assignment tech transfer
TRANSCRIPT
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Critical Analysis of Role ofTechnology Transfer in India
Submitted to:
Dr. S. K. Chaddha
Submitted by:Aastha Arora
Adeep Kaur Sandhu
Aman Chhabra
MBA Gen(Sec A)
2012
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INDEX
Topic Page
Introduction 3
Snapshots of Facts and Figures related to Technology Transfer in India 4
The 6 Ps of Technology Transfer 4
The Seven Cs for the Transfer of Technology 5
Various Sources of Technology Transfer 7
Methods of Technology Transfer 8
Technology Transfer Process 8
Factors Affecting Technology Transfer Process 10
New Trends in Technology Transfer 11
News Item: Tech transfer reluctance fuelling piracy, says Philip Kotler 12
India and Technology Transfer 13
Comparison of Technology Transfer Parameters of India 14
Indian Case Studies on Technology Transfer 17
References 23
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Introduction
Technology Transfer also called the Transfer of Technology (TOT) and Technology
Commercialization, is the process of skill transferring, knowledge, technologies, methods of
manufacturing, samples of manufacturing and facilities among governments or universities and
other institutions to ensure that scientific and technological developments are accessible to a
wider range of users who can then further develop and exploit the technology into new products,
processes, applications, materials or services. It is closely related to (and may arguably be
considered a subset of) knowledge transfer.
Some also consider technology transfer as a process of moving promising research topics into
a level of maturity ready for bulk manufacturing or production.
Technology brokers are people who discover how to bridge the disparate worlds and apply
scientific concepts or processes to new situations or circumstances.A related term, used almost
synonymously, is "technology valorization". While conceptually the practice has been utilized
for many years (in ancient times, Archimedes was notable for applying science to practical
problems), the present-day volume of research, combined with high-profile failures at Xerox and
elsewhere, has led to a focus on the process itself.
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Snapshots of Facts and Figures related to Technology Transfer in
India
India currently spends 0.8% of GDP on R&D (research and development) and S&Tpolicy (Science and technology).
In India there are only 156 researchers per million of population. Of the 0.8% expenditure in India, 80% is by public sector and only 20% by private sector The 11th Plan allocations for scientific departments including departments of science and
technology and atomic energy, has been increased three folds to Rs 75,304 crore during
the 11th Plan (2007-2012) as compared to Rs 25,301.35 crore of 10th Plan Period.
The 6 Ps of Technology Transfer
6P
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The Seven Cs for the Transfer of Technology
Context:
Technology transfer does not take place in a vacuum. The performance of a given technology is
dependent on a wide range of factors, making identification of an appropriate technology
somewhat problematic. For example, a technology that is assessed to be appropriate in a given
locale, culture, economic setting or stage in its life cycle may not be in another. Its performance
may be influenced markedly by the availability of supporting infrastructure and by access to the
expertise necessary for its management, maintenance and monitoring. Moreover, a technology
that qualifies as being appropriate at one point of time, may not do so at another the
performance criteria against which it is assessed may change as a consequence of new
information or changing values or attitudes; a technical breakthrough may give rise to more
desirable alternatives. It is therefore vital that recipients and users of a technology are able to
choose an option that meets their specific needs and capacities. It is, of course, highly desirable
that the technology is also found to be economically viable and socially acceptable, and hence
sustainable.
Challenges:
There are many barriers to successful technology transfer. All along the transfer path, from the
supply side of technology transfer (the innovators and developers) to the demand side (the
recipients and users), impediments occur at every node and, due to restrictions on the movement
of information and materials, for every linkage in the technology transfer chain. Examples of
challenges include shortfalls in technology creation and innovation, underperformance in
technology sourcing, insufficient and unverified information. Small and medium enterprises are
disproportionately impacted by these challenges.
Choice:
A key aim of barrier removal, that is of facilitating technology transfer, is ensuring that
technology recipients and users are able to make informed choices by being able to identify and
procure the most appropriate technology for a given application in a given locale. Several
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requirements must be met, including: needs well defined, documented and understood; several
technology alternatives, all of which are well and reliably characterized in terms of
environmental and economic performance and potential social impact; capability to make the
chosen technology fully operational, so that it fulfils its potential, and meets the identified needs,
without detrimental side effects.
