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ARADA, Lorenzo SD.

NSTPCW2 A61B

TECHNOLOGY TRANSFER AND DEVELOPMENT


I. Hard and Soft Technology
Technology transfer involves the acquisition of inventive activity by secondary users.
This incorporates the transfer of hardware as well as software. Hardware refers to the
transfer of physical systems such as production systems, while software refers to the knowledge
base that may be essential in the smooth running of the hardware.
The literature on soft and hard technologies uses the terms inconsistently. One use of
the term hard refersto physical devices such as in hardware and machinery, while soft is
associated with immaterial artifacts, for example, describing (business) processes or production
techniques (Burgess and Gules, 1998; Hlupic, Pouloudi, and Rzevski, 2002). For some, such as
Zhouying (2004), hard technologies are about knowledge coming from natural science operating
in the physical worlds, while soft technologies are associated with knowledge from non-natural
science like human thinking, ideologies, emotions, or human and organizational behavior.
Another perspective sees soft technologies as a compliant and yielding system while
hard technologies inhibit and constrain. As Norman puts it, hard technology makes us
subservient, soft technology puts us in charge (Norman, 1993, p. p232), a distinction that
echoes Franklins (1999) division of technologies into those that are holistic (soft) and those that
are prescriptive (hard). These different perspectives are largely reconcilable if we remember tha
t technologies areassemblies. What makes technologies soft is that the orchestration of the
phenomena they use is undertaken by humans whereas, in hard technologies, that
orchestration has been built into the technology itself. This is not a question of automation.
Some very hard technologies such as factory production lines or legal systems rely in whole or
in part on humans engaging, often skillfully, in their operation. However, the role of humans is
proscribed by such hard technologies: the operator of a machine that requires a certain
pressure of steam to be maintained through the operation of valves and levers would be unwise
to
exercise
too
much
creativity
or
to
significantly
adapt
the process. Similarly, a judge who modified laws as he or she felt fit would not last long in most
legal systems.Participants in soft technologies, on the other hand, may exercise great creativity:
a knitter who changes the knitting process to produce a novel pattern, or a teacher who adapts
a pedagogy to suit a class may change the technology at will. Our perspective recognizes both
the fact that humans enact soft technologies and the restrictive nature of hard technologies that
may have far-reaching and undesirable sociological effects (Ellul, 1970). In brief:

Soft technologies are filled with latent possibilities and potentials, enabling many creative
and flexible uses, whether they are human processes or embodied in machines

Hard technologies are concerned with efficiency, replicability and the elimination of
errors.

Both soft and hard technologies may be created and evolve through a process of
assembly. The difference between them lies in the manner of assembly. Hard technology
assemblies replace softer parts with harder ones: for instance, an automatic assignment

submission system may replace a softer and more flexible manual submission process. Soft
technologies become softer through augmentation and extension: the hardest of technologies
may be softened by adding it to another. For instance, to extend the previous example, were a
teacher to allow students to submit via email in the event of the automated submission system
failing (for instance, if it limited upload sizes or allowable dates for submission) then it would
become softer, more malleable and forgiving.
II. Process of Technology Development
Innovation and capability theory have both pointed to the highly complex pattern of
relationships that either influences or shapes technology proper. Large-scale firms have more
resources than small-scale ones, though the latter are not passive absorbers. They might have
to rely on their environment institutions.
It was expected by developmentalists that labor-abundant countries would adopt laborintensive methods of production. However, this did not happen because a technological
imperative exists that overrules allocative mechanisms. Hence, studies emerged showing that
technology comes in packages. Acquisition of technology or development of technology could
be made difficult by, for example, the enterprises culture or its environment. What this all means
is that there is, for example, no clear-cut division between externalities and endogenous factors
and between some carriers of technology.
Development of technology depends on what and how knowledge, skills, and
information can be acquired. Enterprises, whatever their size, are not passive entities. They
undertake a variety of activities to develop their technology and in this study they have been
divided among three technology acquisition strategies.
Figure 1.1 depicts a firm acquiring (carriers of) technology, through a variety of activities
which in turn describe the inter-enterprise, enterprise-institutional, and intra-enterprise
technology acquisition strategies (TAS). These activities may (not) result in the development of
technology which is defined in terms of capital intensity raise (K/L) or mechanization of
production and higher productivity (O/L). While we have described some of the constraints that
might hinder the transfer of technology, all three technology acquisition strategies are means to
overcome the constraints and add to the firms learning process/
III. Measuring Technology Development
Not all countries need to be on the cutting age of global technological advance, but
every country needs the capacity to understand and adapt global technologies for local needs. It
is often mistakenly assumed that technology transfer and diffusion are relatively easy, that
developing countries can simply import and apply knowledge from outside by obtaining equipment, seeds and pills. But for firms or farms to use a new technology to identify its potential
benefits, to learn it, and adapt it requires new skills and the ability to learn and develop new
skills with ease (Lall, 2000b). For example, a study from Thailand shows that 4 years of
education triples the chance that a farmer will use fertilizer effectively (Lipton et al., 2001).
Furthermore, with todays rapidity of technological advance, the skill and knowledge
required is the adaptability to master new technology continuously.
Beyond the capacity to use or adopt new techniques, developing countries also need
capacity to invent and adapt new technologies. Global markets will not develop cures for

