MEM 8 6 may14 regarding managing technology in org

MEM

1. DEFINITIONS AND CLASSIFICATIONS Technology transfer is a process that permits the flow of technology from a source to a receiver. The source in this case is the owner or holder of the knowledge, while the recipient is the beneficiary of such knowledge. The source could be an individual, a company of a country. Jain and Triandis (1990) define technology transfer as a “ process by which science and technology are transferred from one individual or group to another that incorporates this new knowledge into its way of doing things. ” The National Aeronautics and Space Administration (1995) defines it as “ the process of providing the technology developed for one organizational purpose to other organizations for other potentially useful purpose. ” Technology transfer is a process that permits the flow of technology from a source to a receiver. The source in this case is the owner or holder of the knowledge, while the recipient is the beneficiary of such knowledge. The source could be an individual, a company of a country. Jain and Triandis (1990) define technology transfer as a “ process by which science and technology are transferred from one individual or group to another that incorporates this new knowledge into its way of doing things. ” The National Aeronautics and Space Administration (1995) defines it as “ the process of providing the technology developed for one organizational purpose to other organizations for other potentially useful purpose. ” Technology transfer is a process that permits the flow of technology from a source to a receiver. The source in this case is the owner or holder of the knowledge, while the recipient is the beneficiary of such knowledge. The source could be an individual, a company of a country. Jain and Triandis (1990) define technology transfer as a “process by which science and technology are transferred from one individual or group to another that incorporates this new knowledge into its way of doing things.” The National Aeronautics and Space Administration (1995) defines it as “ the process of providing the technology developed for one organizational purpose to other organizations for other potentially useful purpose.”

2. Technology transfer can be divided into the following categories : International technology transfer , in which the transfer is across national boundaries. An example of this type is the technology transfer from industrialized countries to developing countries. Regional technology transfer , in which technology is transferred from one region of the country to another, for example, from Florida to Alaska. Cross-industry or cross-sector technology transfer , in which technology is transferred from one industrial sector to another, An example is the transfer of technology from the space program to commercial applications. Interfirm technology transfer , in which technology is transferred form one firm to another. An example is the transfer of computer-aided design (CAD) expertise and computer-aided manufacturing (CAM) machines from a machine tool manufacturing firm to a furniture producing firm.

3. Intrafirm technology transfer , in which technology is transferred within a firm from one location to another. An example is the transfer of technology from a company’s California division to its Miami location. Intrafirm transfers can also be made from one department to another within the same facility. For instance, if one department uses sophisticated computer technology and another relies on manual work--- an imbalance that could hinder the company’s operation---technology transfer can balance the system by provided full use of computer technology throughout the firm.

4. CHANNELS OF TECHNOLOGY FLOW Technology is intangible; it flows easily across boundaries of countries, industries departments, or individuals, provided that the channels of flow are established. There are three types of channels that allow the flow of technology:- General channels : The technology transfer is done unintentionally and may proceed without the continued involvement of the source. Information is made available in the public domain with limited or no restrictions on its use. This information is harnessed by users and applied to their purposes. Channels of this type of transfer include education, training, publication, conferences, study missions, and exchange of visits

5. Reverse-engineering channels : Other channels in which the transfer occurs with no active contribution from the source include reverse engineering and emulation. Here a host, or a traditional receiver of a technology, is capable of breaking the code of a technology and developing the capability to duplicate it in some fashion. This is feasible provided that the host has the knowledge to do this and there is no legal violation of intellectual or property rights. For example, a product that is put on the market by company A can be purchased by company B, reverse-engineered, and introduced to the market as a competitor to company A’s product, as illustrated by the case in the accompanying box. This is a powerful method for technology transfer. Its limitation is its inability to transfer the developer’s tacit knowledge. Such knowledge is usually gained during the product development process.

