American International Journal of Business Management (AIJBM)

ISSN- 2379-106X, www.aijbm.com Volume 3, Issue 3 (March 2020), PP 25-30

Review of the Strategies for Technology Transfer

In Manufacturing Sector
NASER ELSHAHOUPY
Department of Engineering Business Management, Razak Faculty of Technology and Informatics,
Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia
*Corresponding Author: NASER ELSHAHOUPY

ABSTRACT:– Over the past decades, Technology transfer was a fast-growing activity. which has received
substantial attention from the industry sector. transfer of the new and superior technology as one of the Methods
of maintaining a competitive advantage. Technology Transfer enables the organization to shortcut access to new
technology. to reach this goal, the technology transfer strategy should completely be considered. The objective
of this review article is to study how technology is transferred to the manufacturing sector. However, the article
attempts to highlight the issues involved in the technology transfer in manufacturing and understand the aspects
related to technology transfer. In terms of the strategy, methods, the process of transfer, and technology transfer
in the context of Industry 4.0.

Keywords:- Technology transfer; Transfer strategies; Technology Transfer process; Technology Transfer in
the Industry 4.0

I. INTRODUCTION
Technology is one of the most significant success drivers in the field of competition for organizations.
Technology transfer is also an important issue which allows for access and technology acquisition to be
effectively used for economic development and technological growth in least-developed countries. Migration of
technology from the technology and technical information owners to other countries in different forms. [1]
The need to determine the elements that add value to an enterprise requires developing different
strategies with technological developments, customer needs, differences in customer perception in many
aspects, business profitability, the needs of the enterprise, the acquisition of sustainable competitive advantage,
the business analysis, and the value chain. These strategies will be possible with the adaptation to the internal
and external environment of the business. Technology transfer is an area where these strategies need to be
developed. The existence of new technologies that have achieved success brings the efforts of enterprises to
transfer them to gain a competitive advantage. However, the fact that the environment of the enterprise differs
from the environment in which new technology is applied constitutes a risk factor for enterprises in developing
countries. For the minimization of risk, specific strategies should be developed and the transfer process should
be carried out in adaptation. [2]
Technology transfer can be divided into two main areas: 1) Trade-in goods and services: this consists
of manufactured goods and services, for instance, computer software and financial services. This can be done
either through direct export, export sales teams or local agents or through joint ventures; and 2) skills and
knowledge exchange: direct selling of technical skills, licenses, franchising, knowledge contracts, management
contracts and providing consultancy. [3]
Organizations may be able to explore their technological assets in a variety of ways in order to improve
revenue and multi-dimensional total growth, but the internal use of technological assets has been significant (by
understanding, preparation, design, production, manufacture and marketing/sales of goods, processes, and
services). Importantly, developments in TT have increased internationally in recent years. [4]
Taking into consideration that the high production costs of new technologies and the fact that more
than 50% of the new products and processes are outsourced, a wide range of disciplines, including economics
and administration, have been widely studied for many years. Generally, technology transfer is all processes
designed to transfer technological know-how from a donor company to a recipient. Technology transfer is a
complex process requiring clear definitions from the outset in order to ensure that both the dispatcher and the
receiver of technology understand the ramifications clearly and seek to optimize the advantages for both parties.
Transfer of technology is a process of trade-off that allows a beneficiary business to access or mimic the donor'
s maximum technical capacities. Technology transfer means moving technology from one person and
organization or country to another via certain communication channels. For developing countries, which as one
Group conduct little domestic R&D and therefore have little domestic sources of new technologies, transfer of
knowledge and thus information becomes even more critical for productivity growth. Over time, the cycle of

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 Review of the Strategies for Technology Transfer in Manufacturing Sector

technology transfer from industrially developed countries to developing countries has become increasingly
important. [5]
Industries are not generally born with Industry 4.0 characteristics. The new technologies from their
own offices, branches, manufacturers and/or even the models of their TT industry are being implemented
through an evolutionary process. Therefore TT is required in one way or another so that an industry can be
regarded as suitable for accompanying the Fourth Industrial Revolution. The production and dissemination of
new technologies will meet the needs of the increasingly competitive market.[6]
Therefore, the motivation of this study is to provide a conceptual framework for technology transfer
within the manufacturing sector. In addition, define approaches for how companies can move the technologies
needed to make a successful transition to an advanced production environment. Through recognizing this,
organizations may more effectively transfer the appropriate technology to compete at a time when the
competition has intensified

