

BY:-
REGASSA LEGESE
ADVISOR
Dr. SEMACHEWTHE THESIS SUBMITTED TO DEPARTMENT OF
PROJECT MANAGEMENT OF ALPHA UNIVERSITY COLLEGE IN
PARTIAL FULFILLEMENT OF THE REQUIREMENT DEGREE OF
MASTER IN PROJECT MANAGEMENT

.
Addis Ababa, Ethiopia
JUNE, 2024

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ALPHA UNIVERSITY COLLEGE
ANALYSIS OF FACTORS INFLUENCING THE TRANSFER OF TECHNOLOGY
AMONG MICRO AND SMALL ENTERPRISESIN RAS EMIRU: THE CASE OF
AMC
By:
REGASA LEGESE

Approved by the Board of Examiner

Internal Examiner External Examiner

Name Name
Signature Signature
Date Date

Advisor

Name

Signature

Date

Confirmation
Chairperson, Department of Graduate committee
Name
Signature
Date

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 DECLARATION
We hereby declare that this research entitled “Analysis of factors influencing the transfer of
technology among micro and small enterprises in arada manufacturing college”, has been
carried out by us under the guidance and supervision of research and publication unit The
research is original and has not been submitted for the award of any degree or diploma to any
university or institutions.

Name: - Regassa legese

_______________________________ ______________
Signature Date

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 CERTIFICATE
This is to certify that the research entitles “analysis of factors influencing the transfer of
technology among micro and small enterprises in arada manufacturing college”, submitted to
Arada Manufacturing College, research and publication unit for the award of the article
publication on the international journal and is a record of research and publication unit, research
work carried out by Mrs. Regassa Legese , under our guidance and supervision.
Therefore, we hereby declare that no part of this research has been submitted to any other
university or institutions for the award of any degree or diploma or recognition.
Research and publication unit (Main advisor)

_______________________________ _________
Signature Date
Dr. /Mr.____________________. (Co-advisor
_______________________________ __________
Signature Date

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 ABSTRACT
Ethiopia’s Micro and Small Enterprises (MSEs) are characterized by restricted
levels of technology, inappropriate technology and inadequate institutional
capacities to support adaptation and absorption of modern technological
skills. Many MSEs Produce products with moderate quality, applying to a
great extent outdated technologies, therefore facing tough competition with
imported products. In order for businesses to be competitive there is dire
need for them to produce quality products. The study sought to fill a gap in
knowledge concerning transfer of technology among MSEs by addressing the
factors that influence the transfer of technology among MSEs in Arada
Manufacturing College with great emphasis on the area and that they found
in Arada manufacturing college. The study used of the study’s research approach
which lays within the mixed methods strategies, the chapter discusses procedures and activities
under taken, that includes research design, questionnaire design, data collection, sampling
strategy, data processing and analysis The study concludes that the level of
education and training is the main determinant of transfer of technology
other factors held constant. The study found no evidence to suggest that
technological information, finances, technological infrastructure and
governments support have positively influenced transfer of technology
among MSEs in Arada. The validity and reliability of this study was 98.5%,
0.474 respectively

Key Words: Technology transfer, Micro and Small Enterprises, Government’s support,
Technological information, Education and training, Finances, Technological infrastructure

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 ACKNOWLEDGEMENTS

The successful completion of this study was done with the support of Almighty God to whom we

owe a great gratitude, as I shall continue to remain thankful to him. My heartfelt thanks go to my

supervisor Research and publication unit for their commitment on the study at each stage and for

making invaluable comments and suggestions that guided us thoroughly towards its good end.

We further wish to thank for AMC and kindness in providing access to information and Small

Enterprise operators for giving their time to respond questioners. Finally, we remain indebted to

beloved friends for support during this study.

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CONTENTS
DECLARATION.....................................................................................................................i
ABSTRACT..................................................................................................................................iii
ACKNOWLEDGEMENTS............................................................................................................iv
LIST OF FIGURES.......................................................................................................................vii
LIST OF TABLES.......................................................................................................................viii
ACRONYMS AND ABBREVIATIONS..................................................................................viii
CHAPTER ONE............................................................................................................................1
INTRODUCTION.........................................................................................................................1
1.1. BACKGROUND OF THE STUDY..................................................................................1
1.2. Statement of the Problem..................................................................................................3
1.3. Objectives of the Study.....................................................................................................4
1.3.1. General Objective......................................................................................................4
1.3.2. Specific Objectives....................................................................................................4
1.4. Research questions............................................................................................................4
1.5. Justification of the Study...................................................................................................5
1.6. Significance of the Study..................................................................................................5
1.7. Scope of the Study............................................................................................................5
1.8. Limitations to the Study.................................................................................................6
1.9. Organization of the study...............................................................................................6
CHAPTER TWO.............................................................................................................................7
2. LITERATURE REVIEW.....................................................................................................7
2.1. Introduction.......................................................................................................................7
2.2. Theoretical Review...........................................................................................................7
2.2.1. Theories of Entrepreneurship....................................................................................7
2.3. Conceptual Framework.....................................................................................................8
2.4. Empirical Literature Review...............................................................................................11
2.4.1. Production Skills..........................................................................................................11

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 2.4.2 Equipment/ Object Technology.....................................................................................13
2.4.3. Knowledge....................................................................................................................15
2.4.4. Process Technology Transfer.......................................................................................16
2.5. CRITIQUE OF EXISTING LITERATURE...................................................................19
2.6 Summary of Literature.........................................................................................................20
2.7 Research Gap.......................................................................................................................21
CHAPTER THREE.......................................................................................................................22
3. RESEARCH METHODOLOGY...........................................................................................22
3.1. Introduction.........................................................................................................................22
3.2. Research Design..................................................................................................................22
3.3. Research Approach.............................................................................................................22
3.4. Sample Size Determination.................................................................................................23
3.5. Variables and Measurements..............................................................................................24
3.6. Instruments of Data Collection.......................................................................................25
3.6.1. Primary Data Collection..........................................................................................25
3.6.2. Secondary Data Sources..........................................................................................25
3.7. Procedures of data collection..........................................................................................25
3.7.1. Data processing and analysis.......................................................................................25
3.7.2. Data Processing.......................................................................................................25
3.7.3. Descriptive Analysis................................................................................................26
3.7.4. Inferential Analysis..................................................................................................26
3.8. The Pearson Product Moment Correlation Coefficient...................................................26
CHAPTER FOUR.........................................................................................................................27
4. RESULT AND DISCUSSION.................................................................................................27
4.1. Introduction.........................................................................................................................27
4.2. General Characteristics of the Enterprises..........................................................................28
4.2.1. MSEs by Sectors..........................................................................................................28
4.2.2 The main sources of skill development or MSE’s........................................................28
Regression and Hypothesis Testing...........................................................................................42
Regression Results.....................................................................................................................42
CHAPTER FIVE...........................................................................................................................45
5. CONCLUSIONS AND RECOMMENDATIONS....................................................................45

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 5.1 conclusions...........................................................................................................................45
5.2. RECOMMENDATIONS....................................................................................................46
REFERENCES............................................................................................................................47
APPENDIXES...............................................................................................................................50

LIST OF FIGURES
Figure 1 . Contingent Effectiveness Model of technology transfer...............................................18
Figure 2. Source of skills development.........................................................................................28
Figure 3. The proportion of MSE Sectors respondents.................................................................29
Figure 4. Did you receive technical skill improvement opportunities from the Arada
Manufacturing College?................................................................................................................30
Figure 5.What is your overall assessment of the adequacy of skill improvement trainings in terms
of addressing the skill gaps you faced?.........................................................................................31
Figure 6.Did you have linkage with technology transferring centers established by the Arada
Manufacturing College?................................................................................................................32
Figure 7.Technology transfer.........................................................................................................33
Figure 8.Positively impact.............................................................................................................34
Figure 9.The main berries in the process of technology transfer were, Low technical skill in
utilizing the technology.................................................................................................................35
Figure 10.The main berries in the process of technology transfer were, high cost of technologies
.......................................................................................................................................................36
Figure 11. Lack of finance.............................................................................................................37
Figure 12. Difficulty of integration of new technology with existing one....................................38
Figure 13.Lack of organizational support......................................................................................39
Figure 14.How frequently does the government support on skill improvement and technology
transfer areas delivered to your firm?............................................................................................40
Figure 15. How frequently does the government support on skill improvement and technology
transfer areas delivered to your firm?............................................................................................41

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 LIST OF TABLES
Table 2.Conceptual Framework.....................................................................................................11
Table 3. Sample size in each sectors.............................................................................................24
Table 4.The main sources of skill development............................Error! Bookmark not defined.
Table 5.Access to Skill improvement Training Opportunities from Arada Manufacturing College
........................................................................................................Error! Bookmark not defined.
Table 6. Technology Transfer........................................................Error! Bookmark not defined.
Table 7. Barriers of Technology Transfer......................................Error! Bookmark not defined.
Table 8. Linkage with Business Development Institutions...........Error! Bookmark not defined.

