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Technology Management

Discuss anything to do with property law - buying, selling property

Technology Management

Postby Flemming » Sun Mar 19, 2017 11:44 pm

1.   Technology has become an integral part of any business unit. Keeping this statement in mind discuss the role of technology in designing the business strategies of a firm. Illustrate your answer with the help of an example.

2.   Briefly discuss various routes of technology transfer. Take an organization of your choice, which has adopted a specific route of technology transfer for its product. Discuss the merits and demerits of adopting the specific route by the organization for its product.

3.   What are the major benefits that an organization can have from effective absorption of imported technology? Give example in support of your answer.

4.   Explain the concept of ‘linkages’? Also explain why they are essential for an organization having Technology Management Group?

5.   Explain in brief the various sources of procuring technology information. Discuss the advantages of any two of the information sources.  
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Joined: Mon Feb 24, 2014 6:46 am

Technology Management

Postby Hod » Tue Mar 21, 2017 4:48 am





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2. Briefly discuss various routes of technology transfer. Take an organization of your choice, which has adopted a specific route of technology transfer for its product Discuss the merits and demerits of adopting the specific route by the organization for its product.


Exponential Growth of Technology in developing  nations has played a significant role in all round development and growth of economy in  the  country . Technology can either be developed through own research and development or it can be purchased through indigenous or imported sources. Most  countries   have  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

Different Routes of Technology Transfer Technology transfer appears in various forms¢wlicensing, the setting up of spin-off companies, joint ventures, or cooperation with public bodies. To license the technology to a user under contract is the most straightforward method. In return for the right to use the technology, the contracting party would pay to the  seller  an up-front fee, or a royalty based on turnover or profit, or equity in the company, or a combination of these. In cases where ready licensing to existing companies is not viable, the University has found it beneficial to either incubate these projects in-house, launch spin-off companies on its own, or encourage the launch of start-ups by project staff. Technology Inflow Routes

Over the period, some of the important commonly accessed routes for technology inflow through offsets to the recipient countries are following: Co-development and Co-production

Co-development and co-production is seen as a very effective mechanism in state of the art technology induction and absorption. In joint development programs, the access to technology that individually the partnering companies / countries could not have developed is realized at substantially less cost and time. The joint development also ensures that the part of production work along with the jobs it creates is ensured to the Indian partner also.

By this process, the companies / countries will become partners at specific contribution levels. There are financial benefits connected with the contribution, the primary benefit being the access to advanced technology and an advanced product. Further, it provides the Indian vendors with the necessary skill sets through their contribution in the joint program.

Joint Intellectual Property(IP) rights and shared international market space should be part of the negotiated contract thereby providing international exposure and a fair share of the resultant revenues to the Indian firms.

Sub- contracting / Contract Manufacturing

Sub-contracting / contract manufacturing occurs when a foreign vendor procures defence-related components, subsystems or products for export from industries in countries where the vendor has to meet offset obligations.

In the short timeframe sub-contracting / contract manufacturing is an effective mechanism in bringing the technology. This could, however, get limited to fabrication, assembly and related services. The sub-contracting can either be through ‘Build to Print” or “Build to Spec.”

Build to Print: The foreign vendor provides the complete documentation package to the(Indian) defence industry. The documentation package could include manufacturing drawings, Quality requirements, Test methods, Acceptance / Rejection criteria, etc. The Indian industry executes the task based on user-supplied data, being able to source / manufacture the parts, assemble and test the sub-assemblies / product before they are delivered. The design issues, if any, is an essential responsibility of the supplier while Indian industry could share the responsibility for design verification, especially while implementing modifications to the original documents.

Build to Spec: The foreign supplier provides the detailed Technical Specification, Quality requirements, etc. to the(Indian) vendor who undertakes the design, development, manufacture and supply of the product. This method may also go through the phases of development of prototypes, user trials and evaluation, etc. as applicable to the product or sub-assembly. During contract negotiation stage the IP related issues are to be resolved so as to avoid legal problems later.

Joint Ventures

The technology inflows can be affected through establishment of Joint Ventures(JVs). However, the investment level remains a critical factor affecting the success of a Joint Venture. In a Joint Venture with foreign equity participation restricted to 26 per cent, the OEMs, since they guard their IP, may inhibit / hesitate the collaborating partners to bring in cutting-edge technology. There are instances where the JVs have become non-functional due to technology obsolescence, with the foreign partner limiting his investments and continue up gradation to his technology. Licensed Production

The transfer of technology(ToT) to a local defence industry capable of absorbing the technology, if implemented in true sprit, where both the supplier and the recipient are competent organizations, the local industry will be able to further develop the technology and this result in leapfrog on the existing technology lag. However, it has been experienced / seen that the absorption of technology and later its enhancements are often critical issues in its implementation.