Certainty:
A lack of certainty, and the consequential high levels of risk, both real and perceived, are
recognized as major impediments to the successful technology transfer. Removing barriers to
technology transfer often translates into increased certainty, and decreased risks, for the key
stakeholders such as the developers, suppliers, financiers, insurers, recipients and regulators.
One example is ensuring access to sufficient, verified information.
Macroeconomic conditions that favour technology transfer include those which will deliver low
inflation, stable and realistic exchange and interest rates, pricing that reflects the true costs of
material, energy, labour and other inputs, deregulation, free movement of capital, operation of
competitive markets, open trade policies and transparent foreign investment policies.
Communication:
The technology transfer chain is often long, in terms of both distance and time. Effective
communication is thus another essential ingredient in the recipe for successful technology
transfer. Efficient and effective two-way communication and cooperation between key
stakeholders will do much to remove barriers. Information management systems, knowledge
management tools and formal and informal networks can all make important contributions.
Effective communication is a requisite to harmonizing the contributions to the processes of
technology transfer being made by diverse players.
Capacity:
Enhancing the transfer of technologies that support sustainable development is largely about
creating favourable circumstances for technology transfer ensuring all stakeholders have the
ability to fulfil their roles and meet their responsibilities, expeditiously. Generally speaking,
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government is the principal player in creating an enabling environment for technology transfer,
but financial and insurance institutions and international organizations can also be influential.
Issues as lack of access to appropriate sources of capital, high or uncertain inflation or interest
rates, subsidised prices for material and energy inputs, high import duties, uncertain stability of
tax and tariff policies; investment risk, loss of rights to intellectual property should be addressed.
Commitment:
Key actions that will foster technology transfer include:
Needs assessments, including identification of shortcomings in the enabling environment,with relevant organizations and agencies helping to address these
Evaluation and strengthening of policies that influence the enabling environment Greater communication and interaction between key parts of government Intra- and inter-governmental coordination, cooperation and assistance Protection of intellectual property rights and legal contracts Political support for programmes and institutions that foster technology transfer Delineation of the roles of the private and public sectors in both developed and
developing countries
Economic incentives targeting industries that have the potential to make critical andmajor contributions to technology transfer
Ensuring that technology transfer initiatives are compatible with national sustainabledevelopment agendas.
Various Sources of Technology Transfer
1. Projects- Foreign direct investment, turnkey construction and co-production2. Trade-sale of equipment, tools and end products
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3. Contractors and Development- Licensing of patents, trademarks, management andequipment, maintenance.
4. Research and Development:-Location of R&D operations in foreign countries, joint R&D projects.
5. Personnel Exchanges: Development assistance under bilateral and multilateral aidprogrammes, international exchange corps, employment of foreign technicians.
6. Publications: professional and scientific literature, technical publications.7. Conferences: Professional and scientific meetings, academic preferences, technical
societies and trade associations.
8. Teaching and Training: Foreign study in regular undergraduate and graduateprogrammes, training programmes of United Nations and other international agencies,
internal training programmes of business firms.
9. Others: Transfers through international tender invitations, acquisition of companies,Government to government agreements.
Methods of Technology Transfer
By improving and updating technologies By adopting and absorbing newer technologies By innovating and improving the technology imported By better using technology in production By producing new kinds of products Through improved systems and improved organisations and the effective use of
technology.
Technology Transfer Process
Steps in Technology Transfer
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Technology transfer spans the gamut of technological knowledge - from the sharing of a precise
component of information to in-depth corporate know-how. The terminology defined below
describes the progression from the transfer of minimal information to that of core details.
Show-how: The recipient at this stage is a sub-contractor with limited technical assistance,
allowing only the most meagre transfer of technology.
Know-how:The transfer of technology accelerates, as there is full technical aid with scientific
assistance, adaptation, use of materials, and transmission of results and formulas. At the same
time, the attendant risks also increase.
Know-why:In this step, existing research is shared, with the supplier of technology transmitting
concepts and explaining formulas.