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 ACRONYMS AND ABBREVIATIONS

BHA British Hospitality Association

BPR Business Process Reengineering
CBS Central Bureau of Statistics
ETC Embodied Technological Change
FMSEB Federal Micro and Small Enterprise Beauro
GLW Garment and Leather Work
ITT International Technology Transfer
MSEs Micro and Small Enterprises
MSMEs Micro Medium and Small Enterprises
MW Metal Work
NIC Newly Industrialized Countries
TT Technology Transfer
VRIO value, rarity, imitability and operability
WW Wood Work

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 CHAPTER ONE
INTRODUCTION

1.1. BACKGROUND OF THE STUDY

(Cheruiyot, 2017) technology is essential not only for the development of smaller enterprises but
the overall economy of any nation. Many developing countries consider the transfer of
technology from developed countries as an important element of growth. (Dadadi, 2017) argues
that access to technology is a major determinant of efficiency. The investment efficiency to a
great extent depends on the capacities of the firms to acquire new technologies and adopt them to
local conditions.

In recent decades, an increasing interest in technology transfer (TT) is seen among policymakers,
practitioners, and scholars worldwide(Sandeep et al., 2021). It is a long, complicated, and diverse
process affected by several forces emanating from multiple stakeholders. The literature
postulates the TT process as academic entrepreneurship (Sandeep et al., 2021), which is vital for
achieving sustainability (Sandeep et al., 2021). There is a pressing need to recognize enablers to
effective Technology Transfer so that stakeholders can better understand and support the
process(Kaushik et al., 2014). Further, many research and development (R&D) innovations are
not exploited or commercialized despite many proactive policy interventions for various reasons
(Sandeep et al., 2021).

The field of Technology Transfer has garnered the attention of researchers from a variety of
areas, including economics, marketing, history, anthropology, engineering, and political science.
The researchers in these fields study the state-of-the-art Technology Transfer operations,
processes, and effectiveness factors [8]. In the previous studies, researchers have investigated the
factors affecting Technology Transfer and proposed several models. The majority of these
models developed were international, from multi-national companies to local businesses [6].
Furthermore, there were relatively few models published in the literature that addressed
Technology Transfer from public funded academic research institutions (ARIs) to industry, and
the majorities were executed in developed countries [1].

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Moreover, the extant literature concentrates on TT from universities to existing businesses. TT
from public-funded ARIs to small and medium-sized enterprises (SMEs) has earned little
consideration (Sandeep et al., 2021). Universities are not only different from ARIs in terms of
transfer origins (Alemu, 2018), but existing companies are also different from SMEs in terms of
transfer receivers (Alemu, 2018). Since TT is highly contextual and uncertain, it is vital to
acknowledge the factors and develop models adapted to the local circumstances (Baglieri et al.,
2018).

This study examines the transfer of technology and knowledge between Arada Manufacturing
College (AMC) and Micro and Small Enterprises (MSE) in the informal or formal sector in
Ethiopia and the extent of technological capability (TC) building that this transfer generates. By
studying this, the thesis also aims to investigate the applicability of existing frameworks for the
analysis of Factors Influencing the technology transfer to a context of informality in a developing
country (DC) in Ethiopia.

In the last few decades, both developed and developing countries have relied heavily on
dynamism, resourcefulness and risk taking of micro and small enterprises (MSEs) to trigger and
sustain the process of economic growth (Ramanathan et al., 2004 Catering). To achieve this goal,
micro and small enterprises (MSEs) have invested in new technology that have resulted in
noticeable growth as measured through increased number of customers and profits margins.
Technology transfer involves movements’ of production skills and equipment technology from
the laboratory to industry, developed to developing countries, or from one application to another
domain (Philips, 2002). Thus the movement involves physical assets, know-how, and technical
knowledge (Bozeman et al., 2000). In Micro and Small manufacturing enterprise, which is found
within the manufacturing industry that provides to the customers, the entrepreneur combines or
integrates both production skills and equipment technology to spur growth in this subsector.
Furthermore, the performance of hospitality industry is influenced by quality, freshness, taste,
price, convenience, design of packaging, nutritional value of the product and the quantity of the
product. Cohen (2004) identified four forms of technology transfer as follows: technology
transfers of production skills as general theoretical and practical understanding of how to do
things (know-how or information); technology as objects (goods or tools); technology as the

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systematic knowledge of technique and technology as installed techniques of productions
(processes). However, according to Cohen (2004), the integration of technology transfers of
production skills and equipment technology transfer takes precedence against the others. Cohen
(2004) defines that interaction as a combination of people, cognitive skills, plant, equipment and
tools.

The vast majority of developed and developing countries rely on dynamism, resourcefulness and
risk taking of micro and small enterprises to trigger and sustain the process of economic growth
(Ramanathan, 2007 ngwi). Micro and small enterprises (MSEs) that have invested in new
technology have experienced marked growth in terms of customers and profits. Technology
transfer has been used to refer to movements of technology from the laboratory to industry,
developed to developing countries, or from one application to another domain (Philips, 2002).
The transfer is both visible and invisible depending on the mode. The movement may involve
physical assets, knowhow, and technical knowledge (Bozeman, 2000).

1.2. Statement of the Problem

Among the challenges faced by Micro and Small Enterprises (MSEs) is lack of information on
the influence of technology transfer on the growth of MSEs. Weak environment that hinder focus
on technology has seen the MSE sector experience low productivity and poor quality goods. The
government views micro and small enterprises (MSE) sector as one of the engines for faster
economic growth. In this respect, the government has made specific allocation of funds to the
MSE sector with special consideration to the gender (Women), youth and vulnerable groups. The
jua kali sector has also been considered, (Medium Term Plan (MTP) report 2008 – 2012).
However, many people in Ethiopia venture into manufacturing MSE without prior training in
order to acquire the relevant knowledge, skills to operate a successful enterprise. Even with
relevant technology in the market, they are not aware of the benefits of adoption and use. They
still use the indigenous technology in running their enterprises. This has hindered manufacturing
enterprises‟ growth in terms of size, period of operation, customer increase, profit margins,
outputs and product and service quality. Most of these manufacturing MSEs are still using
indigenous technology that is inappropriate in their operations. Little information is available on
the influence and use of appropriate technology on enterprise growth (KIRDI (2006).) This study
therefore, sought to close the information gap by providing empirical evidence on the

3
relationship between the use of appropriate technology Transfer and business growth in Micro
and Small catering enterprises in Ethiopia. The researcher concentrated on gathering information
on how efficient technology transfer of production skills, equipment, knowledge and processes
have influenced enterprise growth in terms of turnover, profit margins, firm size and the period
of the enterprise operations.

1.3. Objectives of the Study

1.3.1. General Objective

The general objective of this study to Analysis a Factors of Influencing Technology Transfer
among Micro and Small Enterprises (MSE) in Arada Manufacturing College in Addis Ababa,
Arada sub-city.

1.3.2. Specific Objectives

 To Analysis the Factors of Influencing technology transfers of production skills on the
growth of Manufacturing Micro and Small Enterprises between AMC.
 To determine the influence of equipment/objects embodied technology transfer on the
growth of Manufacturing Micro and small enterprises in AMC.
 To examine the influence of knowledge-embodied technology transfer on the growth of
Manufacturing Micro and small enterprises in AMC.
 To determine the influence of process embodied technology transfer on the growth of
Manufacturing Micro and small enterprises in AMC.

1.4. Research questions

The researches questions will be addressed in this paper are;

a) What are the factors that influence transfer of technology among MSEs in AMC?
b) What measures can be put in place to facilitate transfer of technology among MSEs in
AMC?
c) How to examine the influence of knowledge embodied technology transfer?
d) How to determine the influence of process embodied technology transfer

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1.5. Justification of the Study
In developing countries, MSEs by virtue of their size, capital investment and their capacity to
generate greater employment have demonstrated their powerful propellant effect for rapid
economic growth. The MSEs Sector has also been instrumental in bringing about economic
transition by providing goods and services, which are of adequate quality and are reasonably
priced to a large number of people, and by effectively using the skills and talents of a large
number of people without requiring high-level training, large sums of capital or sophisticated
technology (ILO, 2008:56). (Nepal et al., 2006) point out that, in recent decades, MSEs have
begun to utilize technology transfer as a strategic means of meeting challenges posed by the
globalization of business. In Ethiopia, great effort has been put towards promotion of the use of
technology by the MSEs.