From the seller’s viewpoint, he would be throwing away his competitive advantage if he transfers all of the technology related to the product being sold. Further, from seller’s perspective, he would be giving away know how to a partner who may later become his competitor. The seller therefore, may estimate the opportunity cost excessively causing avoidable increase in ToT costs. Also, precise verification of technology cost is difficult due to non-availability of sufficient details.

Invariably, the depth of technology being transferred becomes selective at the hands of seller. The proprietary items included by the seller in the TOT contract results in buyer being dependent on the seller. The buyer is unable to leverage the ToT. There are always gaps between the needs / expectations of the buyer and the offer from the seller.

While these aspects are primarily applicable to hardware related programs, the issues become further complicated where there is substantial software content also. Generally, the executable codes of software are transferred to the buyer who will be able to copy the same for implementation in another module. The ‘know why’ is not normally part of the transfer without which the buyer can not carry out any enhancement /modification of the product for its uninterrupted usage or even marginal up-gradations to overcome obsolescence related issues during its service life.

Maintenance ToT and Training

Long-term customer support activities have become mandatory. The training of local industrial partners and user agencies in maintenance of the system through applicable level of technology transfer ensures effective and committed maintenance support. The establishment of Maintenance Repair and Overhaul(MRO) Facility on partnership basis is an option to achieve this objective. By this the local defence industry acquires the technology and offers maintenance support to the user agency on a long-term basis. Establishment of training facilities like flight simulators and user-training centers by the foreign vendor in partnership with local defence industry will adequately meet this requirement. It will also be necessary to stock and maintain adequate quantity of spare parts for meeting D-level maintenance requirements.


The organisation I am  referring to

The  organization, I am  familiar  with  is  a -a  large  manufacturer/ marketer of  safety products

-the products  are  used  as  [personal  protection safety] [ industrial  safety]

-the products  are  distributed through  the distributors as well as  sold directly

-the  products  are  sold  to various  industries like  mining/fireservices/defence/

as  well  as  to  various  manufacturing  companies.

-the  company employs  about  235  people.

-the  company  has  the following  functional   departments




*finance/ administration

*human resource

*customer  service


*warehousing/  transportation






Contract Manufacturing

Contract manufacturing occurs when a foreign vendor procures defence-related components, subsystems or products for export from industries in countries where the vendor has to meet offset obligations.

In the short timeframe ,contract manufacturing is an effective mechanism in bringing the technology. This could, however, get limited to fabrication, assembly and related services. The sub-contracting  was  “Build to Spec.”

Build to Spec: The foreign supplier provides the detailed Technical Specification, Quality requirements, etc. to the(Indian) vendor who undertakes the design, development, manufacture and supply of the product. This method may also go through the phases of development of prototypes, user trials and evaluation, etc. as applicable to the product or sub-assembly. THE  BENEFITS   WERE

-local  control over  design  changes.

-local  manufacturing means  control  over  production.

-local  training  of the  workers/ staff.

-local  service  training.

-meet   the  customer requirements.

-tailor  made   distribution  to  the  customers.

-rational   stock/  inventory   build  up.

-reduction  in   transportation   cost.

-much  easier  to  conduct  user  trail.

-more   sales  / profit.


THE  DEMERITS   ARE -the  IPR  was  still  with the  german  supplier.

-any  development  in  the  technology   was  still with the  german  supplier.


1. Technology has become an integral part of any business unit. Keeping this statement in mind discuss the role of technology in designing the business   strategies  of a firm. Illustrate your answer with the help of an example.



A Business Plan is a document that describes in detail how your business is set up. Business plans cover your business structure, your products and services, your market research and marketing strategy, and your complete budget and financial projections for up to five years. Both startups and existing businesses require business plans. Developing these documents requires a lot of research and number-crunching.

You need a business plan for two primary reasons. First, spending the time to do this work clarifies your thinking, provides you with information previously not considered, and gives you a workable strategy to follow for the period covered by the plan. Your business plan is your blueprint to success -- it outlines the steps to move from business idea to business success. And if your research reveals that your idea isn't destined for success, then better to know it now then a year from now when you have lost thousands of dollars. You can spend your time planning another idea that could have a better future.

Secondly, if you are hoping to raise funds through a business loan, a venture capitalist, an angel or an incubator, don't even consider approaching these moneylenders unless you have a thoroughly researched business plan in your hand. Experts estimate that it takes approximately six weeks to develop a business plan, so whipping one up the day before your appointment with the banker won't work. what the main points of the bplan ? HOW  TO  WRITE  A   BUSINESS   PLAN

1.BUSINESS MISSION –what is your mission for your business venture?


