What is Transfer of Technology?

Transfer of technology refers to transfer of physical goods i.e. capital goods and transfer of tacit knowledge i.e. way of producting goods or establishing services from one agency to another agency. Transfer of technology includes transfer of rights to use the patented knowledge, secret knowledge, trade mark and brand name. International transfer of technology means transfer of technology among firms located in different of countries.

Trends in the Transfer of Technology.

  • Transfer of technology has become a global phenomenon and has shown a great impact on international trade.
  • There has been a growing tendency for companies to seek increased governmental protection of intellectual property rights through unilateral action and multilateral agreements.

Forms of Technology Transfer:

  1. Equity form or internalized form.
  2. Non-equity form or externalized form.

Equity form or internalized form refers to investment associated technology transfer where control resides with the transferor of technology. The transferor normally holds the majority or full equity ownership.

Non-equity, form refers to those transfers of technology which are not associated with equity participation, such as licensing, sub-contracting, strategic alliance etc. The distinguishing feature between these two forms of technology transfer is that in equity form of technology transfer the transferor has a significant and continuing financial stake in the success of the affiliate and, thus, sees the affiliate as an integral part of the global strategy, while non-equity form of technology transfer is without equity participation.

The Issues in Technology Transfer:

Proprietorial Rights of Owner: The most important issue in technology transfer is the proprietorial rights of the owner of technology. There has been pressure on various governments to build strict intellectual property right’s regimes through unilateral action and multilateral agreements.

Liberalization: To attract foreign direct investment, a country is forced to liberalize its technology policy. It has resulted in increased vulnerability of large number of developing countries.

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