Technology Transfer in India
MANAGERIAL ECONOMICS PROJECT 01 IMPACT OF TECHNOLOGICAL TRANSFER AND LIKELY TECHNOLOGICAL CHANGE group 10 TECHNOLOGY TRANSFER Technology transfer is defined as the process of sharing of ideas, skills, knowledge, technologies, methods of manufacturing, samples of manufacturing and improved and modern facilities among various governments 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.
These goods and services help provide mutual benefit to society at large. Technology transfer is considered a subset of ‘Knowledge Transfer’. TECHNOLOGY TRANSFER IN INDIA * The beginning The government, post independence initially focussed only on sectors such as security, healthcare and agriculture as its emphasis lay primarily on public research. India followed an economic policy aimed primarily at the welfare of the citizens and there was no importance attached to technology transfer. Everything was centralized and there were rigid restrictions imposed on the private sector.
The liberalization policy of 1991 opened the door for the development of technology and research as it allowed global investment in research. Since then, technology transfer in India has been a combined effort by the public and the private sector. Global sharing of improved and innovative technology has been responsible for advancements in the IT, engineering and mining sectors amongst many others. * The need for public-private partnership The private sector in India is expected to fill in the void created by the slow withdrawal of the public sector after the liberalization olicy in 1991. The growth rate has been diminishing and hence private investment is encouraged so as to boost profits. Private firms operate with a higher efficiency and undue delays are avoided. They also possess better expertise when it comes to marketing and distribution and constant improvement and innovation of their products. * To the university, technology transfer gives the opportunity to have a positive impact on the marketplace and products, and thus have an impact on the economy. To the industrial community, technology transfer gives the private, for-profit sector, the means to tap the very significant world of new discoveries found in the academic laboratory. * To the public at large, it provides an ideal platform for the production of good quality goods and services available at competitive rates. * The future of technology transfer in India Technology transfer in India is constantly on the rise. It is predicted that the revenue generated from the licensing of inventions and the sale of technology transfer products would account for more than a billion dollars.
India would undertake global research in association with the US and there would be an amalgamation of public and private research. Global investment is expected to benefit India considerably and sound technology management bodies would aid the world mutually. PEST ANALYSIS A company is always affected by the external factors surrounding it, known as the macro-environmental factors. The acronym PEST (Political, Economic, Socio-cultural and Technological factors) is used to describe a framework for the analysis of these macro-environmental factors. * POLITICAL FACTORS
India is a democracy and has remained stable in nature since independence in 1947. The government has always had the nation’s progress and welfare to society at the top of its priorities. Since the liberalization policy in 1991, the private sector has expectedly stepped up to make a difference. Foreign direct investment (FDI) has been encouraged and this has played a crucial role in the transfer of technology. India has opened up to trade and relaxed its foreign trade regulations considerably in order to procure good quality goods and services. Transfer of technology takes place very quickly once a new product is well received by the market.
For example, when BlackBerry was a hit in the Indian mobile phone market, Micromax, a much smaller Indian company came out with a phone with similar features at a much lesser price. Relations between different countries in the world also often determine the flow of technology transfer. Political factors, at times also hinder the transfer of technology. Political parties are able to lobby their cause in the Government with their power and often cause undue delays in projects. Trade unions, due to rapidly changing and volatile economic conditions have new demands repeatedly, which halt the production process.
Excessive government intervention in the form of legal formalities and documentation also causes delay in the transfer of technology. * ECONOMIC FACTORS During times of boom in the business cycle, companies allocate more funds to research and development activities in order to create new and innovative products. Technological transfer takes place at a quicker rate between countries due to high demand and increase in purchasing power amongst the people. The unemployment rate of the country too, determines the development and spread of technology. A high rate of unemployment increases our dependence on the technology available.
Likewise, a rapid development in technology and its transfer then causes technological unemployment, where machines replace human labour. In times of recession and depression, characterized by low demand and low production the development of technology comes to a grinding halt. * SOCIO-CULTURAL FACTORS Transfer of technology is also affected to quite an extent by the socio-cultural environment. Multinational corporations (MNCs) have opened branches and centres throughout many regions in India. There are various seminars and trade festivals and conventions organised which are ell attended by professionals all around the world. New ideas and thoughts are exchanged in this process. Due to rapid pace of urbanization and globalization, especially since the economic policy of 1991, there has been a steady increase in demand for consumer durables. This increase in purchasing power parity has been further helped by better educational facilities and services. India with its abundant population provides an abundant supply of labour at a cheap wage rate. This helps companies expand their scale of production within a comparatively short span of time. However this too has its disadvantages.
Workers are exploited miserably and are made to work in sub-standard conditions. The gap between the rich and the poor has increased by quite an extent. * TECHNOLOGICAL FACTORS Transfer of technology helps in the production of competitive goods and services on a large scale. This however is controlled by the laws with regard to patents and copyrights laid down by the government. Technological unemployment though not common in countries like India and China, is quite common in the more developed countries such as USA, Germany etc where human capital is replaced by machinery.