1.6. Significance of the Study

Technology transfer to MSEs is one of the government priority areas in the struggle towards
growth and development. This study also could be seen as part of an element of growth effort in
identifying the factors that hinder the performance of MSEs on technology transfer.
The findings of this study would provide policy makers a ground for analyzing to structure
MSEs promotional packages and it also provide practical inputs that would help MSE’s office in
Arada sub-cities to take informed decisions in the problems encountered in a day to day
operations, besides to that MSE operators in Arada Sub city will have an opportunity to look
inward of their enterprises and analyze the factors particular to individual enterprises. At last
interested researchers also would be able to have a base for further study, this paper provided
substantial highlights before engaged in the study.

1.7. Scope of the Study

The FMSE office followed similar institutional frame work, policies, procedures, promotional
packages and created similar political-legal business environments in all sub cities of Addis
Ababa. Hence, the study conducted in one of the sub cities of Addis Ababa i.e. Arada sub city,
the outcome of the study is applicable to all MSEs in Addis Ababa.

The study will be focused only on the manufacturing sectors of WW, MW & L&G MSEs mainly
for the reasons of, data from manufacturing enterprises are easily measurable and the second

5
reason is that the pre assessment study showed that the selected manufacturing sectors are
commonly available in all sub cities of Addis Ababa, for all enterprises are established under
almost similar business environments, so the outcome of the study is applicable to all sectors of
MSEs.
The sample representing the population is will be interviewed and given questionnaires to
complete. Enterprise owners were the respondents to this study. Entrepreneurs or business
owners play the role of the manager responsible for making and implementing major technology
transfer decisions. They are also the employers and financiers of the enterprise. They implement
the operation of the technology available in the enterprise. Product, object, knowledge and
process technology transfer within the MSEs Manufacturing outlets are under focus in this study.
The researcher seeks to find out how the above independent variables have influenced the growth
of the micro and small manufacturing enterprises.

1.8. Limitations to the Study

Time was a challenge in conducting this study. To address this problem the researcher trained ten
research assistants during piloting and the entire study period. Due to the nature of work in the
catering industry, the respondents were busy and it was difficult to obtain information from
them. However, the researcher planned time schedules to fit their work schedules.

1.9. Organization of the study

This study paper organized in five chapters, the first chapter comprised of background of the
study, Problem statement, Objectives of the study, Research question, Limitation of the study
and the Scope of the study. Chapter two presents the theoretical and empirical related literature
to the study, while chapter three provides research methodology. Chapter four outlines data
presentation, analysis and interpretation and chapter five concluded and suggested some
recommendations.

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 CHAPTER TWO

2. LITERATURE REVIEW

2.1. Introduction
This chapter explores literature on the influence of technology transfer on the growth of Micro
and Small Enterprises (MSEs) with special focus on the AMC. The study Draw from five main
theoretical fields of study, they were, growth of enterprises, product skills technology transfer,
equipment/objects technology transfer; knowledge technology transfer and process technology
transfer.

2.2. Theoretical Review

A concept is an image or symbolic representation of an abstract idea. Chin and Kramer (1999)
define a concept as a “complex mental formulation of experience”. While the theoretical
framework is the theory on which the study is based. The conceptual framework is the
operationalization of the theory. Several theories have been put forward by scholars to explain
the field of entrepreneurship. This research was guided by the following theories:

2.2.1. Theories of Entrepreneurship

Entrepreneurship theories and research remain important to the development of the
entrepreneurship field.

Resources Based Firm Theory

According to the resource based firm theory definition of (Ghoshal, 2002), the firm comprises of
differentiated technological skills, complementary assets and Organizational routines and
capacities. Resources can be defined as “anything that could be thought of as strength or
weakness of a given firm.” Resources are “(tangible and intangible) assets that are tied to the
firm over a substantial period of time. In the opinion of Gottschalk (2007), resources can be
viewed as stocks and flows. In this study the resources are the independent variables which were
production skills, equipment, knowledge and process. Physical resources were the tangible
property the firm uses in production which includes the firm’s plant and equipment which is one
of the independent variable of this study. The human resources in a firm include knowledge,
training and the experience of the employees in the firm. In this study, the level of knowledge

7
achieved through training and experience is represented in better production skills and process.
Firm specific resources are developed, and used by the company to adapt to the changing
environment. The sources of a sustained competitive advantage can be knowledge, learning,
culture, teamwork and human capital (Barney, 2001). Barney (1991) and Wernerfelt (1984).
Identified two basic perspectives of the firm, namely the resource and the product
perspective. Barney (1991) has researched how resources contribute to the performance of one
single-business firm. He assumed that resources are (1) heterogeneously distributed across firms
and (2) cannot be transferred only with costs. Barney (1996) also identified four attributes of
resources: (1) value, (2) rarity, (3) imitability and (4) operability.
The resource based firm theory explains differences in firm performance. According to
Gottschalk (2007) resources influence firm performance. Resources can create and sustain
competitive advantages; however only a few of the many possible resources generate sustained
competitive advantages (Wade & Hulland. 2004).Barney (2001) altered the VRIO - value, rarity,
imitability and operability - framework of firm resource attributes. Operability was expanded
into substitutability, combination and exploration. Substitutability of a resource diminishes above
normal profits generated by a resource (Gottschalk. 2007). Exploration and combination
enable the company to utilize the resources to generate competitive advantages. Wade and
Hulland (2004) define six attributes of firm resources. Resource attributes, which ex ante limit
competition are value, rarity, appropriability. Immutability, sustainability and mobility ex post
limit competition.
Wade and Hulland (2004) suggest that while some resources generate competitive
advantages, others help sustain them. Technology transfer embodied in the four independent
variables of this study generates a competitive advantage and ultimately the firm’s growth.
Resources, which generate competitive advantages, can be thought of axes ante limitations to
competition, whereas resources that sustain competitive advantages can be identified as ex post
limitations to competition. Gottschalk (2007) considers a resource as anything that could be
thought to be strength in an enterprise.

2.3. Conceptual Framework

A conceptual framework is a hypothesized model identifying the module under study and the
relationship between the dependent, intervening and the independent variables (Mugenda &
Mugenda, 2003). This study aimed at examining the influence of technology transfer on the

8
growth of micro and small enterprises in Arada sub city. The independent variables for the
study are; production embodied technology transfer, objects/tools embodied Technology
Transfer, Person-embodied Technology Transfer and Process embodied. Enterprise growth (new
outlets, period of operation, customer turnover, profit margins, intangible assets, employment,
revenues and financing resources were treated as dependent variables. However the intervening
variables are; application access to appropriate and information technology by entrepreneurs.
The type /level of available technology, technology must be efficient, affordable and clean to
increase productivity, promote manufacturing, value addition, upgrade product quality, evolve
new designs and promote export oriented industries. Indigenous knowledge need to be improved
to offer competitive advantage. International/ government regulations and policies (ISO
compliance; eco-labeling /product standardization; this may influence MSEs growth due to
prevailing market forces that affect product growth and standardization, environmentally friendly
products fetch high prices hence higher profit margins. Products that are of high quality
standards attract more clients and hence higher profit margins.
Both tangible and intangible resources are a source of strength and competitive advantage. The
theory states that sources of competitive advantage include knowledge, learning, culture, human
capital and teamwork. The study was guided by the resource based theory in looking at the effect
of the transfer of technology to firm resources among them production skills, equipment/objects;
knowledge and process .Appropriate human resource also influence growth of MSEs because
they will be quick to adopt new technological equipment for product processing through training
on better and more advanced and appropriate skills. This will ensure technology is successfully
transferred and efficiently utilized and encourage innovation, adaptation and designing of new
products. Occupational health and safety procedures, clean working environment will motivate
the catering staff to increase volume of production, increased product quality, produce safe,
hygienically and clean products and minimize on the waste.
The conceptual framework shows that Technology embodied in foods and drinks (products)
influence enterprise growth positively due to the increase in the number of the customers served
per day. Adoption of latest technology in catering saves on lab our through: additional
employment in the capital goods sector where new machines are being produced, decreases in
prices resulting from lower production costs on account of technological innovations, new

9
investments made using profits due to technological change, decreases in wages as a
consequence of the initial job losses, and new products created using new technologies
The number of customers increase when there is value addition in the foods and drinks served in
a catering outlet e.g. the quality of rice served as a result of equipment embodied Technology
Transfer. The increase is as a result of better and higher quality products (food and drink).
Technology embodied in Objects/tools (equipment) result in higher production output that
enables the enterprise to meet deadlines and serve more customers within the same time e.g. an
oven with a higher production capacity.
Performance levels go up impacting positively on enterprise growth. Employees that are trained
transfer the knowledge to their methods of production resulting into better quality products .This
attracts more customers and impacts positively on enterprise growth. New technological
processes transferred to the enterprise for production purpose impact positively as the employees
are able to come up with quality products for sale to the customers who buy in greater quantity
and come in greater numbers.
The research therefore pursued four objectives; assess the influence of technology
transfers of production skills on the growth of Micro and small enterprises in Addis
Ababa City, to test the relationship between AMC support, technological information,
level of education and training, availability of finances and technological infrastructure
on transfer of technology among MSEs in AMC.
To discuss policy implications in regard to transfer of technology among MSEs in AMC.
To develop a model of technology transfer. The results of the study were used to
recommend appropriate policy interventions that might help formulate policy on
technology transfer for growth of MSEs.