Know-everything: Here the core technology (or secrets referred to as the tour de main) is
transmitted, intensifying the risks, with a boomerang effect perhaps already in place.
Phases of Technology TransferTechnology transfer progresses through the following five phases:
Incubation:In this initial phase of technology transfer, companies evaluate their technological
capabilities and life cycles, human abilities, and know-how. This phase also includes the major
issue of competitor evaluation, which is addressed by competitive intelligence and technology
watch to understand the buyers intents, thereby avoiding the boomerang effect.
Anticipation: During this phase, companies focus on anticipating the price of technology, mode
of transfer, choice of potential partners and clients, and typical agreements such as protecting
intellectual property.
Confrontation: This phase is a period of aggressive negotiation, risk management, and cross-
cultural concerns.
Implementation:This includes financing, project management, the adaptation of technologies to
specific local requirements, and the transmission of know-how, training, and technical aid.
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Follow-up: This final phase involves the collection of royalties, a review of the partners
technological expertise, and the technological and external diffusion, and assessing the feedback
on the buyers technological improvements.
The overall process of technology management can be divided into the following eight phases
(Khamba, Singh, and Sushil, 2001):
Forecasting and Assessment
Planning and Strategy
Acquisition and Development
Transfer
Adoption and Adaptation
Diffusion and Substitution
Utilization
Phasing-out.
Factors Affecting Technology Transfer Process
Infrastructure in technical education, research, training. Quality of Human Resource Incentives and Facilities for Research and Development. Access to Foreign Technology State Participation in Scientific and Technological Development.
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New Trends in Technology Transfer
During the 1970s, there was a major international debate about technology transfer. The
paradigm used in that debate involved technology licensing from a multinational firm to a host-
nation subsidiary or licensee manufacturing for the local market. The concerns were that the
costs of the technology (many of which were hidden through transfer prices or management fees)
were too high, that host nation use of the technology was often hindered by restrictive clauses,
and that the licensees often failed to receive the best technology. The response was to form
national technology transfer offices to review inbound technology transfers, to prohibit a number
of clauses typically contained in these licenses, and to attempt to cap the price of the technology.
This was done at the national level and proposed, albeit never successfully, at the global level.
Today, the world is quite different, because of two key changes. First, a number of developing
nations have become much more technologically sophisticated. The comparison from 1976 say
to 2006 is incredible in terms of the numbers of trained scientists and technologists, the level of
science-based industry, and the magnitude of national scientific research and financing
programs.
This change is, of course, greater for the middle income and largest nations such as Brazil,
China, and India and much weaker for the poorest nations, such as many of those of Africa.
Nevertheless, there is an enormous change in the skills available to a large portion of the
developing world.
Second, the world is now globalized in the sense that free trade has spread and that, in many
industries, economies of scale now favor production facilities that serve more than one nation.
The result has been increasing specialization and trade, both in components and in finished
products that may have origins in a number of nations. Many feel that these changes are going to
lead to an era of expanded growth for the more successful of these nations, as exemplified by the
Goldman Sachs identification of the BRICs (Brazil, Russia, India, and China), which are likely
to become a larger force in the global economy. Moreover, production chains are now often
spread over a number of nations. Computer chips may be designed in one nation, manufactured
in a second, diced and tested in a third, assembled into computers in a fourth, with software
written in a fifth.
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Automobile component suppliers are becoming independent of automobile firms and doing a
greater share of the overall R & D going into a car. A multinational, in general, now invests in a
developing nation in order to obtain a basis for export to a global market or production process.
The international regulatory structure is also different. Today, because of free trade rules, an
indigenous firm in the developing world may be less able to begin through a protected market, as
did the US industrial firms of the early 19th century. And because of intellectual property (IP)
protections in WTO Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS), the firm may be less able to begin by imitating existing technologies, as did Japanese
firms in the middle of the 20th century. Moreover, technological flow has become strongly
political, not only because of the global move towards IP but also because of technological
protectionism.
Whether from basic research to applied technology or from one firm to another, the transfer of
technology is fundamentally a matter of the flow of human knowledge from one human being to
another. This can be through education, the scientific literature, or direct human contact.