?what are your products/service [describe]

?how will you deliver it [with staff or on your own]

?what will be the PRICE  structure

?what will be your fixed overheads [ electricity/ water/ etc]

?what will be your variable overheads [ stationery etc

?what will be the quality of your product / service

?will there be unique offers, which no one else offers

3.BUSINESS  CONTEXT WHAT is happening in your industry

??is it growing or is there demand or is it stagnant? ?how fast it is growing? ?what kind  of products / services are being offered? ?what prices are being charged ?what is the quality of the service ?what is the capacity I is it in excess of the demand. etc

4.BUSINESS ENVIRONMENT ?who are the potential competitors ?what is the degree of competition ?what is the basis of competition?~price/ quality /facilities etc ?how easy is it to enter the competition ?what are the barriers for entry ?how do they market their product  / service ?detail please etc etc


?WHO are your potential customers

?what is the purchasing behavior of the customers(good service /quality/speedy etc]

?what factors affect the buying  behavior of the customers

?what are the preferences of the target market

?is there a seasonal trend [season / lean periods/ high demand period etc]

?what isthe demographic trends [gender/ age/ profession/ etc]

?what products/ services are in demand in the market

etc etc


-What  regulations  affect  this   business  --creditation /location/ qualifications etc

7.BUSINESS –SALES ?what opportunities do you see for your business

??please define quantitatively and qualitatively ?what are your targets ?what is your sales objectives[ forecast for 3 years at least] –sales forecast by units/dollars [for three years] ?what factors are likely to affect your sales objectives ?sales minus cost of sales= gross contribution[ rough estimate]


?in your terms, how do you plan to achieve these objectives

?what strategy would you adopt

9.BUSINESS MARKETING –WHAT will be your marketing objectives ?what will be your marketing strategy ?what will be your promotion plans ?what media are available etc etc


?will you have a sales team or you plan to handle yourself ?will you telemarketing ?will you use online marketing ?will you use direct marketing ?what customer service support you plan to offer etc etc

11.BUSINESS OPERATION –how do you plan to run it ?what will your operational policies etc

12.BUSINESS ORGANIZATION –what is the planned organization ??over three years

-what will be the structure ?how many/ type of staff will be employed over 3 years ?salary guidelines ?what functions /who will perform it etc etc


?funds available

?funds required in total

?funds needed


The  answers  to  the  above  questions   will  help  you  to  develop

The  business   PLAN.


As  you  develop  the  plan,  and  deal  with


-business  context

-business  environment

-business  market






Part 1: The Necessity of Technology Transfer

1. Strategic Management & Business Strategy

Recently, The rapid development of information & communication technology based on the internet

is presenting to corporations the urgent problem of adaptation and survival in the fast-changing

competitive environment. The so-called strategic management is a series of decision making

activities and procedures in establishing and executing effective strategies for the pursuit of

corporate missions and achievement of aims. The decision making process where the opportunities

and threats of the environment faced by or expected to be faced by one’s company are combined

with the internal capabilities of the company. It is a method of achieving corporate aims in an

uncertain competitive environment whereby schemes and plans are established to enable

competition in a more favorable situation than other companies. The favorable situation means

securing attractive business areas and possessing continuous competitive advantage, and the

fundamental factors and required conditions .

Fundamental factors Required conditions

Recognizing and setting favorable


Opportunities & threats from the external environment

Optimizing business area setting Concentration of internal competencies for the

realization of competitive advantage

Maintenance of dynamics Systematization & action process, capability to enable

dynamic change required

The strategies in business area are established in consideration of these fundamental factors and

required conditions. Based on these business strategies, specific technology acquisition strategies

are determined. That means, corporate competitiveness can be secured through effective

connection between business strategy and technology acquisition strategy. Especially, If we

examine the technology acquisition process in terms of corporate management strategy, there are 5

stages in the decision making process  including technology management

strategy establishment, derivation of required technology based on the established technology

management strategy, analysis of internal technology development capability in relation to derived

technology issues, technology acquisition strategy establishment based on the established

technology management strategy, internal development & technology outsourcing in accordance

with the established technology acquisition strategy etc.

Corporate technology acquisition procedure

Technology Management Strategy

Derivation of Technology Needs

Evaluation of Current Technology

Acquisition Strategy Establishment

In-house Development

Outsourcing / Technology Transfer

Outsourcing / Necessity of Technology Transfer

Early Product Release / Market Preoccupation

R&D Costs Reduction

Risk of Uncertainty Minimization

Gap Confirmation

Decision on the Required Technology Order of Priority

Confirmation of Potential Route for Technology Acquisition

Especially, for the successful performance of technology transfer & outsourcing in this series of

technology acquisition procedures, precisely understanding the business sections established in the

technology management strategy and the order of priority in technology said to be the most

significant factor.


