SUBMITTED BY-

MEHAK BHARGAVA
B.COM HONS.
ROLL NO. 082038
MEANING OF TECHNOLOGY TRANSFER
Technology transfer is the process by which basic science research and
fundamental discoveries are developed into practical and commercially
relevant applications and products. Technology Transfer personnel evaluate
and manage invention portfolios, oversee patent prosecution, negotiate
licensing agreements and periodically review cooperative research
agreements already in place. Part of the technology transfer process involves
the prosecution of patents which is overseen by the national Patent and
Trademark Office. Individuals with advanced degrees in the biomedical
sciences are needed to review and process patents in the biotechnology
field.

TECHNOLOGY TRANSFER FUNCTIONS

TT Function: Coordinate

Coordinating between technology users and developers, between

researchers and manufactures is an important element of technology
transfer. Access to relevant internal and external resources to
individual projects and enterprises has to be enabled.

TT Function: Nurture

A main ingredient for moving technology from a research laboratory to

a new business enterprise successfully is an environment that is
supportive of entrepreneurship. This needs to be encouraged by
providing guidance, counseling and resources.

TT Function: Link

Cataloging resources related to business enterprises and connecting

would-be entrepreneurs/researchers and other technology developers
to outside groups and organizations which can help in the process of
starting new products, companies etc. Such linkages provide referrals
for individual business counseling, sources of financing or the names of
individuals who can help with a particular facet of business
development.

TECHNOLOGY TRANSFER ACTIVITIES

Technology Transfer Activities includes:
• processing and evaluating invention disclosures
• filing for patents
• technology marketing
• Licensing
• protecting intellectual property arising from research activity
 • assisting in creating new businesses and promoting the success of
existing firms
The result of these activities will be new products, more high-quality jobs,
and an expanded economy.

ASSESSING COMMERCIAL POTENTIAL

Commercialization is one effective method of transferring technologies.
Establishing a technology's prospects for commercial success depends
largely on five factors:

1. Technical Development: The time, materials, and personnel needed

to reduce the technology to practice and protect rights to the resulting
product.
2. Regulatory Clearance: The testing needed to demonstrate the
product's utility and safety, and to meet federal regulatory
requirements and to minimize or manage associated risks.
3. Manufacturing Requirements: The facilities, people, and equipment
needed to make the product.
4. Market Development: The plan for successful marketing of the
product, created by assessing perceived need for the product, size of
potential market, expected sales, advantages over competing
products, and the cost of promoting the product.
5. Financial Feasibility: The development costs, costs to produce,
operating expenses in relation to sales potential, net profits, potential
liabilities, and return on investment.

TECHNOLOGY TRANSFER INITIATIVE WITH

MINORITY AND SMALL BUSINESSES AND
MANUFACTURERS

The initiative's several goals include establishing a marketing strategy to

provide minority businesses with technology transfer opportunities,
assisting with establishing a minority technology transfer consortium,
developing and seeking funding for minority industrial fellowships,
strengthening minority employee recruitment through the consortium;
linking the Science Education and External Relations program with the
Technology Transfer Initiative, providing minority businesses and various
divisions with technical assistance as it relates to technology transfer, and
establishing a tracking system to provide follow-up on all activities.
 CONSTITUENTS OF TECHNOLOGY TRANSFER
PROCESSES
• Technology Transfer
• Technology Promotion
• Technology Deployment
• Technology Innovation
• Technology Development
• Technology Research
• Technology Assessment
• Technology Information and communication
• Technology Investment
• Technology Collaboration
• Technology Commercialization

TECHNOLOGY IMPLEMENTATION POTENTIAL FOR

SUCCESS
TIPS METHOD
Sample Technology Transfer TIPS

Communication Factors TIPS:

Diffusion of information about new technology is predominantly a process of

communication. Anything that impedes communication within the
organization, as well as within the environment it interacts in, will jeopardize
the successful implementation of the technology within the organization.

Financial Factors TIPS:

A primary concern is the fiscal justification in terms of returns on the

investment and the irreversibility of the investment, where adoption requires
investments in unsalvageable products. The payback period and the
significance of the payback are intrinsic to the justification.