News Item: Tech transfer reluctance fuelling piracy, says Philip
Kotler
Published: Wednesday, Mar 21, 2012, 8:03 IST
ByNeeraj Thakur| Place: DHAKA | Agency: DNA
There is a need to find ways for technology transfer from developed nations to the least
developed ones, said marketing guru Philip Kotler.
No doubt, technology transfer is a big issue and companies do not like to share their technology.
We have to find out ways for that. May be thats why the piracy market flourishes in the world,
said Kotler at the first World Marketing Summit (WMS) held here.
Kotler, a S C Johnson & Son distinguished professor of international marketing at Kellogg
School of Management, Northwestern University, Illinois, US, is the founder and convenor of
the WMS.
http://www.dnaindia.com/authors/neeraj-thakurhttp://www.dnaindia.com/authors/neeraj-thakurhttp://www.dnaindia.com/authors/neeraj-thakurhttp://www.dnaindia.com/authors/neeraj-thakur -
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India and Technology Transfer
Exponential Growth of Technology in India has played a significant role in all round
development and growth of economy in our country. 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
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 meanthe transfer of knowledge by way of an agreement between the states or companies and at last
countries. 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 transfer must be recognised as a broad and complex process if it is to contribute to
sustained and equitable development. The end result for the recipient must be the ability to use,
replicate, improve and, possibly, re-sell the technology. Transfer of technology is more than just
the moving of high-tech equipment from the developed to the developing world, or within the
developing world. Moreover, it encompasses far than equipment and other so-called hard
technologies, for it also includes total systems and their component parts, including know-how,
goods and services, equipment, and organizational and managerial procedures. Thus technology
transfer is the suite of processes encompassing all dimensions of the origins, flows and uptake of
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know-how, experience and equipment amongst, across and within countries, stakeholder,
organizations and institutions.
Comparison of Technology Transfer Parameters of India
1. R&D spending as a percentage of the GDP
2. Percentage of private sector spending on R&D
0.8
1.23
2.9 3
0
0.5
1
1.5
2
2.5
3
3.5
India China US Japan
R&D spending (% GDP)
R&D spending (% GDP)
20
70
82
0
10
20
30
40
50
60
70
80
90
India China Japan
% of private sector spending on R&D
% of private sector
spending on R&D
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3. No of persons involved in R&D (per million population)
4. Innovation Performance comparison with EU
156
4700
7000
800
0
1000
2000
3000
4000
5000
6000
7000
8000
No.of persons involved in R&D(per
million of population)
No.of persons involved in
R&D(per million of
population)
4940
-55 -53
-80
-60
-40
-20
0
20
40
60
US Japan China India
Innovation Performance comparison
as compared to EU
Innovation Performance
comparison as compared
to EU
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5. Patent applications filed in 2007
6. Indias 15 year trend (1995-2010) of R&D expenditure (% of GDP)
15262
245161
0
50000
100000
150000
200000
250000
300000
India China
Patent Applications filed in 2007
Patent Applications filed
in 2007
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7. Previous year trends of patents filing by residents of India
Indian Case Studies on Technology Transfer
Three different case studies of suppliers belonging to three important clusters are illustrated here:
Identification and Description of Clusters
Cluster 1: JV organizations having world class technology, OEMs to vehicle manufacturers
(Tier-1 status) have capabilities for manufacturing subassemblies.
Cluster 2: Technology acquisition mostly through license arrangements and in certain cases
through joint ventures. Did not acquire technology under any compulsion from customer
company; largely benefited from active technology transfer through enhancement of technical
capabilities. These organizations have high capability for developing and adapting
manufacturing processes but not for designing components, and they have very low involvement
in product design for their customer company.
Cluster 3:Technology acquisition through licence arrangements, but acquired technology only to
satisfy their customer company to fulfil the condition for entering into licence arrangement for
supplying components. These organizations did not benefit much from technology acquisition, as
the partnership was mostly passive in nature.
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Cluster 4: FDI-type organizations having world class technology and manufacturing proprietary
items. Have high capabilities for product design and involve them in designing
components/products after getting broad guidelines from the vehicle manufacturers.