2. Technology Outsourcing

Outsourcing is the supply of various management resources required in corporate activity from not

internal but external sources through contracting. In the case where technology related

management resources are externally supplied, it can be considered as technology outsourcing.

There is no opposition to the view that technology outsourcing will rapidly become widespread

following the recent changes in the management environment. It is because there is no other way

but to adapt and find countermeasures to the changing management environment for survival, and

achieve essential corporate aims whether it is a corporation or not. As the atmosphere in relation to

the necessity of technology outsourcing increases, the demand for industries in technology rises,

and this calls upon the supply of technology. That is, when there is demand business opportunities

are created, and this kind of business opportunity, in most cases, attracts and absorbs market

participants. The general subjects of technology outsourcing are as follows.

Technology outsourcing subjects

-2 Complete corporations & technology required for

commercialization(production, sales etc.)

-3 Sectional & key factor technology which can supplement

in-house technology

-4 Technology services required in the technology development

& commercialization process

-5 Research facilities & equipment

-6 Research personnel

-7 Other technology related management support

The technology transfer business formed in accordance with the demand increases in this kind of

technology outsourcing can make it simple and efficient along with market activation. If the required

technology can be supplied easily and competitively, this can reduce the need and scale of in-house

R&D, and will be useful for companies in securing competitiveness through the preoccupation of

opportunities in the market. Furthermore, in terms of costs, there is a strong point in that cost

savings can be gained with the reduction in R&D organization maintenance costs.  

summarizes the management environment factors that promote this kind of technology


The necessity of technology outsourcing

Necessity Details

Technology integration & combination Many key technologies are needed in line with the technology integration &

combination trends, however all these cannot be developed in-house

Reduction in technology life Increased risk in technology development due to reduced life cycle of

technology products, quick appearance of similar or substitute technology

Rapidly changing market demands There is a need to speed up new product release through externally

supplied technology in order to meet market demands and preoccupy


Reduction in technology acquisition costs There is a need to reduce R&D costs by outsourcing in order to be competitive

Diversification of risk In order to diversify the risk in relation to the uncertainty of modern times,

there is a need for risk avoidance through the diversification of R&D


3. Technology Transfer

Modern times can be commonly called a society of knowledge and intellectual value. Instead of the

natural objects or objects visible to the eye, the unseen knowledge of the brain and the application

of knowledge are the main focus of modern society.

Attention is given to other applications which affect awareness of economic value, this is called

intellectual property. Intellectual property which meets the predetermined requirements and

develops into a legal right is called intellectual property right. Intellectual property in current society

is important especially in solving economic problems but there are standard limitations in their

creation and production. Therefore, in most cases it can be considered that demand is larger then

supply. Its economic value is dramatically increasing compared to the past and in proportion to this,

an era will come where intellectual properties will turn into money.

As described above, technology in business require strategic management dimensions for active

transaction for it to be traded like commodities. Also, to encourage an environment of increasing

performance for technology transfer, business opportunities like consulting and advice from various

relevant experts, technology introduction and recommendations etc. must created. Technology

transfer is more difficult and specialized than transfer of general goods, and there are greater

possibilities to increase professional services and business opportunities. As a result, corporations,

organizations, and individuals commercializing the supply of technology transfer information,

introduction and agency, and various specialized services, consulting etc. between the technology

provider and the demanding party, are appearing. Services that can be provided by specialized

businesses in relation to technology transfer consulting etc. are very diverse, but when these

services are properly provided and activated the bottleneck phenomenon in technology distribution

disappears, and the era where technology is transferred like goods can come about more rapidly. In

relation to technology transfer fixed price is received for professional advice and consultation and

the business areas provided can be divided into three stages management strategy, technical

analysis, negotiation and contracts.  The arrangement of these major tasks. Major consultation tasks for each stage

Necessity Details

Strategy establishment -8 Establishment & consultation on technology management /

commercialization strategies

-9 Solutions for major technology issues

-10 Establishment of technology implementation strategy

Consultation on technology  analysis

-11 Sorting and recommendation technology requiring implementation

-12 Technological & economic analysis of technology implementation subjects

-13 Determination & analysis of rights in relation to technology implementation


-14 Proposals of major technology transfer condition settings & negotiation

function domain

Consultation on negotiations & contracts

-15 Establishment & consultation on negotiation strategy of major conditions

-16 Examination & construction of draft contracts

-17 Agency of related certifications & permit lodgments

-18 Technical fee calculation and remittance(payment) support tasks


Part 2: The form and strategy of Technology Transfer

1. Types and Characteristics of Technologies subject to Technology transfer

Assets that have economic value can largely be divided into tangible assets, which have specific

form, and intangible assets, which do not have specific form. Here, the technology to be transferred

can be included in the intangible category. The concept and the category of Intangible technology is

very wide and flexible. In a narrow sense it means manufacturing site, manufacturing method,

confidential skill, and know how, and in the wider sense it means the entire intellectual property

which has economic value. With the aim of creating smooth technology transfer and distribution the

technology transfer promotion law which was established , defines technology

as patents registered in accordance with relevant laws such as the patent law, utility models,

designs, semiconductor allocation design, capital assets based on technology, software and

intellectual assets technology as well as design, whereby these are deemed to be the objects of

technology transfer.

