4.4.3 Methods of Technology Transfer

There are several methods of technology transfer. But certain things should be kept in

mind while choosing a technology transfer method like future strategy, type of

technology, resources availability, intellectual property rights, etc. The explanation of

various technology transfer methods is given below:

1. Licensing: In this type the owner/developer of the technology grants permission

to another company (receiver/absorber) in the form of license to use the technology

for certain purposes and for certain period of time.

Licensing is of two types:

a. Licensing in: Where the absorber has full rights for technology forever.

b. Licensing out: A developer may allocate rights to any other party other than

absorber at any point of time.

The main advantage of this method is low-cost involvement. However, the

purchase of license requires certain requirements to be fulfilled on the side of the

absorber of technology like sufficient knowledge, skill and expertise staff, and a

well maintained and suitable manufacturing base.

2. Support contract: In this type of technology transfer, the developer of technology is

involved in each and every phase of implementing technology which ensures closer

co-operation between both the parties and ensure transfer efficiency as well.

3. Joint venture: A particular business is executed by both the parties within an

agreement. The business may include mutual assets, management, loss bearing,

profit sharing, marketing, servicing, etc. This method ensures long-term co-operation

between both parties. Low cost and motivation of all participants in the successful

transfer of technology are also the main advantages of choosing this method.

However, the difference between the vision and objectives of both parties may create

hurdles in achieving the desired goal.

4. Franchising: In this method, the developer shares its trademark and business model

with the absorber. The absorber can use the technology as per the developer's

specifications. The developer can also share its expertise and knowledge in running

the business model. However, in this method, the absorber dependency on the

developer is more as compared to other methods.

5. Strategic alliance: This method generally occurs between two big companies that

share specific skills in order to develop new technology. For example, joint labs,

research programmes, production of new products, etc. However, complexities due

to different culture in the companies may create problems in execution.