10
Figure 2. 1 Conceptual Framework

2.4. Empirical Literature Review

2.4.1. Production Skills

Without access to technology, MSEs Lack the capability to produce efficiently, meet deadlines,
upgrade product quality and evolve new product designs. It is only MSEs with the capacity to
initiate improvements in products, processes and production organizations that take advantage of
the emerging opportunities as argued by (UNIDO, 2004).In the AMC sector entrepreneurs have
gradually moved from the old methods of production to contemporary methods of production in
order to save on labor when fewer more qualified staff is employed, food costs due to reduction
of waste, equipment costs when fewer and heavy duty equipment is used
(www.food.gov.uk).Productivity is an important economic factor which has a key role in
evaluating the economic growth. It is identified as the foundation for economic prosperity, a
prerequisite for national development and also an important indicator of organizational
competitiveness (Dedrick et al., 2003).According to Allen and Shonnard (2001) each and every

11
product has its own life cycle beginning when raw materials are extracted or harvested from the
earth and proceeds through a number of manufacturing steps until the product is delivered to
consumers, used and then disposed of or recycled.
Production capabilities refer to the skills that are necessary to efficiently operate a plant with a
given technology and the improvement of the technology over time. This includes for instance
process; product and engineering capabilities (Astrid et al., 2010).Richard Cantillon (1680-1734)
was the first of the major economic thinkers to define the entrepreneur as an agent who buys
means of production at certain prices to combine them into a new product. He classified
economic agents into landowners, hirelings, and entrepreneurs, and considered the entrepreneur
as the most active among these three agents, connecting the producers with customers. Jean
Baptise Say (1767-1832) improved Cantillion’s definition by adding that the entrepreneur brings
people together to build a productive item. New products often embody new ideas and
innovations and when these products are traded internationally, they transmit knowledge across
borders.
The local firms have to do reverse engineering if they have to benefit from this channel, which
depends on the skill content of the labor and local absorptive capacity (Kathuria,
1999). Substantial efforts are needed to lead the economy from subsistence to market oriented
production and from subsistence-based to an enterprise-based production pattern with enough
emphasis on comparative advantage of the regions. Enterprise development, even in products
with comparative advantages and unique opportunities is severely constrained in the absence of
technology development and transfer mechanism. Most of the growth of the standard of living,
measured by GDP/capital is the result of improvements in productivity (Kathuria,
1999).Productivity is the relationship between the output and the inputs used in production and it
measures the efficiency of the economy. The most common indicator is labor productivity e.g.
value added per hour of work, or per person employed. It is however only a partial measure of
productivity because its level and evolution over time depends on other factors of production,
above all on the amount of capital used in production. As machines and equipment are
substituted for labor, the labor productivity increases (ILO, 2005).
Workers have had to shift from the old traditional methods of production of food and drink to
faster and more efficient methods to meet the customer demands. Productivity at the
organizational level is affected by the level of competition which leads other organizations to

12
step up the development of their productivity (Dedrick et al., 2003). Increased productivity,
however, does not necessarily imply increased profitability.
Competition may result in lower prices, thus eroding improvement in margins. The beneficiaries
will then be consumers, who get more value added for the price paid (Dedrick et al., 2003).This
phenomenon is defined as consumer surplus. Higher productivity can be translated in to higher
real earnings for its employees. Moreover, it causes the cost of manufacturing to be reduced and
the customers to pay relatively low price. This role increases the market share (Tabatabae, 2000).
In the past it was enough to produce most foods traditionally. Enterprise owners have now had to
adopt new methods of production through technology to serve a wider customer demand.

2.4.2 Equipment/ Object Technology

The import of capital goods and machinery is among the major modes of technology transfer for
building industrial infrastructure and strengthening the recipient country’s technological
capability. This channel of technology transfer which is used by many LDCs particularly the
East Asian Newly Industrialized Countries (NICs) assisted these countries in accessing the
advanced technologies embodied in the machinery and equipment. However, the success of this
method of technology transfer in the development of the recipient country's local technological
capability relies on the level of industrial development together with the degree of technical and
managerial expertise and its absorptive capacity (Republic of Kenya, 1989).

Individuals or new establishments who are interested in endeavoring into the businesses need to
consider to at least getting some of the useful technological equipment or machineries in their
plants. However, as it involves high cost, thorough or careful planning should be undertaken by
the owner or a responsible manager before any technological equipment can be purchased. This
can be done through a rigorous investigation and cross referencing with those companies who
already use such equipment (Munira et al., 2011).
Liddle (2009) notes that some of commissary establishments thought that the tools and
technology in the restaurant industry is limited to basic appliances and tools without realizing
some complex equipment used. Grimes (2009) claims that some advanced features have
integrated on the kitchen appliances such as timers and digital temperature gauges, timers or
inaccurate temperature dials. Liddle (2009) reported that many restaurants and food service

13
operations have rapidly adopted the point-of-sale technologies or POS system to increase the
overall convenience of the dining experience and technologies improving the restaurant
operation as well as increased the repeat business.
The Technology Atlas Team identifies Object-embodied technology which can be called
"Techno-ware" and consists of tools, equipment, machines, vehicles, and physical facilities as
one of the components of technology. The increases in customers demand and volumes of
production have led many commissary food establishments in Ethiopia to adopt technology.
Blast chillers, freezers, steam jacketed kettle tilting skillets are among examples of equipment
that involve technological advancement in the sector to provide healthy meal options to the
customers. Means of technology transfer include acquisition of capital equipment and machinery
through trade, licensing (and/or franchising or distribution) agreements through which skills,
ideas and technical information are transferred and through the movement of experts and skilled
labor (Liddle, 2009). According to David etal., (2011), production and service equipment in
these enterprises include large equipment such as ranges, steamers, boiling pans, fish fryers,
sinks and tables, mechanical equipment such as peelers, mincers, mixers, refrigerators
dishwashers, utensils and small equipment such as pots, pans, whisks bowls and spoons.
Benner and Veloso (2006) contended that the implementation of technology in commissary food
service establishments is closely associated with the increased in productivity, quality, safety as
well as hygiene and cleanliness. Rodgers (2003) further noted that the application of
technological cooking equipment and preparation techniques have tremendously increased the
food production. Ikiara et al., (2011) defines technology as the integration of the physical objects
or artifacts, the process of production systems such as cook-chill, cook-freeze and sous- vide
have been introduced in certain areas of catering. The production systems come in the form of
centralized production using the skilled staff available to cook in bulk and then to distribute to
finishing kitchens, which are smaller in size, employing semi-skilled and unskilled labor. (Food
Standards Agency Publication, 2011). A growing range of kitchen equipment from cookers and
refrigerated storage to large ware housing systems comes with onboard computer control and
several products can additionally be specified with extra hardware and software to permit
continuous monitoring of the main equipment functions. Some appliances can also be specified
with a two way interactive link, enabling programme subject to frequent change (such as recipes)
to be downloaded to the appliance from the computer directly via cable or wireless hook up, or

14
via modern connection to the internet. The temperature monitoring of all refrigerators and
freezers within the establishment can be linked to a computer system. Several temperature
readings are sent to the computer each day and it can record temperature highs and lows, and any
unusual trends. Any temperatures outside the specified limits will be highlighted ( Equipment
Supplier’s Association, 2011).

2.4.3. Knowledge
According to Gibson (1994), the most effective way to accomplish technology transfer is to
transfer the people with the requisite knowledge to the arenas where that technology is needed.
As we move more rapidly into the full utilization of computers and related technologies this is
more evident than ever before, but there is a broader aspect of technology transfer which is easily
overlooked. That is the transfer of the fundamental scientific and technological knowledge and
skills to the larger numbers of people required in the work place to ensure that the technology is
successfully “transferred” and efficiently used. Capacity transfer includes provision of the know-
how and software not simply to manufacture existing products but, more importantly, to innovate
and adapt existing technologies and products, and ultimately design new products (Phillips,
2002). Low educational achievement leads to a general failure of most MSEs. Proprietors must
appreciate the role of technology in production processes, product quality and market
competitiveness. Even where they develop interest in new technology, their limited education
adversely affects the absorption capacity of acquired technology (ILO, 2005).