Traditionally, commodities subject to commercial transfer were focused on tangible assets,

intangible assets like as technology subject to commercial transfer comparatively became more

frequent only recently. It is true that the innate limitations in the transfer of technology and other

intangible assets have prevented the development of technology transfer. However, it is also true

that because of these characteristics, business operation using unique methods and strategies is

possible rather than transfer of tangible assets. As a result, it can be said that planning and

executing business strategies based on the understanding of the various characteristics of

intellectual property is a short cut to business success. One of the most noticeable features of

intellectual property is that, initial research and development requires much time and money, but

during usage and distribution only small expenses are necessary.

If additional expenses required for duplication & reproduction for use and distribution are

insignificant, all revenues generated here can be considered as profits. Because of this, the

technology and intellectual property could have high economic value. These characteristics of

intellectual property are Characteristics of intellectual property

-Not visible and does not have physical form

- Recovery value is relatively high because of the limitations in creation

and production due to the high level intellectual origin

-Evaluation and valuation is very difficult, and transfer price and

conditions are decided through negotiation rather than by the market.

-Exclusive with announced conditions, exclusive legal right is possible

- Time and money consumption during initial creation, development, and

production is high, but costs involved in duplication & reproduction for

use and distribution is low enough to be negligible


of intellectual


- Life cycle is relatively short, value fluctuation is severe


2. Methods of Technology Transfer

(1) Method of technology sale or transfer

Technology transfer & acquisition is the transfer of rights in accordance with a contract, and of these

a transfer for a consideration is the called the sale of technology. By the sale of the relevant

technology, comprehensive control and management is handed over to the buyer who pays the

price(sales price). Besides the difficulty in working out the value and the process of patent

registration, this is similar to product sales. Not just the already registered patents but also the sale

of patents in application can become the subject of a transfer(simply by recording patent

application number). The owner demands a high and fixed price for full transfer of rights to the

buyer but the buyer will not easily agree unless the buyer is convinced of the economic value &

potentiality of utilization of the patent. As a result, , it is usual that sales only

occur in special circumstances.

Motives for the transfer & sale of intellectual property(patents etc)

- in the case where the owner of the patent does not have the capability to

execute and there are problems in licensing to a 3rd party

- in the case where there is a problem in developing a basic patent into a

commercial product

- in the case where it is disposed for early recovery of the R&D costs

- in the case where it is difficult to produce the finished goods, based on partial


- sales by specialized technology development and sales companies in the

ordinary course of their business

- in the case where an individual inventor raises research & invention funds

In the case where profit is sought with a transfer or sales of patent rather than the technology

licensing, the greatest problem is the determination of sales price. Because it is different from a

running royalty based on business results like in the licensing method, a one-off fixed sales price is

difficult to determine prior to the implementation of business. Methods of determining the sales price

range from the relatively simple cost approach(total cost + appropriate profit) to very intricate

methods where opportunity cost and even the expected profits are included, but in reality it is

decided by the negotiations within the scope of the prices proposed by the parties involved in the


In the transfer & sale of patents, the sales price is important but there is also a need to closely

regulate the payment(receipt) procedures & methods. The sale & transfer of patents require the

contract agreement between the two parties, but is only effective when registered with the

Intellectual Property Office. However, cases of non-cooperation with regards to registration after the

receipt of the sales price, or obstacles in payment receipts after registration is complete cannot be

excluded. Finally, in the case of a patent sale based on contract where there are two or more joint

owners, the sale or transfer is not possible without the agreement of the other owners, and this is

the problem with joint ownership of patents. So, with the sale of patents etc. following the payment

method Payment method of the sales price for patents etc

- Method where the sales price and the patent rights registration are exchanged

- Method of payment and receipt simultaneously with the notification of the completion

of transfer registration

- Method of payments in the course of a specified time frame after transfer registration,

but to be more secure, a payment guarantee from a 3rd party such as banks etc.

