Entrepreneurship Ch.6

CHAPTER 6
International Technology Transfer and Multinational Enterprises innovation
Contents :
• Technology usage and adoption
• Public regulation of technology transfers
• Diffusion and Mechanisms of Technology Transfer
• Intellectual Property Right
• Appropriateness of technology
…cont.
What is technology?
Technology is science or knowledge put into practical use to solve problems or invent useful
tools.
Technology is not simply hardware or physical objects; rather, it is knowledge about the
physical world and how to manipulate it for human purposes.
The term transfer is also problematical. Since technology is essentially information, "transfer" is
essentially communication of information both within individuals and groups and between
them and the use of that information in the recipient system.
Technology transfer is the process by which existing knowledge, facilities or capabilities are
utilized and marketed to fulfill public and private needs.
…cont.
It is the process by which basic science research and fundamental discoveries
are developed into practical and commercially relevant applications and
products.
Technology transfer is the movement of new technology from its creator or

researcher to a user, especially as products or publications; also, the
movement of new technology from developed areas to less-developed areas.
Technology transfer is in large measure an exercise in the use of language to

communicate, and an appreciation of the role that language plays in leading to
individual, organizational, and social action is essential.
…cont.
Technology transfer involves more than hardware supply; it can involve the complex
processes of sharing knowledge and adapting technology to meeting local conditions.
Further, technology transfer is
1) assignment of technological intellectual property, developed and generated in one
place, to another through legal means such as technology licensing or franchising.
2) Process of converting scientific and technological advances into marketable goods
or service.
Domestic technical and managerial capacities, institutions and investments in
technological learning all influence the effectiveness with which technology can be
absorbed and adapted.
…cont.
Human resource and institutional development are crucial to facilitating technology utilization.
Institutional development includes;
Capacities for technology and business assessment,
Incubation, and
Technology testing and
Demonstration
Technology transfer processes constitutes
Technology transfer, Technology promotion,
Technology deployment, Technology innovation,
technology development, Technology research,
technology assessment, Technology information and communication,
Technology investment, Technology collaboration
Technology commercialization
…cont.
Major TT Mechanisms
Collegial interchange, conference, publication
It is informal and free exchange of information among colleagues, which includes
presentation at professional and technical conferences and publication in professional
magazines. It is widely used and the first step of linkage between academic institutes, their
research centers and industry.
Joint venture of R&D and joint research projects
A contract or agreement is drawn between university/publically funded research institute
and a contractor in which costs associated with the work are shared according to conditions
as specified in the contract.
Cooperative R&D agreement
This is an agreement between one or more university research laboratories and one or more
firms under which the university side provides personnel, facilities, or other resources with
or without reimbursement.
…cont.
Licensing
Licensing is the transfer of less-than-ownership rights in intellectual
property to a third party, to permit the third party to use intellectual
property.
Training
Technology transfer through training could be in the form of practical
training wherein students are exposed to the working methods and
requirements of jobs at industry or at the institutions.
Technology donations
It is the process of offering technology as a charity or gift and providing grant
or giving for a cause to any organization, farmers or group of farmers,
industry, institute and country.
Technology Adoption
Adoption in an organization is the decision to make full use of an

innovation or that employees will routinely use Skill as another means for
obtaining training or education.
The technology adoption lifecycle is a sociological model that describes
the adoption or acceptance of a new product or innovation, according to
the demographic and psychological characteristics of defined adopter
groups.
…cont.
Consider the next figure