Case Study I
This case study is of a leading automotive supplier Subros Limited, which was established in the
year 1985 in technical and financial collaboration with Denso Corporation, Japan, to
manufacture automotive air conditioning systems. Subros first customer was Maruti Udyog
Limited (MUL), a leading Indian vehicle manufacturer, which continues to be Subros largest
customer even today. Subros has grown physically in terms of turnover, number of plants, and
units produced. The company has grown and matured also in terms of technology absorption,
widening of the customer base, and creation of world-class systems.
Ever since its operation in India from 1986, Subros has been continuously upgrading its
technology with assistance from Denso, Japan, to meet all performance requirements of the
Indian automotive car industry.
Denso provided Subros with all the know-how on designs, production processes, quality
procedures, inspection methods, and Denso standards. However, Subros efforts in getting state-
of-the-art technology from Denso met with resistance. For instance, Denso has not transferred
the technology for the air-conditioners fitted in the Baleno car being manufactured by MUL.
Perhaps Densos intentions of setting up its own plant in India are behind its reluctance to part
with this technology. Although the production volumes of Subros are sufficiently high to meet
the ever-increasing requirements of its principal customer MUL, yet these are lower than the
global standards and the volumes of its technology provider, Denso Corporation, Japan.
However, the primary importance Subros gives to R&D and engineering have refined its skills
for developing and manufacturing its own products for its customers.
For specific product development for customers like MUL, the collaborators facilities are being
extensively used. Subros is closely involved with its customers in the product design for
developing their products and gives complete solutions to its customers as per their requirements.
The customer company provides the broad framework and layout of the space where the parts
are to be fitted, but the remaining design parameters are chosen by Subros in consultation with
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its collaborators. Subros gets a fair level of help from the customer companys R&D department
also for this activity, but the major design work is undertaken by Subros and its collaborators.
Case Study II
This case study deals with JCBL Ltd., which was incorporated as a company in the year 1989 for
the manufacture of high-quality Japanese technology coaches for Swaraj Mazdas buses,
ambulances, and load carriers. Swaraj Mazda, an LCV manufacturing Indo-Japanese JV
company and JCBLs major customer, has entrusted the manufacture of 95% of their buses to
JCBL. By diversifying into the manufacture of several high quality luxury coaches, motor
homes, trailers, special utility vehicles, and cargo boxes, JCBL has today evolved into asuccessful automobile company. Its automotive parts are widely considered at par with the finest
in the industry and have the advantages of superior quality and efficient performance.
JCBLs Technical Tie-Ups
JCBL entered into TAAs(Technology License Arrangements) with the following companies in
order to upgrade its technology by diversification andlaunching of new products:
1. Auto Parts Manufacturers (APM) of Malaysia2. King Long United Automotive Industry Co. Ltd of China3. Tantri Pvt. Ltd. of Sri Lanka
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In May 2001, JCBL entered into a TAA with Auto Parts Manufacturers (APM), Malaysia, for the
design and manufacture of luxury coach seats. Regarded as one of the worlds best manufactuers
of luxury coach seats,
APM has recently been honoured with Fords world excellence award for quality and delivery.
Another technology partner of JCBL, Tantri of Sri Lanka has experience in the manufacture of a
wide range ofhigh quality trailers. Tantris expertise in this field has helped JCBL consolidate its
trailer manufacturing facilities. Established in 1982, Tantri Pvt. Ltd. is a pioneer in this
specialized field and commands considerable respect in the Sri Lankan automobile industry.
King Long United Automotive Industry Co. Ltd. has proved to be an able partner in the
manufacture of integral coaches. Ranked the leader among over 160 bus manufacturers of China
w.r.t. turnover and per capita output,
King Long has shared its know-how and technical expertise with JCBL. Through various
training programmes and a healthy exchange of information, JCBL has expanded its knowledge
base and grown from strength to strength.
Some of the problems JCBL is facing in this tie-up are mentioned below.
i) Since most of the drawings and operation/assembly manuals supplied by King Long are in
Chinese,,the JCBL engineers had difficulty in reading the drawings. However, employing
Chinese interpreters could solve this problem.
ii) Sometimes some of the components, which are a part of the kit supplied by King Long, are
defective. JCBL replaces these components with Indian substitutes, if these are available in
India. Otherwise, the company has to await the arrival of fresh components from China, wasting
time and resources due to delay in shipments.
iii) On a few occasions, JCBL encounters some snags during the vehicles final inspection,
which may require only minor adjustments. But if its experts are unable to rectify these
problems, the King Long experts who are immediately alerted provide the solution.