II. TECHNOLOGY TRANSFER

The technology transfer involves the practical use of new technology by an academic or industrial
research group and seeks to promote the use of technology in an industrial setting. New technology and leading
technology must be transported in a controlled way to an industrial environment. A new technology or process
can not automatically be expected to match an organization and the initial emphasis is on the analysis and
evaluation of the advantages resulting from its use. [7]
TT is a mechanism by which technology transfers from one business to another. Technology
transferred is a multidimensional asset that may take several forms: tangible and intangible. An effective TT will
not only transfer the technical knowledge required to produce the product to its destination but also the
opportunity to learn, create and manufacture the technology behind such products independently. Therefore TT
has gained that popularity not only in the developed world but also in many developing economies as the
strategy for rising competitiveness both at company and industry level. [8]
The product life cycle is continually shortened by the rapid advancement of technology. A business
organization has to continue developing new technologies to distinguish it from rivals in order to compete
against other companies in fiercely competitive international markets. Technology may refer to a complex
phenomenon of know-how and techniques and be identifiable as an applied useful information system
represented or expressed in human beings and physical objects and may not be possible without going into
formal agreements and formal procedure from' industrialized / developing countries' to the still' developing
countries'. Organizations use advanced technologies to adapt to current obstacles and new / better products,
processes/activities, programs and practices to improve efficiency and performance. Inter-organizational transfer
of technology (ITT) is a key component of the innovation processes of business organizations.
Technology transfer facing challenges in the global economy for societies and businesses. In reality,
the mechanism is complex by means of which technology moves from external sources into the business,
country and supply chain. The increasing numbers of researchers, whose findings are considered to be useful in
technology decision-making, have studied the complexity of transfer process. [4]

2.1 Types of methods for technology transfer

Through technology transfer methods, the applicant can access the necessary technology via a number of pre-
defined activities. The most important ways to transfer technology are:
1. Faulty technology transfer: technology is first put on the production track and then moved to research centers
slowly in order to make the use of findings in the production area at some time.
2. Unfinalized or independent transfer: in this state, research center technology is progressively growing and
wind up at the production level. It will take a while for this process.
3. Complete technology transfer: this approach incorporates the two previous approaches, in which technology
is being used concurrently for the first time in research and production centers, as well as in research and
development centers to try expanding and improving productivity with creativity.
4. Commercial technology transfer: after the degradation of manufacturing equipment, any new technology is
replaced directly. Thus, research institutions will have no position. [9]

2.2 Technology Transfer process

The technical transfer process includes six general steps:
Step 1, technology selection and acquisition: technological picking process from current technologies and
negotiation and contract finalization for their procurement; Step 2, the adaptation of the technology being
imported: method of closely linking imported technology with scheme requirements and the country's sources
and conditions; Step 3, Imported Technology Attraction: full recipient knowledge of all technology components
acquired; Step 4, transferred technology application: acquired technology utilization process; Step 5, expansion

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 Review of the Strategies for Technology Transfer in Manufacturing Sector