(2) Technology License

License is also called a method of permit to execute, and is a system that the holder of the

technology rights gives permission to another party in relation to the execution rights of the relevant

technology based on a contract. It means, the parties that give and take the execution & usage

rights enter into a licensing contract, and on the premise of the specified conditions including

payment of technical fees for a specified period etc. the permission for the execution & usage rights

is given. After the period is over, execution and usage becomes invalid. If we compare it to products,

it is similar to leasing or hiring.

Sales and licensing methods are mostly used in technology transfer, but there are the following

differences between the two parties and these are directly connected to the selection issue. In the

case of sales where the entire right including the possession right etc. is comprehensively

transferred, and the supplier generally requests a very high transfer price, but the purchaser of the

technology hesitates due to the high fixed price on technology which success is uncertain. However,

in the case of licensing, the concept is to permit the execution and usage of the technology, so the

price for its use(usage fee or royalty) becomes much lower. In the viewpoint of the technology

provider, only the execution right is given with the possession right intact, so execution permits can

be given in other areas or to other parties, thus can be satisfied with only the low technology usage

fee, and it is favorable for the parties seeking the license as they can make payment of the usage

fee in accordance with the business results.

Domestically, technology transfer is mainly conducted in the sales method because the licensing

method of technology transfer is not properly recognized. However, because of the limitation of the

sales method as previously explained, there is a need for the spread of recognition as well as the

development & propagation of transfer techniques.


(3) A forms of technology transfer where it is conducted together with capital, management,

know-how etc

Even if technology is purchased or licensed, the success in the commercialization of the relevant

technology is not guaranteed, especially if the in-house utilization capability is insufficient. This is

more the case with highly advanced technology. To solve this kind of problem, there is a need for a

method where technology transfer are made together with other management resources including

capital, management know-how, equipment, core components etc. In this case, technical fees can

be separately dealt with or transfer can be made including a part or the entire technical fee in

relation to equipments, components etc. It worth paying attention to the recent trends in foreign

countries where there is a rapid conversion from the previous technology only implementation to

this kind of collective implementation.


(4) Purchase, M&A of corporations possessing technological capabilities

Although technology and related management resources can be taken as transfer subjects

individually or collectively, on a wider sense, selling or purchasing companies with outstanding

technology can be seen as a form of technology transfer. Even in reality, there are many cases of

attempts to purchase or M&A companies possessing the required technology to achieve the aim of

securing technology competitiveness rather than choosing the licensing or individual strategies to

obtain technology. Likewise is the position of the company or the person with the ownership of the

technology. Rather than trying to deal just with the technology alone, a strategy which combines the

technology, related equipment, technical personnel, and other assets all into one is sometimes

chosen. This kind of technology transfer through sales & purchase of companies that possess

technology is chosen in the case where quick measures are required if the speed of technology

development(change) is very fast or the life cycle of related technology & products is very short.

This method of technology transfer is expected to greatly increase centered on small venture

enterprises as management with technology considerations comes into full scale and with the

acceleration of technology innovation. However, in this case, there is a limitation in that technology

evaluation and value analysis of companies subject to sales & purchase are not easy.


(5) Technology transfer methods involving the sale of technology data such as plans,

microfilms etc

In the case where aims can be achieved by just acquiring a part of the particular technology

information, this can be used as a method to find simple technological solutions. This is often used

in small scale projects.


(6) Technology transfer method using technical personnel as the medium

Like with industrial asset rights, if there is no requirement of active involvement by the technology

provider and except when technology has been documented and objectified, technical personnel

can directly be involved in the technology transfer. Transfer technology through invitation and

deployment of technical personnel, resolution of technological issues through the employment of

technical personnel etc. fall into this category. There are many cases where this method is used as

a supplement together with the previously explained methods.

Of the numerous methods above, by which method to conduct the technology transfer depends on

the type & characteristics of the relevant technology to be transferred as well as the position and

strategy of each party. In specific cases, it is important to conduct this efficiently and using an

appropriate method by comparatively analyzing the strengths and weaknesses of these technology

transfer methods.


Part 3: Technology Transfer Procedures & Methods

1. Transfer Procedure

The fundamental technology transfer procedure can be classified into 6 stages , and the characteristics of each stage can be summarized .