…cont.
The process of adoption over time is typically illustrated as a classical normal
distribution or "bell curve". The model indicates that the first group of people to use a
new product is called "innovators", followed by "early adopters". Next come the early
majority and late majority, and the last group to eventually adopt a product are called
"Laggards" or "phobic."
Innovators – had larger farms, were more educated, more prosperous/rich and more
risk-oriented
Early adopters – younger, more educated, tended to be community leaders, less
prosperous
Early majority – more conservative but open to new ideas, active in community and
influence to neighbors.
Late majority – older, less educated, fairly conservative and less socially active
Laggards – very conservative, had small farms and capital, oldest and least educated
Introduction to Intellectual Property Rights
The concept of intellectual property (IP) will be understood better if we
understand what is meant by the term property.
To a lay mind, property means some material object belonging to a particular person.
Ownership means the right to possess, use and dispose of the property and at the
desire of the owner, to exclude the others.
In the legal sense, property refers to the bundle of rights that the law confers on
a person by virtue of the ownership and possession of an object.
Intellectual property is simply the property created by the application of human mind.
It is non-physical (incorporeal) and it derives its value from idea(s).
Different types of IP rights like patent, copyright, trade mark, design etc. can protect
these ideas and products.
…cont.
Types of Intellectual Properties
Intellectual property rights include patents, copyright, industrial design rights,
trademarks, plant variety rights, trade dress, geographical indications, and in some
jurisdictions trade secrets
IP has been generally divided into two main categories
(a) Industrial Property,
(b) Copyright.
Industrial property consists of rights relating to inventions, trademarks, patent,
geographical indications, industrial designs and appellation of origin.
Whereas copyright protects
rights related to creation of human mind in the fields of literature, music, art and audio-
visual works.
…cont.
A patent: is a statutory right granted for a limited period to an inventor in

respect of an invention to exclude any other person from manufacturing, using or
selling the patented product or from using the patented process, without due
permission.
A patent provides patent owners with protection for their inventions. protection is
granted for a limited period, generally 20 years.
Why are patents necessary?
Patents provide incentives to individuals by recognizing their creativity and offering the
possibility of material reward for their marketable inventions. These incentives
encourage innovation, which in turn enhances the quality of human life.
…cont.
What kinds of inventions can be protected?
An invention must, in general, fulfill the following conditions to be protected by a
patent.
It must be of practical use
It must show an element of “novelty”, meaning some new characteristic that is not part
of the body of existing knowledge in its particular technical field. That body of existing
knowledge is called “prior art”.
The invention must show an “inventive step” that could not be deduced by a person
with average knowledge of the technical field. Its subject matter must be accepted as
“patentable” under law.
…cont.
Who grants patents?
Patents are granted by national patent offices or by regional offices that carry out
examination work for a group of countries – for example, the European Patent
Office (EPO) and the African Intellectual Property Organization (OAPI).
Under such regional systems, an applicant requests protection for an invention in one or
more countries, and each country decides whether to offer patent protection within its
borders. The World Intellectual Property Organization (WIPO)-administered Patent
Cooperation Treaty (PCT) provides for the filing of a single international patent
application that has the same effect as national applications filed in the designated
countries. An applicant seeking protection may file one application and request
protection in as many signatory states as needed.
Appropriation of Technology
The appropriation of technology refers to the acquisition of technology in both of the

following two ways: in-house research and development and from external sources by
acquisition or strategic alliances.
Firms have gradually migrated toward the third generation principles of technology
appropriation, which emphasize the connection between appropriation and business
strategy formulation. These principles further view appropriation projects as portfolios
with their own business objectives.
Appropriation of Technology
Choosing to adopt a portfolio of technology appropriation projects involves some basic

principles. First, technological opportunity and appropriability of the project are
determined by the competitive impact of technology. Second, firms should undertake
projects only in areas where they are competitively strong. Third, risks and rewards
need to be considered in terms of the portfolio. Finally, external sourcing needs to be
considered as an alternative implementation mode. However, external sourcing should
only be used when it is a speedier or a less-costly alternative for the appropriation of a
specific technological capability relative to internal R&D, without compromising the
competitive advantage of the firm.

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CHAPTER 6

International Technology Transfer and Multinational Enterprises innovation

physical world and how to manipulate it for human purposes.

Technology transfer is the movement of new technology from its creator or

Technology transfer is in large measure an exercise in the use of language to

Adoption in an organization is the decision to make full use of an

Consider the next figure

A patent: is a statutory right granted for a limited period to an inventor in

The appropriation of technology refers to the acquisition of technology in both of the

Choosing to adopt a portfolio of technology appropriation projects involves some basic

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