of imported technology: the phase whereby the technology acquired can extend its technology and its processes
and enhanced processes by using its adaptation, appeal and application, knowledge, skills, and findings of
internal research; Step 6, imported technology dissemination: the act of enhancing and expanded technical
components acquired at national level. [9]
How knowledge is transmitted is seen as critical to successful transfer as to how researchers and
industry work together and interact (i.e. how information is moving from researchers to practitioners). There are
several articles that stress the need to have someone present for the introduction of new technology that has been
created (ie, a researcher). Nevertheless, the use of insider technology as it proved to increase acceptance
compared to the use of researchers or other external experts introducing a new technology. Practitioners are also
often listed as a predictor for effective transitions to use new technology. Therefore, the value for software
developers of workshops and meetings is underlined. The outcomes of cost-benefit or risk evaluations are also
often reported. Another factor is crucial. The way the transfer is performed, which medium is also essential.
Scientific publications, often seen by the industry as difficult to understand, are in particular criticized as
inappropriate. [10]
In the creation of a system at which technology transfer is feasible, a range of stages can be
highlighted: 1. Generate an innovative technology concept and propose it; 2. Confirmation of the main means by
laboratory work to achieve the principle of technology; 3. Creation of technology; 4. Developed innovative
technology for a production system; 5. Production and distribution of products made by innovative technology
established. In this sense, the technology transfer can be viewed as the promotion of the goals achieved
following each of the above steps. [11]
The procedures and processes of technology transfer can be outlined as follows: [12]
 Technology selection: The first and most significant part of the transference process is the collection,
assessment, comparison of the technology in the country of origin to the country of destination for the
configuration and adaptation of the technology to the local requirements, of the type of system used for
the consumer.
 Adaptation of technology: The adaptation process to certain locations, including infrastructure,
community, expertise and training level, human resources, technology of manufacturing equipment, as
well as geographical and national conditions and objectives of the imported technology must be
identified. The foundation for technical self-sustainability is technological adaptation.
 Absorption technology: Technology absorption means implementing transferred technology across all
processes so that the user of the technology acquires all the skills necessary to maximize the use of the
technology (installation, development, etc.).
 Application and execution: The use of the acquired technology in the manufacturing and distribution of
goods and services after adaptation to local environmental conditions.
 Imported Technology Development: This is a stage involving the acquisition of experience and know-
how from technology transfers, the integration of domestic knowledge and the development of new
technologies for the manufacture and provision of products.

III. TRANSFER STRATEGY

The implementation of an established plan can be the key to successful technology transfer, as with any
complex system. The strategy is described as a roadmap for the purposes of this article that describes the
progress of the task and identifies potential barriers. The National R&D facilities have been staffed with three
types of technology transfer strategies: passive, aggressive and entrepreneurial. Each strategy requires the
developer and end-user to be committed to achieving the strategy.
A passive strategy for information dissemination or a response to a pull effect includes information or
answers to questions. If final consumers first communicate technical specifications (and/or requests) and then
attempt to access the technology, a pull technique occurs. The organization is aware of the business need, it
finds and discovers a solution that meets this need (source) and passes innovation.
A push-through approach includes "pushing" innovations to the market. Beginning with one or more
creativity, moving forward transmission strategies. In addition, the market/operator (destination) is made aware
of the innovation, the related market need and business opportunities and innovation are transferred from source
to destination (via some transfer mechanism). There may be no need for technology at this time, but the idea is
to push the technology forward to change the paradigm for technology. The business strategy combines passive
and active approaches and incorporates the idea of using the technology to boost an organization's economic
well-being, and then to create jobs. [13]

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 Review of the Strategies for Technology Transfer in Manufacturing Sector

3.1 Technology Transfer method

The transition of technology can be described as a flow from technology holders to technology users.
They can be bought, leased, lent or licensed. Various organizations can consist of technology transfer.
Innovation (technology creators), marketing (businesses) and central government (economic policy) are the
most important. The rate of technology transfer and the innovation potential of countries are highly correlated.
[14] Main types of legal agreement for technological transfer are: [15]
• License deals or partial or full IP license transfers.
• Contracts of competence. The object of the know-how contract is in some cases included in the license
agreement.
• Franchise contracts are arrangements in which the franchisor gives the franchisor the right to take advantage of
the franchise.
• The purpose of the selling and importation contracts for capital goods with information transfer is to sell or to
buy items for use in accordance with particular know-how.
• Contracts for joint-venture. Cooperation between two or more firms, in the creation of a single, special project
through creativity, creates a new company based on the same business strategy. This joint venture involves
cooperation among companies.
• Turnkey projects include the execution of a project based on an order for a third party by a specialist team.
• The technological collaboration means cooperative arrangements between two or more organizations to
develop new products or technologies. It involves partnership arrangements between different organizations.
• The Technical Assistance Trade Agreement covers the selling of certain goods or services requiring technical
assistance.
• The manufacturing agreement means the selling of the commodity or service manufacturing right.
• Single or non-exclusive IP ownership contracts.
• Contracts for counselling.
• Agreement to Subcontract.
The legal relationship between the individual or the transmitting company and the person receiving the
technology is contractual and thus the transferor of technology intends to transfer the ownership, consent or
knowledge to the intellectual property in question. Such deals are licensed in many countries by the National
Intellectual Property Office.
For successful technology transfer, organizational culture must be addressed. The way people behave and the
manner things are done represents every organization's different culture. Organizational culture comprises the
organization's ethos and core values, its dedication or its resistance to change, etc. For societies where
transparency and willingness to change are possible, the introduction of new technologies will be simpler. In
other societies, it may be difficult to deploy new technologies because of resistance to change in the
organization. [7]

