TECHNOLOGY TRANSFER

CONTENTS
• Definitions and Classification

• Channels of Technology Flow

• International Technology Transfer

 DEFINITIONS OF TECHNOLOGY
TRANSFER
• Tarek Khalil (2000) defines technology transfer as a process
that permits the flow of technology from a source (owner of
knowledge – individual, company or country) to a receiver
(beneficiary of knowledge – individual, company, or country).

• Jain and Triandis (1990) defines it 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.

• NASA (1995) defines it as a process of providing the

technology developed for one organizational purposes to
other organization for other potentially useful purposes.
Continue …………
• UNIDO (2002) defines it as a transaction or a
process through which technological know-how
is transferred normally between businesses or
agencies representing business.

• University at Stony Brook (2002) considers it as a

principal avenue for the movement of research
results from the university to private companies
so that products can be developed and commercialized
based on this new knowledge.
 CLASSIFICATIONS OF TECHNOLOGY
TRANSFER
• International technology transfer – across national
boundaries. Example – transfer of automotive technology
from Japan to Malaysia.

• Regional technology transfer – from one region of the

country to another. Example - from Peninsular Malaysia to
East Malaysia.

• Cross-industry or cross-sector technology transfer –

from one industrial sector to another. Example – from
space program to commercial applications or from
university labs to private companies
Continue ……..

• Inter-firm technology transfer – from one

firm to another. Example – CAD expertise and
CAM machines from machine tool manufacturing
firm to furniture-producing firm.

• Intra-firm technology transfer – within a

firm from one location to another. Example –
from a company’s Penang division to its Pasir
Gudang location.
 In short ….. Technology transfer can be divided into
TWO dimensions – vertical technology transfer
and horizontal technology transfer

Research

Product
Development

Operation Operation
Commercialization Environment Environment
1 2

Vertical Technology Transfer Horizontal Technology Transfer

 CHANNEL OF TECHNOLOGY FLOW
THREE TYPES OF CHANNELS

• General channels

 it is done unintentionally and may proceed without

the continued involvement of the source.

 information is available in the public domain with

limited or no restriction on its use.

 information is harnessed by users and applied to

their purposes.

 EXAMPLE – Education, training, publications,

conferences, study missions, exchange of visits.
 Continue ………
• Reverse-engineering channels

 transfer occurs with no active contribution from

the source.

 technology receiver breaks the code of technology

and duplicate in some fashion.

 Its limitation is its inability to transfer the source’s

tacit knowledge.
 Continue ………
• Planned channels
It is done intentionally according to planned process and with
the consent of the source.

 several types
 Licensing – receiver purchases the right to utilize the
technology – outright purchase or payment of an initial
lump-sum plus percentage of sales.
 Franchise – a form of licensing – the source
provides continual support to the receiver.
 Continue ………
 Joint venture – two or more entities combined
their interests in a business enterprise to
develop technology, or produce a product.

 Turnkey project – a country buys a complete

projects from an outside source and the
project is designed, implemented and delivered ready to
operate.

 Foreign direct investment (FDI) – MNC to

produce its products overseas. Technology transfer
remains within the boundaries of the firm. MNC can gain
access to labour force, natural resources, technology and
markets
 Continue ………

 Technical consortium and joint R&D project

– Two or more entities collaborate in a large venture.
Example – Concorde project between France and England.
INTERNATIONAL TECHNOLOGY
TRANSFER

Developing nations
Industrialized nations
Consumer of
Producer of
technology
technology
INTERNATIONAL TECHNOLOGY
TRANSFER …. continue
Production of PCs

3
2.5
2
Millions of 1990
1.5
Units 1991
1
1992
0.5
1993
0
Singapore Korea Taiwan Hong Kong
Country

Semiconductor Consumption

3
2.5
2
Billions of 1990
1.5
Dollars 1991
1
1992
0.5
1993
0
Singapore Korea Taiwan Hong Kong
Country
Technology Specialization Among
The Tigers
Hong Kong Korea
Audio Appliances Memory Chips
Telephones Video Appliances
Electric Games Aerospace

Singapore Taiwan
Software Applications Chips
Digital Computer Peripherals
Communication PCs
Biotechnology
The Singapore Model
• Establish/maintain a clean, effective government that is well
respected by the people.
• Avoid internal squabbles for national unity.
• Build on areas of strength (e.g. agriculture or available of
HR).
• Encourage savings to increase investment.
• Encourage family projects and local industry to create
economic opportunities.
• Do not waste funds on huge projects.
• Encourage investment by both small investors and
multinationals.
• Promote education.
• Develop effective strategies for technology transfer.