External Factors TIPS:

The decision to adopt technology is heavily influenced by environmental

factors. These are the events occurring in the industry, market, country and
the world in general, within which the organization interacts.
Human Factors TIPS:

Ultimate users of new technology must do something different from what

they have done in the past. They must change their behaviour patterns. A
consequence of this is that it cannot be expected that the recipients will
respond to new technology quickly. They must not only assimilate facts
relevant to the technology, but also change behavioral patterns that would
lead them to use the technology. Also, it is human nature to resist ideas,
especially those originating from outside of the organization, and this can
lead to myopia or tunnel vision. A clear implication is that technology
transfer requires time, patience and opportunities to experiment (become
familiar with) a new technology.

Corporate Factors TIPS:

The decision to adopt technology is also heavily influenced by organizational

factors. Organizations are more likely to be willing and able to adopt
technologies that offer clear advantages, do not drastically interfere with
existing practices, and are easier to understand. Adopters look unfavourably
on innovations that are difficult to evaluate or which benefits are difficult to
see or describe.

Technology Factors TIPS:

The decision to adopt technology is influenced by the technology itself. This

is a fundamental truth. All other factors being equal, if the technology fails to
live up to the expectations of the eventual users, then its implementation will
not be successful.

USERS OR BENEFICIARIES OF TECHNOLOGY

TRANSFER
• technology transfer agents who are responsible for the search,
adaptation or translation, packaging and dissemination, training and
ensurement that a new technology is properly implemented, accepted
and used to its full potential by a target user;
• individuals responsible for technology transfer functions;
• individuals charged with the responsibility of making decisions as to
whether a technology is considered for implementation within the
organization;
• individuals charged with budgeting responsibilities which encompass
evaluating the cost of new technology;
• individuals charged with strategic and business planning
responsibilities within the organization;
 • individuals who are being trained to perform any of the above noted
functions; inventors, vendors, licensors and purchasers of technology.

TECHNOLOGY TRANSFER AGREEMENTS IN INDIA

Exponential Growth of Technology in India has played a significant role

in all round development and growth of economy in our country . Technology
can either be developed through own research and development or it can be
purchased through indigenous or imported sources. India has opted for a
judicious mix of indigenous and imported technology. Purchase of technology
is commonly called “Technology transfer” and it is generally covered by a
technology transfer agreement.

‘Technology transfer’ means the use of knowledge and when we talk about
transfer of the technology, we really mean the transfer of knowledge by way
of an agreement between the states or companies. ‘Transfer’ does not mean
the movement or delivery; transfer can only happen if technology is used.
So, it is application of technology and considered as process by which
technology developed for one purpose is used either in different applications
or by a new user.
Technology generally would comprise the following elements:

• Process Know how

• Design Know how
• Engineering know how
• Manufacturing know how
• Application Know how
• Management know how

POLICY FOR FOREIGN TECHNOLOGY AGREEMENTS

RBI accords automatic approval to all industries for foreign technology
collaboration agreements subject to-

• The lump sum payments not exceeding US $ 2 million.

• Royalty payable being limited to 5 per cent for domestic sales and 8
percent for export, subjected to a total payment of 8 per cent on sales
over 10 year period.

Payment of royalty up to 2 per cent for export and 1 per cent for domestic
sales is allowed under automatic route on use of trademark and brand name
of the foreign collaborator without technology transfer. In case of technology
transfer, payment of royalty subsumes the payment of royalty for use of
trademark and brand name of the foreign collaborators.
Payment of royalty up to 8 per cent for export and 5 percent on domestic
sales by wholly owned subsidiaries (WOS) to offshore parent companies is
allowed under the automatic route without any restriction on the duration of
royalty payments
All other proposals for foreign technology agreements not meeting the
parameters for automatic approval are considered on merit by the Project
Approval Board (PAB).This
is chaired by the secretary, department of Industrial Policy and promotion,
Ministry of Commerce and Industry.

PROCEDURE FOR APPROVALS-

TECHNOLOGY TRANSFERS BY SIA

All others proposals of foreign technology agreement, not meeting the any or
all of the parameters for automatic approval, are considered for approval, on
merits, by the Government.
Applications in respect of such proposals should be made submitted in form
FC/IL (SIA) to the secretariat for Industrial Assistance, Department of
Industrial Policy Promotion, Ministry of Industry, Udhyog Bhawan, New Delhi.
No Fees is payable. Approvals are normally available within 4 weeks of filing
the application.