3.2 Success of Technology Transfer

The aspects of successful technology transfer could be as following:
 Communication: In terms of distance and time, the technology transfer chain is often long. Another key
ingredient in the recipe for effective technology transfer is therefore effective communication. Efficient and
effective bidirectional communication and business between key stakeholders will do much to eliminate
obstacles.
 Certainty: the lack of certainty and the consequent high levels of risk, both real and perceived, are
recognized as major obstacles to the effective establishment and continuing functional market activity. To key
stakeholders such as developers, suppliers and users, removing barriers to technology transfer also translates
into increased confidence and decreased risk.
 Challenges: There are many hurdles to successful transfer of technology. Throughout the transfer route,
from the supply side of technology to the demand side, impediments exist at very nodes and for every
connection in the technology transfer chain due to restrictions on the flow of information and materials.
 Capacity: improve technology transfer that promotes sustainable development in the sense of creating
favorable technology transfer circumstances, ensuring that all stakeholders are able to fulfill their positions and
fulfill their obligations in a timely manner. All key players and stakeholders need the requisite knowledge and
skills to fulfill their expected roles and tasks.
 Commitment: A strong commitment to the successful transfer of technology can be accomplished to
meet challenges, provide technology consumers with the right choice, increase trust, decrease risks, enhance
contact between stakeholders involved in technology transfer activities and buildings and enhance the enabling
climate and thus capacity to move technology. [16]

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 Review of the Strategies for Technology Transfer in Manufacturing Sector

IV. TECHNOLOGY TRANSFER IN INDUSRTY 4.0

Manufacturing processes were upgraded to a smart level in Industry 4.0. Intelligent manufacturing uses
advanced data and manufacturing technology to achieve flexible, intelligent and reconfigurable manufacturing
processes to meet a competitive global market. [17] Industry 4.0's vision can be interpreted as a holistic
digitalization and integration of production processes from the order of the consumer to downstream product
services through the development of manufacturing processes. [18]
Nevertheless, with a focus on emerging countries that still have many resource constraints, dynamic
mechanisms of technology acquisition and transition arise. In order to adapt to the principle of Industry 4.0, an
industry must first undergo internal and external TT processes. Internal TT processes are the ones whose
industry is limited to its resources such as the transfer of knowledge between experienced employees and new-
employees. When a company restricts its TT to internal processes (for example, from headquarters to branch),
remaining on the market may be challenging. The industry sector deals with external vendors, research
institutions, the government etc. services in external processes. External technology transfer saves resources,
research and development, investments and offers competitive advantages, it would be infeasible in other ways.
[6]
In Germany, the project that propelled Industry 4.0 united the country's universities, industries, and
government, mainly focusing on global competitiveness. In TT research, the university-industry-government
relationship is much discussed, mainly in already consolidated scenarios. In face of this new industrial scenario,
this relationship needs to be contextualized, due to numerous changes in the productive and organizational
systems. This process of TT in Industry 4.0 will mobilize the entire country, and will demand the effective
university-industry-government integration with high-technology manufacturers. [19]

V. CONSLUSION
Technology is one of the most important factors that will be present in the field of global competition
in the performance of organizations. Technology transfer is also an important issue which offers the possibility
of accessing and acquiring technology to use it effectively in terms of technology for the economic development
and growth of less developed countries.
To ensure efficient and high-quality manufacturing processes, appropriate technology transfer is
important in industry. The transition of technology does not mean the transfer party's one-time behavior towards
the transferred party, but rather constant exchange of information between both parties in order to retain the
upgraded technology. The choice of a method of technology transfer should be focused on the study of
technology, long term strategy of collaboration with the manufacturer of a product, investment capital, and the
company's technical capacity to incorporate the technology.
The more complicated the system is, the relations between the customer and the manufacturer should
be closer when selecting a transfer process. As noted earlier, the transition of technology does not stop with
delivery of equipment. Equipment does not generate new abilities in itself. A transfer of expertise, skills, and
intellectual property rights will make real changes in the work of the business.

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*Corresponding Author: NASER ELSHAHOUPY

Department of Engineering Business Management, Razak Faculty of Technology and Informatics,
Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia

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