International movement of people is associated with nationals studying or working abroad for a
limited period and applying their new knowledge when they return. Cohen, (2004) argue that the
capacity to make use of external knowledge is a function of the level of prior related knowledge.
This prior knowledge includes basic skills, shared language and also knowledge about the last
Scientific and technological developments.
Buzz refers to the information and communication ecology created by face-to-face contacts, co-
presence and co-location of people and firms within the same industry and place or region. This
buzz consists of specific information and continuous updates of this information, intended and
unanticipated learning processes in organized and accidental meetings, the application of the
same interpretative schemes and mutual understanding of new knowledge and technologies, as

15
well as shared cultural traditions and habits within a particular technology field, which stimulate
the establishment of conventions and other institutional arrangements. Persons in a buzz
environment work together and interact with other skilled individuals; enterprises today have to
compete for survival, growth and profitability Managers within the industry have to learn to
adjust to change in line with the market demands for quality and value for money (British
Hospitality Association, 2009).In Ethiopia, universities, technical colleges and youth
polytechnics have introduced units with courses as a core unit so as to train the personnel for the
MSEs in AMC.

2.4.4. Process Technology Transfer

Firms must be able to create and commercialize a stream of new products and processes that
extend the technology frontier, while at the same time keeping a step or two ahead of their rivals
(Sheu, 2007).Simplifying an operation has been made possible by technology transfer.
Technology makes this possible through elimination of unnecessary movement by combining
two operations in to one or improving old methods (David etal., 2011).A mechanical potato
peeler is more efficient and faster than a knife. It saves time and gives a better product .The
International Journal of Business and Management

(August, 2009) further defines enterprise growth as the ability of enterprise to grow continually,
quickly and healthily through the optimization of the change speed between production factor
and production result in the development process. Business process re-engineering (BPR) is not
another technique for downsizing an organization. Re-engineering is not another quality
improvement, just-in time, or cycle 50 time reduction program. These activities typically focus
on improving the existing process making it easier and faster. Whereas re-engineering has the
goal of radically changing the processes, Business Process Reengineering (BPR) concerns the
fundamental rethinking and radical redesign of a business process to obtain dramatic and
sustained improvements in quality, cost, service, lead time and productivity (Gunasekaran et al.,
2002; Appendix 6).
The “driving force” behind effective business process reengineering efforts must be those
critical factors which influence the customer’s perception of value, and improve the firm’s
competitiveness. Business Process Reengineering Aims to achieve quantum improvements and

16
IT is the primary facilitator to achieve the requested goal of BPR (Limayem, 2006). In
enterprises Business Process Reengineering is seen in the use of mechanical equipment with
timers. This means the worker does not have to spend time checking on time. The BPR analysis
task typically consists of the following: Collecting data on the existing process, breaking the
existing process down into activities, capturing expenses, staff and materials information for
each activity, capturing the sequence and timing of the several activities, capturing information
flow and material flow through the process.
Production technology considers the methods and processes for production of goods and
services, whereas consumption technology considers methods, processes and techniques by
which a particular need or demand may be satisfied (Soliman et al., 1998).
A skilled worker is one who is able to complete a task in the minimum time, to the required
standard and with the minimum effort. Today, technology has benefitted the manufacturing
industry as the introduction of robots on assembly lines have allowed heavy goods to be created
quickly and efficiently. In today’s society when we talk about manufacturing and business output
this isn’t just limited to factories anymore. (Soliman et al., 1998).
Micro and small enterprises that have changed from the old methods of production to faster, new
and modern methods have higher production outputs and can serve a wider market. Technology
transfer has enabled for processes to be simplified with the objective of making work easier
through elimination of unnecessary movement, combination of two operations into one or
improvement of methods (Katz, 1974). An example is a catering outlet that uses the traditional
method in preparation and cooking of French fries. (Chips).The process is long and tiring as
compared to where modern technology in form of electric deep fat fryers and vegetable slicers
are used. Labor turnover can be an important channel for technology transfer and technology
diffusion. In fact the ability of local firms to absorb new technologies is contingent on the fact
whether there is a labor turnover. Not only are new technologies diffused faster to MSEs, the
productivity of local firms also increases through labor turnover. This is because the value
addition of MNC trained worker is much higher if (s) he works for a local firm than for the
foreign firm as (s) he is one among many in the MNCs. In developing countries, technology
acquisition often amounts to adapting existing methods to local circumstances (Evenson
&Westphal, 1995).

17
A research carried out by Jens von Axelson in 1989 on the development of production methods
for transfer to MSEs had the objective of creating better understanding regarding diffusion of
production methods, in a network context, to Swedish MSEs among industrial researchers and
other interested parties. He found out that production method diffusion is easy in theory but hard
in practice. The MSEs characterized with little resources and varying leadership implies that a
production method needs to be implemented according to general implementation programme
such as Industry. This phase could be supported by a network activity where the method is
presented and implementation issues and monitoring systems are described in a do-like-this
manner. There are production methods that could help in these situations. Jens von Axelson
(1989) found out that dissemination of new production methods follows predictable patterns and
the knowledge of innovation diffusion is a great factor to consider in the national innovation
system where the method is presented and implementation issues and monitoring systems are
described in a do-like-this manner. There are production methods that could help in these
situations. He found out that dissemination of new production methods follows predictable
patterns and the knowledge of innovation diffusion is a great factor to consider in the national
innovation system.

Figure 2. 2 . Contingent Effectiveness Model of technology transfer

Source: Resource Policy (2000)

18
Figure 2.4 presents the elements of the contingent effectiveness model of technology transfer.
The model draws its name from the assumptions that parties to the technology transfer have
multiple goals and effectiveness criteria. The model has five broad dimensions which determine
effectiveness. They include characteristics of the transfer agent, characteristics of the transfer
media, and characteristics of the transfer object, demand environment, and characteristics of the
transfer recipient. The arrows in the model indicate relations among the dimensions while broken
lines indicate weaker links. Over the past fifty years MSEs establishments have come up with
production and service designs unit that allow a smooth flow of production process from the
point of delivery to the point of sale with the minimum obstruction.

2.5. CRITIQUE OF EXISTING LITERATURE

The literature reviewed leaves no doubt on the importance of technology transfer to the growth
and competitiveness of enterprises for economic and industrial growth. Several studies have been
carried out in this field. Maskus (2010b) in his study agrees that the technology transfer concept
is not only concerned about the transfer of technological knowledge or information but also the
technology recipient’s capability to learn and absorb technology into the production function
while a study carried out in Malaysia (2012) on the effect of application of technology devices in
commissary establishments and its application on productivity found that the benefits brought
about were vast. Studies carried out in the UK by Brunnel, et al., (2011) on fostering the
development of technologies and practices to reduce the energy.

A study carried out by Murray and Black (2000) found out that training and education in contract
catering management are important and there is a need to sustain interest in training to gain the
application of technological cooking equipment maximum output in contract catering
organizations. With high technological capabilities, a motivated workforce and an effective
management, higher value-added products and services will be produced at competitive costs
(NPC report, 2003).The study by Murray and Black (2000) was limited to only contract catering
enterprises in a developed country. Albadvi and Keramati (2006) also provided the satisfactory
evidences to show that IT implementation increased productivity when supported by rational
complementary investment. Technology is embodied in production techniques, use of
technological tools, well trained employees and new and better processes of production.

19
Technology transfer is the engine of growth of enterprises. According to Gunasekaran et al.,
(2002)
Business Process Reengineering (BPR) concerns the fundamental rethinking and radical redesign
of a business process to obtain dramatic and sustained improvements in quality, cost, service,
lead time and productivity. It is clear from the literature reviewed that technology transfer is vital
for enterprise growth. However, the studies have concentrated on the importance of technology
transfer to the growth of large foreign multinational enterprises and have failed to address the
same in relation to MSEs in Ethiopia.

2.6 Summary of Literature

Empirical and theoretical literature reviewed in this study showed that technology is important
and vital for enterprise growth. Enterprises need to bring in technology embodied in production
skills; equipment, knowledge and processes to enable them grow in to large entities. They
therefore need access to information on the importance of trained employees, adoption of new
technological equipment for product processing.