Specific procedures of technology transfer post management

negotiation & contracting



technology valuation/selection

discovery of technology

Major tasks in technology transfer procedure(1)

Stage Major Tasks

Discovery of technology -19 Discovery of competitive technology

-20 Transfer request or arranging & securing technology that is possible to transfer

but is not possessed in-house

Technology valuation & demand selection

-21 qualitative/quantitative value valuation of the secured technology

-22 Analyze possibility of clash with a 3rd party owned technology

-23 Establish transfer strategy in accordance with the technology type & form

-24 Preliminary matching of technology demand/supply

-25 Pre-analysis of whether the transferred technology can secure competitiveness

if seeking to transfer overseas

Negotiation & contracting

-26 Establish strategy and consult on major conditions of the negotiation

-27 Examine and draw-up drafty contract

-28 Agency of related certification & permit lodgments

-29 Calculate technical fee and remittance(payment) support tasks

Packaging -30 Draw-up technology information document for the smooth execution of

technology marketing

-31 If possible include prototype

Technology transfer(sale)

marketing activities

-32 Prepare marketing materials for technology transfer

-33 Conduct activities such as the participation in Techno mart

-34 Analyze methods to expect maximum effect with minimum cost

-35 Discovery and contact of potential demanding parties

-36 Research & analysis of demanding party(party seeking to implement)

-37 Prior-proposal of technology transfer conditions to the parties seeking to receive

the technology transfer

Major tasks in technology transfer procedure Stage Major Tasks

Technology transfer

negotiations &


-38 Propose of transfer conditions(Team Sheet)

-39 Establish negotiation strategy

-40 Negotiate on technology transfer conditions & details

-41 Draw-up & analyze draft contract

-42 Different for each depending on the type & form of technology

Post management -43 Monitor compliance to the conditions of the contract

-44 Actual inspection & report


2. Licensing method in technology transfer

The concept & necessity in relation to the licensing method of technology transfer and its

differences to sales has already been explained. Here, the types, strengths & weaknesses etc. of

licensing , is concisely summarized to assist in planning, preparing, and

analyzing the licensing method of technology transfer.

Types, strengths & weaknesses of the technology licensing method(1)

Type Strengths & Weaknesses

Exclusive license -45 The licensor provides the right to the licensee to exclusively use

within the contract area & period

-46 It is a standard practice to include strict conditions such as

minimum sales amount, minimum technical fee, restrictions in

economic product dealings etc. as issuance of an identical

license to a 3rd party is not possible

-47 Decide whether to accept by comparing additional conditions

such as the actual benefit of the exclusive license, minimum

technical fee etc.(this is in the position of the technology

implementing party, and the supplier of the technology should

view this in reverse)

Non-exclusive license

-48 This is a method where the licensor reserves the right to

provide the license not only to a particular licensee but also to

other 3rd parties

-49 It is a method generally favored by the licensor

-50 It is a method where the licensor & licensee can choose as a

one-off without other burdens

-51 In the position of the licensee(technology implementing party)

should arrange so that there are no separate burdens such as

minimum technical fee etc.

Sublicense -52 The technology implementing party who has been given the

license can offer a sublicense to a 3rd party under the

sublicense provision

-53 It can be used efficiently when a single technology is diversely

utilized in terms of usage, purpose, and area

-54 Must have a basis on the contract

Types, strengths & weaknesses of the technology licensing method(2)

Type Strengths & Weaknesses

Cross licensing -55 This method can be chosen when parties have a need to

mutually exchange and use particular technology which the

other party possesses

-56 There are free of charge licenses and if one party profits due to

economic differences, the other party is compensated for the


-57 Technical fee reduction and competitor elimination effects can

be gained through the formation of cooperative alliances

-58 Need the basic capability to recognize mutual necessities

Package licensing -59 A method where many technology licenses are added to a

single contract, and a method where technology, equipment,

components, capital etc. are comprehensively provided

-60 Favored by the technology provider

-61 There is the benefit of gaining the required management

resources all at once, but the cost burden is large

-62 Requires attention because there is a high probability of

violating the fair trading related laws


3. Cross licensing strategy

Cross licensing is the mutual exchange of specific licenses between relevant parties. For example,

A company provides a license to B company for the use of its technology and simultaneously

receives a license for the use of B company’s technology, and this becomes a mutual execution

(cross execution). The fundamental background for seeking cross licenses is for economic reasons

whereby time and costs can be significantly reduced by borrowing each other’s technology rather

than developing and possessing it as technology becomes more integrated, combined, and


In planning, analyzing, and executing cross license contracts, how the technology to be exchanged

(usage right) will be assessed and appraised is the core issue. In using exchanged technology, the

economic value of the technology of both parties is the core issue. If the economic value of the

technology of both parties is identical, licenses can be exchanged without cost, but if the technology

value of any one party is greater than the other, one party must compensate the other for the

difference. When analyzing and appraising the economic value of the technology to be mutually

exchanged, the factors summarized  must be taken into consideration.

In the case of cross licensing of patents, there are no problems if the patents of both parties are in

existence for the same period of time, but if the effective period of the patent of any one party

expires first or is invalidated during that period, there is a need to specify a condition beforehand to

compensate the party which incurs loss in economic value due to the termination of the patent. The

future need and opportunities for cross licensing are expected to increase in accordance with

technology becoming more integrated, elevated, and advanced and as competition becomes

intense, and the rise in demand by foreign businesses for technology and patents that Korean

cooperation owned.

