Technology Transfer | Definition, Types & Categories

Technology transfer is seen as the movement of knowledge, skill, organization, value and capital from the point of generation to the site of adaptation and application. Technology transfer is the useful and beneficial exchange of ideas and innovations enabling the receiving regions or countries to expand on and utilize the knowledge received.

The document of the organization of American States, as cited in Akanbi (1987) defined technology transfer as “the process through which the production system of a country acquires the technology produced in another country for incorporation in their enterprise”.

Technology transfer also means the movement of scientific and technological ideas, men, materials and equipment from one place to another.

It can also be seen as the process of sharing skills, knowledge, technologies, methods or manufacturing and facilities among governments and 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 product, processes, applications, materials or services.

Technology transfer can be domestic, unit or international. Domestic or unit transfer of technology is when a research institute like ANAMMCO develops or designs a pattern of equipment for manufacturing and sells to another manufacturing company that is in of such equipment.

Technology transfer is said to be international when technocrats, equipment etc are taken from one part of the world to another location to help in the development of such region. Technology transfer encourages and makes possible the buying and selling of technology and techniques.

It must be noted however, that the demand for and the price of any technology is dependent upon its productive capacity or its ability or usefulness in a given technological enterprise.

From the above, it can be said that the technological knowledge that is transferred from a given region to another can assume various forms. It can be in the form of goods, services, people, organizational arrangement etc. it is important to note that the transfer involved can be concerned with the knowledge for using and operating technology. It can also be concerned with the knowledge necessary for changing technology and innovating.

Technology transfer is of great importance to the developing countries of the world especially Nigeria. Obviously Nigeria economy as well as the economy of other developing countries depends so much on the developed economies of the world.

Conceptually, the idea of technology transfer has been utilized for many years. For instance, in the olden days, Archimedes was notable for applying science to practical problems. Many companies, universities and governmental organizations now have an office of technology transfer known as Tec Transfer dedicated to identifying research which has potential commercial interests and strategies for how to exploit it.

Types of technology transfer

There are basically two types. They are the lateral technology transfer and the vertical technology transfer. The lateral technology transfer occur when the technology is transferred from one location in a developing country to another location within the same country, while the vertical technology transfer occurs when technology is transferred from a developed country to a developing country.

Methods of technology transfer

Industrial Espionage:  this is a method of technology transfer that involves having spies in vital industries around the world to obtain information in form of documents, charts and formulas etc of highly needed technology for development which were being denied by the industrial nations.

For example, most of the highly military technologies are in most cases being jealously guarded and protected by their proprietors. The secret for these technologies can only be gotten through direct investment or through espionage. This method of transfer is unethical, and equally frowned upon.

Product Sharing Arrangement: this entails a joint venture project. In this method, there is a combination of resources and technologies of the buyer and seller, to develop a production process and the consequent sharing of the benefit afterwards.

One of the disadvantages of this method is that formats and formulas for production are not transferable, and so requires a long term relationship and permanent dependency on the owners of the technology.

Licensing and franchising: this involves the transfer of rights or ownership to use a given process patent of trademark for an agreed royalty. In this way technology can be transferred without either the investment in or ownership of the production facilities by the foreign firm.

For example a Nigeria business man operates his business independently of the foreign firm but definitely has to operate with format and directives of the franchise.

Through franchising, Nigeria can acquire the format and formula from the industrialized world for consideration. Although this method is very expensive, it is the best methods of technology transfer for Nigeria and other developing countries.

Direct Purchase and Management Contracts: This has to do with the government or business organization in a country negotiating with the government or business establishment of another country whose products formula or marketing formats they wish to adopt.

The idea is to give out contract, the building of production process to a country that possesses the technology. The running of the process may have to be done by the transferring country or company over an agreed period.

Copying item already in the market: this method involve the breaking down of products in the workshop to analyze and study each component in the laboratory to see how such product can be reproduced to be exactly the same with the original.

This method is widely practiced in the eastern countries of the world like India, China, Korea, Belgium, Indonesia etc. these countries has grown very fast as a result of this methods.

Developing countries like Nigeria have for long looked down on and even rejected the products of countries engaging or using this type of technology transfer. This is why in Nigeria, products coming from China, Korea and Belgium are considered second class, inferior, imitation or sub standard.