Literature relevant to the current study was extensively reviewed. The study was guided by a
number of theories. The theories included Economic entrepreneurship, Psychological
entrepreneurship, Sociological entrepreneurship, Schumpeter and the resource based theories.
Relationship between the independent variables and the dependent variable were presented on a
conceptual framework. Growth was the dependent variable while the independent variables were
production skills, equipment, knowledge and process embodied technology transfers.
Once this information is gained by the entrepreneurs in the AMC supported MSEs which was
the focus of this study, the enterprises will grow continually, quickly and healthily through the
optimization of the change speed between production factor and production result to entities that
will contribute positively to National economic growth. Literature reviewed under empirical
review confirmed that studies had been done on technology transfer and its influence on
enterprise growth. Critique on the existing literature on the study and this formed the foundation
for the research study.

20
2.7 Research Gap
The study aimed at bridging the gap in knowledge on the transfer of technology among MSEs in
AMC, Addis Ababa, Ethiopia. This would help shape policies that will eventually facilitate
transfer of technology. By understanding factors that influence transfer of technology, control
measures can be put in place to encourage and sustain productivity and quality of products.

21
 CHAPTER THREE

3. RESEARCH METHODOLOGY

3.1. Introduction

Under this section a number of external and internal factors are will be taken into account to
identify the major factors affecting that influence of technology transfer on the growth of
manufacturing MSEs in AMC. This section provides an overview of the study’s research
approach which lays within the mixed methods strategies, the chapter discusses procedures and
activities under taken, that includes research design, questionnaire design, data collection,
sampling strategy, data processing and analysis and instrument development.

3.2. Research Design

This study will be applied both descriptive and explanatory type of research; in order to enable to
describe the state of affairs as it existed at the time of study period, and also to explain the
relationship between variables that correlated to estimate the integrated influence of the factors
on technology transfer. Then the study can be described and critically assessed the factors
affecting that influence of technology transfer on the growth of manufacturing MSEs AMC in
Arada sub-city of Addis Ababa. All relevant Data’s are collected from a single point in time
through cross sectional method. A qualitative and quantitative method of data collection is
applied so as to compensate each method’s weaknesses with strengths from the other method. In
Designing of the Instruments a questionnaire will be comprised of a Five Point Likert Scale
questions were constructed, the type of scales used to measure the items on the instrument is
continuous scales(strongly agree to strongly disagree) , multiple choice questions and interview
questions developed in consultation with literature, advisor’s comment and through pilot study
test.

3.3. Research Approach

In this study, descriptive type of research used, relevant data collected from primary and
secondary data sources. The primary data mainly gathered via survey with structured
questionnaires using Linkert scale that ranged from one to five where one was strongly disagree,
two was disagree, three was undecided, four was agree and five was strongly agree. Secondary

22
data was collected from MSEs area. The data gathered via structured questionnaire encoded on
SPSS then analyzed using graphs, tables and figures.

3.4. Sample Size Determination

Sample is a portion of general population having uniform/the same character. Sampling is taking
certain limited number from huge population to test/examine for generalization of the total
population character. In this study the sample was a population of existing small and micro
enterprises in Arada manufacturing college. For selected samples the questionnaires was given to
collect the needed information or data.
There are several approaches to determine the sample size. These include using a census for
small populations, imitating a sample size of similar studies, using published tables, and applying
formulas to calculate a sample size (Salem, 2016).
To determine the appropriate sample size, the basic factors to be considered are the level of
precision required by users, the confidence level desired and degree of variability. The ‘degree of
precision’ is the margin of permissible error between the estimated value and the population
value. In other words, it is the measure of how close an estimate is to the actual characteristic in
the population. The level of precision may be termed as sampling error. The confidence or risk
level is ascertained through the well-established probability model called the normal distribution
and an associated theorem called the Central Limit theorem. Normal curve results whenever
there are a large number of independent small factors influencing the final outcome. The degree
of variability in the attributes being measured refers to the distribution of attributes in the
population. The more heterogeneous a population, the larger the sample size required to be, to
obtain a given level of precision (Guma, 2012). Yamane (1967) formula was used so as to
determine representative sample size of target as in equation (1).
N
n=
1+ N (e¿ ¿2) ¿
……………………………………………… equation (1).

Where n is sample size N is total population = 192 and e is desired level of precision = 5%

192
n= =130
1+192(0.05¿¿ 2)¿

23
After the determination of sample size, the allocation of these sample size to each sectors of
MSEs in the study area was carried out through proportional allocation method of stratified
random sampling. The proportional allocation method was originally proposed by (Bowley,
1926)

¿=n ¿ ¿ ……………………………………………… equation (2).

N¿

The sample size in each sectors were calculated using equation 2 and showed in table 3.

Table 1. Sample size in each sectors

Sector Number (Ni) Sample(ni)

Wood Work 103 70
Textile & Garment 45 30
Metal Work 44 30
Total 192 130
Source: field survey

3.5. Variables and Measurements

The lack of universally accepted standard performance measures left the door open to
businessorganizationstodecideandchooseitsownperformancemeasuresthatmight not truly reflect
their technology transfer. Such technology transfer measures include but not limited to: market
share, sales volume, company reputation, return-on-investment (ROI), profitability, and
established corporate identity. While most of these performance measures are appropriate for
large corporations, they are not always perfectly applicable to small businesses.

In this study, business profitability perceptions of owners and operators used as a dependent
variable to assess and measure the performance of MSEs. Here the perception of profitability of
a business from different angles used as the measure of the dependent variable performance of
enterprises involved in the survey. This is mainly because of three reasons. First, other studies
indicated, MSEs are more focuses on profitability than other modes of performance measures.
Second, for microenterprises are characterized by little or no education and without record
keeping hence most measure profitability by covering household consumptions. Also growth in
employment level of the enterprises would not be another appropriate alternative measure of
performance because; MSEs are primarily established as a source of self-employment. The

24
independent variables are politico-legal, working premises, technological, infrastructural,
marketing, financial, management and entrepreneurial variables.

3.6. Instruments of Data Collection

3.6.1. Primary Data Collection
Primary data will be collected from MSE operators through questionnaire. This study can
applied a well-designed Five point Likert scale questionnaire to gather primary information, this
was completed by owner managers/or operators of the MSEs. Besides to that, an interview
questions having five open questions are developed.

3.6.2. Secondary Data Sources

Complete information about the MSE operators of the study area, Policies, support rendered,
collected from FMSE office database and Magazine. Besides to that a variety of books,
published and/or unpublished government documents, websites, reports and newsletters had been
reviewed to make the study fruitful.

3.7. Procedures of data collection

The complete list of operators are will be arranged by sectors and numbers representing the list

were written on paper and rolled and put in a hut for draw, the required number of samples from

each sector was drawn using lottery technique. The name and address of the number drawn taken

from the list. The structured five point Likert skale questionnaire translated into Amharic

prepared, to ease for those who don’t write and read proportional pilling used to grade their

factors. Interview is conducted with the selected MSE operators.

3.7.1. Data processing and analysis

3.7.2. Data Processing
In the data processing procedure editing, encoding, classification and tabulation of the collected
data will be made manually. Data clean-up can be made to detect anomalies, errors and
omissions in responses and checking that the questions were answered accurately and uniformly.

25
Numerical assigned to reduce responses into a limited number of categories or classes. Data
having the common characteristics was placed together and in this way the entered data was
divided into a number of groups. Finally, tabulation and pie charts were used to summarize the
raw data and displayed. Transformation of the processed data to look for patterns and
relationship between and/or among data groups by using descriptive and inferential (statistical)
analysis. The Statistical Package for Social Science (SPSS) is used to analyze the data obtained
from primary sources.

3.7.3. Descriptive Analysis

Descriptive analysis is used to reduce the data in to a summary format by tabulation and measure
of central tendency. Moreover, pie chart is also used to describe the general characteristics of
enterprises. The reason for using descriptive statistics is to compare the different factors.
Besides, the interview questions are also analyzed using descriptive narrations through
concurrent triangulation strategy.

3.7.4. Inferential Analysis

Inferential statistics allows to infer from the data through analysis, the relationship between two
or more variables and how several independent variables might explain the variance in a
dependent variable. The following inferential statistical methods can be applied for the study.

3.8. The Pearson Product Moment Correlation Coefficient

Conclusions are established on the bases of results, such generalization is therefore, and made for
the population from the samples it speculated. Pearson Product Moment Correlation Coefficient
is a widely used statistical method for obtaining an index of the relationships between two
variables when the relationships between the variables is linear and when the two variables
correlation are continuous. To ascertain whether a statistically significant relationship exists
between politico-legal, working premises, technology, infrastructure, marketing, finance,
management and entrepreneurial factors with firm’s performance. Correlation
coefficientcanrangefrom-1 to +1.Thevalueof-1 represents a perfect negative correlation while a
value of +1 represents a perfect positive correlation. A value of 0 correlations represents no
relationship.