6. Planned channels : The technology transfer is done intentionally, according to a planned process and with the consent of the technology owner. There are several types of agreements that are used to affect planned transfers. They permit access to, and use of technological know-how: Licensing: The receiver purchases the right to utilize someone else’s technology. This may entail an outright purchase or a payment of a payment of an initial lump-sum amount plus a percentage of sales. Franchise : This is a form of licensing: however, the source usually provides some type of continual support to the receiver, for example, by supplying materials, marketing support, or training. This channel is commonly used in food chains and service organizations, such as McDonald’s Burger King, and Pizza Hut.

7. c. Joint venture : Two or more entities combine their interests in a business enterprise in which they can share knowledge and resources to develop a technology, produce a product, or use their respective know-how to complement one another. They also share in the rewards of the venture. International joint ventures are frequently used by recipients to acquire technology and by sources of technology to gain access to local markets and distribution skills. d. Turnkey project : A country buys a complete project from an outside source and the project is designed, implemented, and delivered ready to operate, Special provisions for training or continued operational support may be included in the agreement between the parties. Engaging in a turnkey project is equivalent to buying or selling a machine, but on the scale of an entire plant. Most innovative firms would not sell a plant or license technologies that they intend to exploit themselves.

8. e. Foreign direct investment (FDI): A corporation, usually a multinational , decides to produce its products or invest some of its resources overseas. This permits the transfer of technology to another country, but the technology remains within the boundaries of the firm ( i.e , is still controlled by the firm). This type of investment has advantages for the both the investor and the lost country. The investor gains access to a labor force, natural resources, technology, or markets. The host country receiver’s technological know-how, employment opportunities for its people, training for the workforce, and investment capital that adds to the development of its infrastructure. The host country will also get tax advantages, since most employees will be contributing to the local economy.

9. The multinational may also gain a tax advantage by locating facilities offshore in a country or territory that gives a tax break. Many U.S. pharmaceutical companies have located facilities in Puerto Rico because of the tax advantage they can get with this arrangement. Some developing countries provide long-term tax relief for foreign companies located on their soil.

10. f. Technical consortium and joint R&D project : Here, two or more entities collaborate in a large venture because the resources of one are inadequate to affect the direction of technological change. Typically this type of venture takes place between two countries or two large conglomerates. For example, a consortium was formed between France and England to develop a supersonic plane (the con- corde ). Both nations needed to combine their technical and financial resources to develop expensive technology and, in the meantime, to complete with their rivals in the United States. Several similar ventures and consortia exist under the auspices of the European Union (EU). European governments have established a number of projects to help national companies compete with American and Japanese firms. Programs the EU supports include,” Race,” a project to advance communication technology; “ Espirit ,” for information technology; and “ Jessi ’” to bolster semiconductor research. Project “Eureka” is an independent research program involving 24 nations (U.S. Office of Technology Policy, 1997).

11. All these cooperative projects aim to advance research, develop technology, and transfer knowledge to participating member states. The Japanese government, through its Ministry of International Trade and Industry (MITI), fosters alliances between industry and government in projects of national interest and scope. Examples include the VLSI project undertaken to make the Japanese semiconductor industry competitive and the Fifth Generation project, which focuses on advancing artificial intelligence and parallel processing ( Chency and Grimes, 1991).

12. Many lessons can be learned from the success of Singapore’s effort for economic development. Factors contributing to its success can be extracted from a speech by Prime Lee Quan Yu during the African Leadership Meeting held in Singapore in November 1993. The prime minister enumerated the essential basis for development. Some of his points are paraphrased below: Establish / maintain a clean, effective government that is well respected by the people. (Officials must have a philosophy based on understanding and appreciating the development process.) Eliminate corruption and reward officials adequately to protect them from corruption. Avoid internal squabbles for national unity THE SINGAPORE MODEL

13. Build on areas of strength ( e.g , agriculture or availability of labor force) Encourage savings to increase investment while avoiding external debt. Encourage family projects and local industry to create economic opportunities and keep people from emigrating to large cities. Do not waste funds on huge projects. Encourage investment by both small investors and multinationals Promote education Develop effective strategies for technology transfer

14. Singapore built its strategy around becoming a regional business services hub in the Southeast Asia region. It serves as a regional marketing and technical support center, a regional financial and business center, and a regional headquarters for multinational companies (MNCs). It also selected niche industries for specialization, including electronics and computer, ship repair and maintenance petroleum refining, and aerospace maintenance and repair (Wong 1995).