Ironically, the economies of these countries are far well developed than that of Nigeria as a result of their appropriate use of several methods of technology transfer.

Meanwhile, products can be copied by countries through organizing industrial trade fares for international corporations where the products they intend to copy will be on display. The products are surveyed, bought at reduced prices, and are sent to the factories and laboratories for copying.

China is a good example of countries that utilize this method. Be that as it may, this method of technology transfer has some disadvantages such as:

  • It violates the laws governing patents and copyrights.
  • The labour required in copying and producing the exact copy of the products is much
  • It requires adequate and well equipped laboratories for analysis.
  • It encourages duplication of existing technologies instead of improving them.

Formal education and training: this is obviously the main channel for the acquisition of technology in every country. It involves the establishment of various institutes of technology both government and privately owned.

In these technological institutions students are trained in technical education. They may equally be sent oversees to acquire the needed knowledge and skills. Many nations have expanded greatly technology –wise using this method.

Unfortunately, developing countries like Nigeria for example has many graduates, yet many of them are roaming the street jobless.

Categories of Technology Transfer

Material Transfer: this involves the physical transfer of the hardware components of technology from the developed countries to the developing countries. For instances, when Japan supplies Nigeria with materials such as cars or car spare parts, we can say that Japan has engaged in a technology transfer with Nigeria.

Thus, material transfer can occur in the form of machineries and equipment as well as raw materials for factories and industries. It can also occur in the form of finished products such as computers, chemicals, electronic products and other machineries.

Design Transfer: this means the transfer of designs of machinery and transfer of ideas for the development of countries. In other words, design transfer implies the transfer of the prototype of machineries alongside the ideas and process from one country to another.

Capacity Transfer: this is the movement of the management and other process needed to turn materials and design transfer to physical or tangible products and services. This could be in the form of training for capacity building.

Factors that Favour Technology Transfer

There are several factors that encourage and favour technology transfer in any given country. Some of these factors include accessibility, availability of funds, mutual agreement, and availability of maintenance personnel.

Accessibility: in order for technology transfer to be carried out successfully ad effectively, its accessibility to the receiving country is highly important. It has been noted that unfriendly policies, culture and religion differences usually constitute obstacles that seriously affect the transfer of technology from one country to another.

For example, when an embargo or sanction is placed on a nation, it will be very difficult if not impossible for other nations to have any commercial activities with her. Thus, in this situation, technology transfer will be affected. Hence, accessibility is an important factor in the transfer of technology.

Availability of funds: money is very vital in technology transfer. This is because technology transfer involves the movement of not only men, ideas, knowledge but also materials, production processes and even formats, from one place to another.

The movement of all these things requires large amount of money. For instance, materials needed must be bought; the skills, idea and knowledge needed to facilitate the transfer also needed money to purchase them. Besides, the nation negotiating for a transfer of technology should be able to have enough money to pay for and also maintain the technology she is receiving from another country.

Mutual Agreement: mutual agreement between the two parties engaging in technology transfer is quite a necessary factor. Hence, in order for technology transfer to take place, there must be a willing seller and a willing buyer who mutually agree to sell and buy technology respectively.

The implication of this factor is that where there is no nation willing to give or let go of her technology to another nation, then technology transfer will be impossible. Even when there is a willing nation or party to receive the technology, there should and must be a willing nation or party to give what the receiver request for.

Availability of maintenance personnel: there is need for local maintenance personnel to be trained in order to maintain the equipment or machines transferred from one country to another. This is because long term use causes wear and tear in every machine or equipment where there are no technocrats.

Apart from the factors that favour technology transfer, there are other conditions that must be met or fulfilled in order for technology transfer to take place. These other conditions are: (1) that the said technology must exist or be generated at one end and (2) that there must be incentive to adapt and use the technology.

Benefits of Technology Transfer

  • It encourages positive mutual relationship among the nations involved.
  • It shapes and enhances the standard of living of the citizens of a nation.
  • It brings about technological and economic growth and development of a nation.
  • It encourages better communication and dissemination of information among nations.
  • It encourages national and international integration, oneness and friendship among nations.
  • It encourages the establishment of a direct business link among the nations.

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