Conclusions
The following conclusions have been drawn from this study:
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People capabilities are the main driving force in the development of technologicalcapabilities, manufacturing processes, and ultimately the performance.
The important strategies to hedge risk in technology transfer are: Developing Capabilities Training Employees Developing Partnerships Enlarging Strategic Scope Choosing Appropriate Technology Valuation Model Choosing Right Mode of Technology Transfer Adaptation of Acquired Technology Vehicle manufacturers, who launched their products in the early 1980s, played a vital
role in giving an initial thrust in the upgrading of the technological capabilities of the
Indian suppliers. In fact, these vehicle manufacturers focused on developing the skills of
these suppliers indigenously, and in a few cases the suppliers were asked to engage in
joint ventures with their worldwide supplier. The manufacturers took a personal interest
in the development of the suppliers by sending their expert teams to the suppliers from
time to time, and today those suppliers are big names in the Indian automotive supplier
industry.
Most of the suppliers, who were earlier nurtured by vehicle manufacturers like MarutiUdyog, Hero Honda, and Swaraj Mazda, tried to expand their customer base in the mid-
1990s and gain access to the latest technology by entering into TAAs with the worldwide
suppliers of the customers like Ford Motors, General Motors, and Toyota.
Most of these new players entered the market independently and had the option ofsourcing the components either directly from their worldwide suppliers or through only
those local suppliers that have TAAs with their worldwide suppliers. Hence, a number of
forward-looking suppliers entered into TAAs.
Most of the Indian suppliers have adapted their production processes to suit the lowproduction volumes prevailing in India. International standards that require hi-tech
instrumentation in the process control and integration of different processes in a single
stage are not economically feasible. Also, the production processes employed under
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Indian conditions are manual in nature rather than the highly automated ones being
employed by worldwide suppliers.
The involvement of donor companies and their commitment towards transferringtechnology and the level of their subsequent help for problem solving is much higher in
the case of joint ventures as compared with TAAs. Therefore, any supplier acquiring
technology through TAAs must weigh its internal capabilities before entering into an
agreement. In fact, the success of TAAs depends upon how the recipient company
judiciously adapts the technology before implementation.
Certifications like QS 9000 and TS 16949 have also played a role in establishing thesystems and streamlining the suppliers documentation and have reduced the earlier
communication gap between suppliers and vehicle manufacturers.
Sending employees for training and upgradation of their skills is a regular feature of thesuppliers belonging to clusters 1 and 4, i.e. JVs and FDI-type suppliers, whereas its level
is much lower for suppliers belonging to cluster 2, i.e. those that have entered into TAAs
on their own initiative, and it is lowest for suppliers belonging to cluster 3, i.e. those that
entered into TAAs in order to fulfil their customers conditions.
The extent of suppliers involvement in the new product development and the vendorscapabilities to adapt and absorb the technology is very low, especially for suppliers
belonging to clusters 2 and 3. Only a few vendors belonging to cluster 3 are involved inthe product design work, and a majority of vendors with these capabilities belong to
cluster 4.
Most often, donor companies are reluctant to divulge the details of the engineeringdesigns of the product/components. What they transfer is only the process design of the
product/components along with drawings of the components/assemblies and empirical
standards for functions such as Production, Quality, and Design and Testing. All this
forms a part of the know-how for technology, but the important know-why of these
aspects is not transferred.
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References
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%20New%20Trends%20Technology%20Transfer%200207.pdf
Hoppe, H. C., & Ozdenoren, E. (2001, 8 23). Intermediation in Innovation: The Role of
Technology. Retrieved 3 22, 2012
Seres, S. (2008). Montreal, Canada.
Sushil, P. (n.d.). Strategic Risks in Planning and Implementing Technology. Retrieved 3 22, 2012
WACC. (n.d.). http://www.waccglobal.org. Retrieved 3 22, 2012, from
http://www.waccglobal.org