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Technology Transfer is the process by which technology is disseminated. It involves communication of relevant knowledge by the Transferor to the Recipient.

It is in the form of technology transfer transaction which may or may not be a legally binding contract.

Twoterms technology transfer and technology acquisition are normally used interchangeably. The verb Acquire means To come into possesion of; get as ones own To gain for oneself through ones actions or efforts Technology Acquisition is the process of acquiring a new technology, new product, process or service ; by efforts of an individual or an enterprise or any other macro entity. This process can be conducted either internally or externally to the enterprise.

Scientific Knowledge Transfer, Direct Technology Transfer, Spin-off Technology Transfer Informal Technology Transfer & Formal Technology Transfer Internal Technology Transfer & External Technology Transfer


Knowledge Transfer: through information exchange and presentation of technical papers at scientific meetings and symposia. Direct Technology: through formal arrangement between enterprise to enterprise, govt to enterprise, govt to govt. Spin off technology transfer: which was developed for one particular area and used in some other area.


technology transfer involves exchange through published material, process of training scientists in academic research institutions, acquisition of critical technical personnel. Formal technology transfer: procurement of technology through its sale, licensing or acquisition. Formal agreements are signed.

Internal Technology Transfer refer to such technology transfers / investments where control on the ownership & usage of technology resides with the transferor. It is a complex process involving following decisions: Timing : When to introduce new technology / products in the market? Location : Where to transfer new technology / products? Multi-functional teams --Which staff members should be involved in transfer process ? Communication methods & procedures What type of Communication methods & procedures be adopted to facilitate transfer ?

R & D goals are not known to Production Department. Difficulties in stopping current production to test new products / processes R&D Department does not understand needs & capability of Production Department. In general, Production Department is resistant to innovation and is bound by routine. Non-linkage of new technologies to marketing / customer needs.

Top management support and participation in the transfer process Providing supportive organizational culture Use of multi-functional teams in the transfer process Ensuring effective communication in the organization Bringing R&D closer to production. Rotation of few person between R&D and production Linking & participation of marketing elements in the transfer process.

In these transfers, control on the ownership & usage of technology usually does not remain with transferor and it passes on to the recipient, like joint venture with local control, licensing agreement etc.

Successful external technology transfer depends upon following factors: Type of the technology being transferred Complexity of the technology being transferred Transfer mechanism selected Relationships between the parties building of mutual trust Core competencies of the parties & compatibilty thereof Organizational culture of the parties & mutual understanding thereof

Co-operative & collaborative ventures / strategic alliances Licensing agreements Contracting agreements Enterprise acquisition.

Technology already developed saves time & efforts Sometimes Growth objectives or competitive goals cannot be reached through internal development Lack of risk taking ability for innovations Lack of internal resources (physical & human) for innovation Firm does not have core competencies to deal with complex technological developments. Need to keep up with competitors Need to cope up with acceleration of technological change As a part of firm strategy --- let other firms take big risks & it will purchase technology developed by them.

Associated costs usually high prices are required to be paid in the form of royalities, technical & knowhow fees etc over medium to long term period Appropriatesness of technology i.e. its suitability to core competencies and market needs is always a point of discussion and investigation Heavy reliances on foreign technology- may make transferee / recipient technologically dependent on external technology providers / transferors even for small issues Lack of mutual trust between two parties may hinder full & timely transfer

There is risk of loss of control over technology and the transferee / recipient may use technology in an arbitrary manner Transfer may render existing technology & its related products / services / processes obsolete Transferee may turn a potential competitor in future. Mismatch in core competencies of the transferor & transferee may create difficulties in transfer Different organisation cultures may create difficulties in transfer Lack of effective communication between the parties may also create difficulties in transfer

Proper & well defined technology transfer agreement should be signed Proper assessment / evaluation of appropriateness of technology Proper assessment / evaluation of compatability of core competencies of the parties Building pre-agreement relationships so as to develop mutual trust and so as to understand culture of opposite parties Seeking cross cultural training Ensuring effective communication Anticipating problems and adopting measures for facilitating transfer

Lumpsum payment or periodical instalments Royalities as a %age of sales over next few years Cross-licensing agreements Contracted supply of output Issue of equity shares in lieu of technology transferred

By Acquisition we mean :The purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets Technology Acquisition : Purchase of one corporations technology by another. Acquisition of technology and knowledge involves the purchase of external knowledge and technology


Project organization
Purchasing Process

Needs assessment: carefully review the actual situation and consider the needs for technology introduction. E.g. apple acquired snappy labs, Facebook acquired Instagram. 2. Technology and solutions available: look for the solutions available on the market. Industry is proposing various alternatives which must be considered and selected before starting the specified work.


Project definition: scope of the project has to be further studied and defined. Google acquired Bitspin (timely app for Android) 4. Technology specification: necessary to draw up a detailed technical specification which will adapt it to the identified needs and constraints.


Project organization: a Project Management Team has to be organized and established mission must be defined and objectives specified. E.g. Facebook purchased little Eye Labs. 6. Purchasing process: guidelines can be established in order to ensure that the procurement process is transparent, fair and comprehensive.



Ms 102 2/10/2014



resources Time pressure Complementary assets Protecting image Diversification Supporting internal technologies Avoid development risks

The IT giant has signed an agreement with Science Applications International Corporation (SAIC) for the acquisition of their global oil and gas information technology practice of the commercial business services business unit


global oil and gas information technology practice provides consulting, system integration and outsourcing services to global oil majors with significant domain capabilities in the areas of digital oil field, petro-technical data management and petroleum application services addressing the upstream segment.

Stronger appeal to clients in the energy industry, and separation from its Indian provider peers Wipro is already the largest offshore Tier 1 provider in the energy and utilities sector in revenue terms, and the acquisition will provide it with broader and deeper consulting, technology, and outsourcing capabilities in the upstream business, and enhanced service capabilities in areas including digital oilfields, exploration, and production data management.


help Wipro gain capabilities in areas such as petro-technical data management and petroleum application services and digital oil fields.


eyebrows were raised when Google bought barely-year-old, no-revenue startup YouTube for a staggering $1.6 billion. Now YouTube is the clear leader in online video by far and is worth many times that amount. It's probably not a huge moneymaker but it is an absolutely amazing asset in video, which is an ever increasing category.

For a long time, eBay's purchase of Skype was on everyone's list of terrible acquisitions. To be sure, it didn't work for either company. But, Microsoft has now paid $8 billion for Skype, which eBay retained a 30% in, so it's not a total disaster.


Google bought DoubleClick, Microsoft tried to keep up by buying ad company aQuantive for $6 billion. The acquisition never really worked out. The aQuantive executives left two years after the deal closed and the technology was discarded.

What factors influence acquisition decision? What are national strategies for technology acquisition? Methods of technology acquisition by a nation

Attracting TNCs / MNCs Through direct measures viz. making a positive list of industries open to FDI Through indirect measures - viz by offering incentives & subsidies Attracting TNCs / MNCs into natural resource processing & inducing greater value additions Using TNCs / MNCs to attract / encourage their overseas suppliers to invest into country Improving skills & training of local technologists by involving TNCs / MNCs

Developing industrial parks / technology parks to attract high technology investors Offering incentives to existing investors to move to more complex technologies and to increase or upgrade technological R& D base Changing competitive environment and existing incentive structure to encourage world class technology & management Improving technological access for local firms for outsourcing / technology transfer Collecting, organising & disseminating information about technology development