Matters to be attended to cross license contracts

- number of patents(scope)

- number of products using the patent(business quantity)

- effective period for each patent

- value of the invention(the proportion of the entire invention in the

section including the patent)

- whether it is from a new inventor, or an improved invention(the

strength and independence of the patent)

- the validity level of the patent(possibility of invalidity)


Planning and preparation: Gearing up for procurement

Establishing need

Market consultation

Assembling the teams and partnerships needed to manage the process

Project definition

Selection of procurement procedure

Determination of contract award criteria

Notification and pre?qualification(if applied)

Initial advertisement and contract notice, inviting expressions of interest

Assessment of expressions of interest

Definition of shortlist


Issue of tender invitations

Arranging for dealing with clarification requests from bidders

Receipt of tenders


Formal tender opening and checks for compliance with requirements

Tender evaluation of quality and price

Arranging tender presentations(if applied)

Negotiating with selected tenderers(if applied)

Selection of the most economically advantageous tender

Contract Award

Notification to successful tenderer

Notification to unsuccessful tenderers


Appeal process

Signing of contract

Contract Management

Monitoring that delivery meets specification

Evaluation(distinguish from tender evaluation above, this is the process evaluation, self


Draw lessons that might improve future procurement projects


3 What are the major benefits that an organization can have from effective absorption of imported technology? Give example in support of your answer.

Time, capital cost and uncertainty

The "productionizing" of a standardized imported technology by experienced personnel may require a considerably shorter time than the commercialization of an indigenously developed technology from scratch. The former is also subject to less uncertainty and risk of failure because it has been proved and standardized. With imported technology it is possible to phase the project cost over a period of time. Normally, such projects begin with the assembly of imported kits, and the manufacturing process is indigenized gradually as markets are developed with the products assembled from the kits.

In contrast, an entrepreneur using indigenous technology has no such option. He must provide for the entire project cost at one go and develop markets from scratch. Once he enters the project, he cannot quit if the market does not pick up, while the one still selling the product assembled from imported kits can. The choice of local technology in preference to foreign alternatives, therefore, may prove to be time-consuming, more capital-requiring and subject to greater risk. Public policy should devise some instrument to offset these disadvantages to make utilization of local technology more attractive.

Finance - technology nexus

The ability of technology and equipment suppliers to provide financing(suppliers' credits) plays an important role in technology selection, particularly for large capital-requiring projects. Technology suppliers from industrialized countries are usually willing to provide or arrange financing on soft terms from their respective country's export-import banks or other institutions. Their bids are often backed up by their home government's bilateral aid agreements. The local technology or equipment suppliers with no matching ability to provide credits are, therefore, easily outmatched, even with comparable prices and capability. In the past few years, local engineering industry has, indeed, lost numerous orders to foreign firms in fertilizers, power, and steel projects because of lack of finance. It is, therefore, imperative that a fund be created to provide financing for projects using local technology and equipment to mitigate the problems of local suppliers in providing credits.

Market power of foreign technology

The prospect of using an internationally reputed brand- or trade-name gives a tremendous edge to foreign technology over the local ones, particularly in consumer goods. Though the guidelines for foreign collaboration stipulate that no foreign brand-names will be allowed to be used in domestic sales? they are very much in use. In fact, a number of foreign collaborations are just "cover-ups" for the procurement of the right to use foreign brand-names, and are being signed even in low-priority industries such as cigarettes. In order to make sure that only genuine technology is transferred to the country and the local technology does not face unfair competition from the market power of foreign technology, foreign brand-names have to be eliminated altogether. The present Trade Marks Act is seemingly vague on what constitutes a foreign brand and hence needs amending.

A useful way to define this would be to consider as foreign any brand-name that was in use abroad before its registration in India and any owned by foreign organizations, whether or not any royalty is paid for its use.


-imported technology based  products  could  satisfy

the  unmet  demand  in  the  market,  which  means  

*more  market  share.

*more  sales.

*more  profit



-there  is  a  perceived  values  for  products based  on imported  technology,  which  means

*more  market  share.

*more  sales.

*more  profit



-there  is  definetly  improved  quality  in  the products

made  from  imported  technology,  which  means

*more  market  share.

*more  sales.

*more  profit



-the imported  technology  helps in  building  product cost  effeciency,

which  mean  cheaper  products,

*more  market  share.

*more  sales.

*more  profit



-the  imported  technolgy  based  products gives  the  organization

the  competitive   advantage,  which  means

*more  market  share.

*more  sales.

*more  profit



-the  imported  technology  based  products  gives  the resellers

the  motivation   to sell  more  of  the  products

*more  market  share.

*more  sales.

*more  profit



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