26
 CHAPTER FOUR

4. RESULT AND DISCUSSION

4.1. Introduction
This section is organized by presenting the general information about MSEs, were presented and
analyzed and data collected through questionnaires and interviews were analyzed at the same
time. On top of that, the results of Pearson’s Product Moment Correlation Coefficient and
regressions were also analyzed and presented. A total number of 130 questionnaires were
distributed and among them 130 were completed by the respondents and returned back, this
represented a response rate of 100% .Out of the total sample of 130 questionnaires administered

27
70 were from Wood, 30 Metal work and 30 from Textile & Garment (TG) MSE sectors. The
number of questionnaires filled and returned back from WW, MW and TG were 70, 30 and 30
showed a response rate of 100%, 100% and 100% respectively.

4.2. General Characteristics of the Enterprises

4.2.1. MSEs by Sectors
Under this subsector as much as possible, the researchers showed in details as bellows.

4.2.2 The main sources of skill development or MSE’s

To capture information regarding the relative importance of the various main sources of skill
development, enterprises were asked whether they ever received skill from each of a given list of
sources of skill development. The following figure shows the main sources of skills.

Figure 4. 1 Source of skills development

Source: field survey 2016

28
From here it can be concluded that the major sources of skill development for MSEs in Arada
Sub city was the informal sources that totally accounted 100 % ( on job training 51.5%, personal
work experience 28.5%, government training 15.4% Experience from cluster 2.3% Technology
transfer institution 1.5% and pear to pear learning 0.8 %) followed by skill development. From
the interviewee it could be understood that the reason for emphasizing on informal source of skill
development were that the requirement of skill is relatively easier since such sources usually take
place among parties with intimate relationship and trust of each other.

Figure 4. 2 The proportion of MSE Sectors respondents

Source: From Field survey, 2016
Among the sampled sectors of Micro Enterprises the majority of them were engaged in Wood
work(WW) (53.8%) followed by Leather and garment (T& G) (23.1%), and Metal work (MW)
(22.48%).This division of MSEs by sector type was believed to be helpful to study each sector
critical factors that affect the performance of MSEs. This is because firms in different sectors of
the economy face different types of problems. That means the degree of those critical factors in

29
Leather and garment T& G sector may differ from the factors that are critical to Woodwork
(WW), Metal work (MW) work sectors.

Figure 4. 3. Technical skill improvement opportunities from the Arada Manufacturing College
Source: From Field survey, 2016

From the response of MSE operators it can be concluded that the majority of respondents replied
that received technical skill from AMC in Arada Sub City 72.3%, and 27.7% Yes and No,
respectively. Hence from here it can be concluded that majorities of the MSEs they gained
technical skill development from AMC.

30
Figure 4. 4 .Overall assessment of the adequacy of skill improvement trainings in terms of
addressing the skill gaps they faced
Source: From Field survey, 2016
As we understand from the above respondents the adequate of skill improvement trainings in
terms of addressing the skill gaps they faced were 36.2% of the were said that adequate,49.2%
inadequate and 14.6%undecided.

Part 3. Technology Transfer

• Did you have linkage with technology transferring centers established by the Arada
Manufacturing College?
As understand from the linkage with technology transfer centers. We said that yes,

31
Figure 4. 5 Linkage with technology transferring centers established by the Arada Manufacturing
College
Source: From Field survey, 2016

As understand from the linkage with technology transfer centers. We said that yes, 46.2%, and
NO 53.1% and missed value 0.8%. The MSEs from technology transfer linkage is medium.

32
Figure 4. 6 How often the firm been involved in Technology transfer
Source: From Field survey, 2016

As understand the SMEs involvement with technology transfer. We said that Not Yet 50.0%,
Once 26.9%, 2-3 Time 17.7%, and More than 3, 5.4%. The MSEs involvement in technology
transfer linkage is low.

Does the new technology transferred to your firm positively impacted on your productivity?

33
Figure 4. 7 The new technology transferred to the firm positively impact
Source: From Field survey, 2016

As we observed from the above pie chart most of the respondents said that yes, and some of the
were said that no were i.e. 75.4%, 24.6%, respectively.

Part 4. Barriers of Technology Transfer

• The main berries in the process of technology transfer were, Low technical skill in
utilizing the technology

34
Figure 4. 8 The main berries in the process of technology transfer were, Low technical skill in
utilizing the technology
Source: From Field survey, 2016

The main berries in the process of technology transfer were, Low technical skill in utilizing the
technology where from the field survey were 45.0%, 38.8%, 10.9% 4.7% and 0.8% were
strongly agree, agree, somewhat agree Disagree and others respectively. From this one what we
understands was some of them were could knew the significance of technology on their work. So
if they got new fabricated technology they can accept without any doughty.

The main berries in the process of technology transfer were, high cost of technologies

35
Figure 4. 9 The main berries in the process of technology transfer were, high cost of technologies
Source: From Field survey, 2016

For the main berries in the process of technology transfer were, high cost of technologies, the
respondent’s said that ,as we observed from the statistical output of pie chart 46.9% strongly
agree, 41.5% agree, 5.4% disagree and 6.2% somewhat agree that means the cost of technology
transfer it does not highly affected the technology transfer.

9. The main berries in the process of technology transfer were, lack of finance for acquiring
technologies

36
Figure 4. 10 The main barriers in the technology transfer, Lack of finance
Source: From Field survey, 2016
The lack of finance for acquiring technologies transfer could be affected the process i.e. 66.9%,
20.0%, 8.53% 8.5%, 3.8% and 0.8% respectively strongly agree, agree, somewhat agree,
Disagree and Strongly disagree. This statistical data collected from the survey of the field. So we
understand from this was financial issue can play a great role for the technology transfer among
AMC.

10. The main berries in the process of technology transfer were, difficulty of integration of
new technology with existing one

37
Figure 4. 11 The main barriers in the process of technology transfer, Difficulty of integration of
new technology with existing one
Source: From Field survey, 2016

As we saw from the above statistical data analysis could strongly agree 55.0%, agree 33.3%,
somewhat agree 9.3% and Disagree2.3% on the difficulty of integration of new technology with
existing one. Therefore, on the integration of new with existing technology transfer can be a
challenge for the technology transfer among Arada Manufacturing College.

The main berries in the process of technology transfer were, lack of organizational support

38
Figure 4. .Lack of organizational support in technology transfer
Source: From Field survey, 2016

As the above we saw, from the statically description on the collected result showed 50.0%
strongly agree, 33.1% agree, 10.0% somewhat agree and 6.9% dis agree interpreted, so that
almost half of the respondents indicated that the main berries in the process of technology
transfer were, lack of organizational support as we mentioned above.

Part 5. Linkage with Business Development Institutions

How frequently does the government support on skill improvement and technology transfer areas
delivered to your firm?

39
Figure 4. 12 How frequently does the government support on skill improvement and technology
transfer areas delivered to your firm
Source: From Field survey, 2016

The respondents said that government support on skill improvement and technology transfer
20.0%, 50.8%and 29.2% respectively represented of then, occasional and rarely these means
government support on skill improvement and technology transfer does not enough.

11. Do experts assigned by the government in areas of technology transfer and skill
improvement make frequent contact and follow up to your firm?

40
Figure 4. 13 How frequently does the government support on skill improvement and technology
transfer areas delivered to your firm
Source: From Field survey, 2016

The experts assigned by the government in areas of technology transfer and skill improvement
make frequent contact and follow up to your firm, the respondents answered 62.3%, 26.2%and
11.5% respectively yes, no and I do not know. So they do not know the government interference
for the support of them.

41
Regression and Hypothesis Testing
The data collected from the sample gave the regression results from SPSS package as shown in
tables below. The data was analyzed at 5% level of significance (α=0.05).

Regression Results
Table 1.1: Model Summary

Predictors: (Constant), X5, X4, X3, X1, X2

Table 1.2: ANOVA

Predictors: (Constant), X5, X4, X3, X1, X2

An F Test was performed to determine whether the overall model was useful or not as shown in
Table 1.2 above. Ho; β 1= β 2= β 3=β = β 5=0 Ha=At least one β I is not equal to zero
F=38.846, p- value = 0.000

This implies that p < α, there is sufficient evidence to show that the overall model was useful.
The coefficient of Adjusted R2=0.809 as shown in Table 1.1.This means that 80.9% of all
factors influencing technology transfer can be explained by government’s support, technological
information, education and training, availability of finances and technological infrastructure. The
remaining 19.1 % are other factors that are unexplained in the model.

Table 1.3 : Coefficients

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Y = β0+ β 1X1 + β 2 X2+ β 3X3 +β 4X4 + β 5X5 + Є Y = 0.376+ 0.151X1 + 0.014 2 X2+
0.806X3 -0.093 4X4 -0.015X5 where;

X1 = Government’s support X2 = Technological Information X3 = Education and training

X4 = Finances X5 = Technological infrastructure

To test on independent variables that predicted technology transfer t tests were performed and p-
values obtained as shown in Table 1.3 above.