SCOPE FOR FOREIGN COLLABORATION

Government of India issues from time to time lists of Industries “where
foreign investment may be permitted”. The list so issued is illustrative only.
No doubt, a broad technology base has been created in the country, yet a
need to update the production technology may arise due to constant
technological advancements in developed countries .Government of India
(foreign investment Promotion Board) may consider import of technology.

INDIA STRESSES TECHNOLOGY TRANSFER AS THE

CORE OF FDI FLOWS -- MULTILATERAL RULES
SHOULD NOT CURTAIL DOMESTIC POLICY OPTIONS
The issue of technology transfer should be at the core of the development
debate in the context of Foreign Direct Investment (FDI) flows, India has said
in a paper on "Foreign Direct Investment and Technology Transfer" which
was presented at the meeting of the WTO Working Group on Trade and
Investment held in Geneva on 13 & 14 June, 2001 and was welcomed by
several members as a useful substantive contribution to the WTO Working
Group study process in this area. Highlighting the importance of the issue of
technology transfer, the paper points out that development on a self-
sustaining basis has as its essential pre-condition development of
technological capabilities. Transformation of developing countries from a
stage of low technological development to this stage would not be possible
except through transfer of technology. However, documented evidence
suggest that market forces do not ensure technology transfer to, and
absorption by, developing countries. The Paper, therefore, concludes that
multilateral rules aimed at curtailing the rights and ability of developing
countries to influence the entry and establishment of foreign investment are
not desirable.

While the last decade witnessed a veritable explosion in cross border FDI
flows, the lion’s share of such flows was accounted for by Mergers and
Acquisitions (M & As) as compared to the green field route. The major reason
why countries, especially developing countries, seek FDI is the expectation of
getting the much needed state-of- the-art technology. M & As do not always
augment the stock of productive physical capital in the host country. At the
same time, while Greenfield investment, by virtue of new entry, increases
competition, M & As most often lead to increases in economic concentration
by reducing the number of active players in the market. The effects of M &
As, either directly or through linkages and spill-overs, also depend on
whether the investment is natural-resource-seeking, market-seeking,
efficiency–seeking or created asset seeking. The motive of MNCs behind M &
A investment would have an important bearing on the type and quality of the
technology transferred. The paper, therefore, urges that it is important for
developing countries to not only ensure ‘whether’ technology is being
transferred, but also the ‘nature’ of such transfer.

The Indian paper in the WTO highlights the fact that the growth rates
recorded by FDI flows in the past few years have been more impressive than
those by technology transfer payments, which tends to indicate that the
recent spurt in FDI flows may not have been accompanied by technology
transfer. More particularly as the share developing countries in FDI flows has
started moving up, their share in technology transfers has come down.

The Indian paper refers to the distinction drawn by economists between the
‘know how’ and 'know-why’ of technology transfer and certain findings that
technology transfer within MNCs are very efficient for transferring know-how,
but less so for transferring know-why. Evidence indicated in the literature,
especially with reference to the experience of Korea, shows that M&A type of
FDI accompanying MNCs has transferred a high level of ‘operating and
organisational’ technology, which is very different from a high level of
‘production technology’. Referring to the experience of South East Asian
countries the paper states that low technological capability might co-exist
with the capability to successfully use new technologies. The simple act of
high technology production in any country does not ensure that efficient
learning has occurred, and the latter depends on a host of factors other than
technology transfer per se. Quoting the World Investment Report, the paper
underlines the fact that developing countries attract only marginal shares of
foreign affiliate research, and much of what they get relates to production,
adaptation and technical support (which is in the form of know-how) rather
than relating to innovation (know-why).

In the run up to the WTO Ministerial Conference at Doha scheduled in

November, 2001, a group of WTO Members are pushing for multilateral rules
on investment in WTO. India has been taking the position that while its own
FDI policies are very open, any move for multilateral rules could curtail
domestic policy options for host countries that would not be in the interests
of developing countries.