15. TECHNOLOGY TRANSFER IN TAIWAN Taiwan’s approach to technological development and technology transfer is another success story. In Taiwan, industrial technology R&D is enhanced by a nonprofit corporation known as the Industrial Technology Research Institute (ITRI). This institute conducts technical R&D on targeted projects directed and funded by contracts from the ministry of Economic Affairs, a central government agency. The research results are then applied to assist or guide the private sectors either through technology transfer or technology expansion (Chen, 1990). Taiwan has located ITRI next to two of its top universities in science and technology the National Tsinghua University and National Chiao -Tung University. A targeted project for technology transfer can draw upon the scientific and technological expertise of the faculty of these two fine institutions. The participation of the private sector through the investment and business planning of industrial facilities completes the team of players needed to spur industrial development.

16. A firm attempting to transfer technology from one site to another or from one division to another must approach the transfer process in a systematic and deliberate manner. For the transfer to be successful, infrastructure including facilities, equipment, and personnel, must exist or be develop. In addition, a transfer team may be needed to orchestrate the transfer. Arthur Squires calls these teams the “Maestros of Technology “ (Bowser, 1987). In fact, complicated transfer projects may require two teams one at the source and one at the receiving end of the technology. Each team is led by a “champion” and consists of a member of specialists, depending on the complexity of the technology and the size of the project. All communications regarding the transfer [marketing, quality assurance (QA), production, etc] are channeled through the transfer-team leaders. Beruvides and Khalil (1990) developed an intrafirm technology transfer model based on experience gained from an actual project involving the relocation of an existing production facility. The model is shown in Figure11-5. INFORMATION TECHNOLOGY TRANSFER

17. An appropriate amount of inventory of the product is built up as a reserve against delays or inefficiencies during the transfer. At the optimum time, parallel production facilities are set up, with half the equipment at the old site and the other half relocated to the new site. This ensures continued production throughout the transfer project, an important criterion desired by the company. Once the new sire is qualified and the product specifications are achieved at the site, the remaining production equipment is relocated to the new site. Full production begins at the new site, quality is monitored and the transfer team is disbanded . Several useful guidelines for setting up a transfer team are recommended by Beruvides and Khalil (1990): The smaller the team, the better People work best in an atmosphere tof trust and healthy competition Building team work and motivating the team members are critical The chain of command and communication channels should be well understood by all. Success is largely dependent on the quality of the people selected to perform the tasks

18. Technology continuously flows across boundaries of countries, regions, companies, and departments within organizations and among individuals. The transfer of technology from one entity to another is effected through channels of technology flow. These may be general channels of contact among individuals and institutions or organized programs designed for the orderly and systematic transfer of technology. Efficient and effective technology transfer requires the formulation of a strategy and the creation of mechanisms of transfer. These mechanisms can be Technology Transfer Centers, information exchange networks, or organized projects that utilize special teams to effect the transfer. CONCLUDING REMARKS

19. On the macro level of nations, newly industrialized countries such as Taiwan and Singapore have followed a special niche strategy to become competitive in world markets. They have concentrated on acquiring technologies in which they can gain a comparative advantage over other world competitors. Taiwan relied heavily on its nationals trained overseas, to transfer the technology. Acquiring knowledge through people can be a very effective means of transferring technology. The transfer of technology is not, and should not be, a one-time activity. It is continuous process with follow-up activities. For the technology to Take root within the receiving entity of the transfer, it must be nurtured. This requires a program of training reinforcement, and R&D to keep the technology alive and make it grow in its new grounds. Unsupported technology can fade into obsolescence quickly.

20. In the United States, a significant number of technologies are created for space and defense-related applications . Efforts are under way to transfer these technologies to the commercial sector, where additional wealth can be created. Technology Transfer Centers are capable of linking government sites and centers of knowledge such as universities and research institutions of knowledge with industry and public sector enterprises