Ho: β1=0 where i=1, 2, 3, 4 or 5 Ha: β1≠0

The coefficient of government’s support is positive with p-value = 0.305 and  =0.05, 0.305
>0.05 therefore we fail to reject the null hypothesis. This means that there is no significant
relationship between government’s support and technology transfer among MSEs in arada
manufacturing college.

This is consistent with a study by Moyi and Njiraini (2015) that pointed out that government
lacks a coherent and comprehensive science, technology and innovative policy to guide decision
making. Ngahu (2022) suggested that government policies should encourage assistance programs
which promote development of appropriate technologies.

The coefficient of accessibility to technological information was positive and but not significant
at 5% level of significance with a p-value of 0.934.This implied that access to technological
information was not significant to technology transfer among MSEs in arada manufacturing
college. We therefore fail to reject the null hypothesis since 0.934>0.05. This differs from a
study by Ngahu (2012) which pointed out that lack of information is a key problem affecting
MSE’s access to technology . There is need for a supportive policy to encourage establishment of
documentation centers and information network to provide information to MSEs at the
affordable prices. Harper (2017) also suggested that technologies used by SSEs in developing
countries might be inappropriate because their choice is based on insufficient information and
ineffective evaluation.

The coefficient of education and training was positive and significant at 5% significance level.
The p- value =0.000, therefore 0.000 ¿ 0.05 we therefore reject the null hypothesis. Therefore

43
there was significant relationship between education and training and technology transfer among
MSEs in arada manufacturing college. This is consistent with study done before that arada
manufacturing college has put a lot of emphasis on human capital as a way of facilitating
economic growth. Training seeks to modify the entrepreneurs’ technical and interpersonal skills
in order to achieve their goals.

The coefficient of availability of finances and technology transfer was negative but not
significant at 5 % level. The sig value used to test the hypothesis was given by 0.169. We
therefore fail to reject the null hypothesis. We conclude that there was no evidence to suggest
that finances influence technology. arada manufacturing college operators suffer from inadequate
financial capacity to acquire available technology and infrastructure. Technology transfer and
development process requires huge investment and adequate infrastructure. Most entrepreneurs
are limited in accessing financial assistance due high interest rates and contingent measures set
by financial institutions. This is consistent with a study done by Ngahu (2012) who suggested
that access to credit is indicated as a key problem for small scale enterprises. This affects
technology choice by limiting the number of alternatives that can be considered. Romjin (2011)
points out that lack of finance, skill and expertise depress investments in technological
effort .Dababi (2013) indicated that lack of finance leads to outdated and inefficient
technologies.

The coefficient of technological infrastructure was negative but not significant at 5 % level. The
p- value got was 0.926; we therefore fail to reject the null hypothesis. We conclude that there
was no evidence to suggest that technological infrastructure influences technology. This is
consistent with a study done by Romijn (2011) who pointed out that whereas technological
hardware (equipment hardware) can be transferred, the capacity to make use of that hardware has
to be developed through a gradual learning process resulting from purposive efforts to assimilate,
adapt and modify the new technology. Upgrading of technological capacity is essential to
satisfying customer demand for new or imported products. Moyi and Njiraini (2015) pointed out
that MSEs are constrained by limited access to appropriate technology and key technological
infrastructures (power and electricity) and high importation costs of equipments that limit
technological capacities of MSEs.

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 CHAPTER FIVE

5. CONCLUSIONS AND RECOMMENDATIONS

5.1 conclusions

In this chapter findings from the outcome of analysis were listed and conclusions were also made
based on the findings and possible alternative solutions are forwarded as recommendations.
The study concludes that education and training is the key determinant of transfer of technology.
The study also concludes that technological information, finances, technological infrastructure
and government’s support do not significantly influence transfer of technology among MSEs.
Ethiopia’s MSEs are characterized by restricted levels of technology, inappropriate technology
and inadequate institutional capacities to support adaptation and absorption of modern
technological skills. MSEs remain one of the most important sectors of Ethiopia that contribute
significantly to the Gross Domestic Product (GDP), create employment and earn foreign
currency through export.
One of the main factors that influences the success or failure of an enterprise is technology.
There is need to promote our MSEs on issues of quality, productivity and market access facilitate
generation and distribution of wealth and job creation in the country for the benefit of all. In
terms of policy government should enhance technological capability of entrepreneurs.

45
5.2. RECOMMENDATIONS

To promote skills acquisition and development within the MSE sector, programs should be
developed to encourage skills upgrading in entrepreneurs that could help on technology transfer.
This should be facilitated by enhancing Technical Training Institutions, MSE training and
Demonstration centers, Youth Polytechnics, , Skills Development Centers to offer appropriate
skills to MSEs.
 The government, financial institutions and Micro finance Institutions should implement
special credit programs to MSEs in order to facilitate technology transfer.
 Which may help to solve constraints such as research and development, collaborate with
universities and research institutes to facilitate technological information and regular
technology markets.
 They also help to disseminate technical knowledge within the sector, provide forum for
technological learning and advance soft loans to their members.
 The costs of electricity and internet should be reduced reasonably in order to help
entrepreneurs to reduce operational costs.
 Taxes on some tools and equipment used by MSEs should be reduced to make those
items affordable.
 The next comer of the researchers will be focusing on the tools that we don’t use more
they can investigated.

46
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 APPENDIXES

QUESTIONNAIRE

ARADA MANUFACTURING COLLEGE

RESEARCH AND PUBLICATION UNIT

ANNEX - A
ARADA MANUFACTURE COLLEGE
ARADA MANUFACTURE COLLEGE RESEARCH TEAM, ADDIS ABABA, ETHIOPIA
EMAIL: [email protected]
QUESTIONNAIRE FOR ANALYSIS OF FACTORS OF TECHNOLOGY TRANSFER
AMONG MSE AND AMC
SECTION 1: INTRODUCTION
This is to conduct a research entitled ANALYSIS OF FACTORS OF TECHNOLOGY
TRANSFER AMONG MSE AND AMC. So you are one of the respondents selected to
participate in this study. The information you are providing will be of great importance in
producing current, practical and reliable output that will inform readers of the study.
The information you will provide is confidential and only used for the academic purpose.
Thank you in advance for your kind cooperation.
Instructions
No need of writing your name
For multiple choice questions indicate your answers with a check mark (√) in the appropriate
block.
Part 1. The main sources of skill development
1. What were the main sources of skill development for you and others working with you?
/More than one responses were possible/
A. On job training B. Personal work experience C. Government Training Centers D.
Experience from clusters E. Technology transfer institutions F. Pear to pear learning
2. What is the main activity of the enterprise?
A. Textile and garment B. metal work C. Wood work

50
Part 2. Access to Skill improvement Training Opportunities from Arada
Manufacturing College
3. Did you receive technical skill improvement opportunities from the Arada
Manufacturing College?
A. Yes B. No
4. What is your overall assessment of the adequacy of skill improvement trainings in terms of
addressing the skill gaps you faced?
A. Adequate B. Inadequate C. Undecided
Part 3. Technology Transfer
5. Did you have linkage with technology transferring centers established by the Arada
Manufacturing College?
A. Yes B. No
6. How often has your firm (SME) been involved in technology transfer?
A. Not yet B. Once C. 2-3 times D. more than 3
7. Does the new technology transferred to your firm positively impacted on your productivity?
A. Yes B. No
Part 4. Barriers of Technology Transfer
8. The main berries in the process of technology transfer were, Low technical skill in utilizing
the technology
A. Strongly Agree B. Agree C. Somewhat agree D. Disagree E. Strongly
disagree
9. The main berries in the process of technology transfer were, high cost of technologies
A. Strongly Agree B. Agree C. Somewhat agree D. Disagree
E. Strongly disagree
10. The main berries in the process of technology transfer were, lack of finance for acquiring
technologies
A. Strongly Agree B. Agree C. Somewhat agree D. Disagree
E. Strongly disagree
11. The main berries in the process of technology transfer were, difficulty of integration of new
technology with existing one
A. Strongly Agree B. Agree C. Somewhat agree D. Disagree
E. Strongly disagree
12. The main berries in the process of technology transfer were, lack of organizational support
A. Strongly Agree B. Agree C. Somewhat agree D. Disagree
E. Strongly disagree

51
 Part 5. Linkage with Business Development Institutions
13. How frequently does the government support on skill improvement and technology transfer
areas delivered to your firm?
A. Often B. Occasionally C. Rarely
14. Do experts assigned by the government in areas of technology transfer and skill improvement
make frequent contact and follow up to your firm?
A. Yes B. No C. I don’t know

52