malaria, cheap wireless computers, or pest-resistant cassava products with huge gains for
the well-being of poor people but not much prot potential. Poor countries need to foster their
own creativity to use both local and global knowledge and science to find technological solutions
to their development problems. Centers of excellence in the South can do much to produce
technology tools for tackling poverty.
There is a long history of efforts to develop science and technology in developing
countries. In the network age, nurturing technological creativity and access to global
technologies requires flexible, competitive, dynamic economic environments, private and public
sector institutions, and a mini- mum of physical infrastructure. Three kinds of capacity are
particularly critical in this new environment. First, technological change dramatically raises the
premium every country should place on investing in the education and training of its people. And
in the network age, primary education will not suffice: the advanced science and engineering
skills developed in secondary and tertiary schools, as well as vocational and on-the-job training,
are increasingly important capacities. Second, the capacity to develop policies that manage
technology such as intellectual property rights as well as the risks for socio-economic
development, the environment and health. Third, the capacity to be connected to and participate
in global technology development networks.
A number of developing countries, or parts of them, are well connected to global
networks. Concentrated in North America, Western Europe and Japan, global hubs of
innovation are emerging in developing countries such as those in Bangalore (India), El Ghazala
(Tunisia), Sao Paolo (Brazil), and Gauteng (South Africa). Among the 46 top global hubs ranked
by the Wired magazine ranking, nine are in Asia, two in South America, and two in Africa
(Hillner, 2000). Developing countries are competitive in global markets for technology intensive
products. Korea, Singapore, China, Mexico, Malaysia are among the top 15 exporters of hightechnology products, and outpace Ireland, Canada, Sweden and other long industrialized
countries. Private sector investments in research-based technology sectors are increasing
(Chako, 2001). Migration creates diaspora, which in turn creates business networks. Take the
strong link between Silicon Valley and Bangalore, built on the Indian diaspora. A global labour
market is in the making in skill-intensive professions, and the diasporas strengthen the social
ties in economic networks as they invest at home, but also facilitate contacts for market access
(Kapur, 2001).
Most signicantly, public and private sector efforts are producing breakthroughs in
adaptations that meet the needs of human development, from the public initiative to develop a
low-cost computer in Brazil to Indias simputer, a $300 computer that is wireless and runs on
batteries, to malaria treatment in Vietnam that combines traditional herbal knowledge with
modern science (WHO, 2000; Simputer Trust, 2000; Kirkman, 2001).

When a country reviews its technology policies, a useful starting point is a realistic
assessment of its current situation in technological progress. The Technology Achievement
Index (TAI), a composite index of technological achievement, rejects the level of technological
progress and thus the capacity of a country to participate in the network age. A composite index
helps a country situate itself relative to others, especially those farther ahead. Many elements
make up a countrys technological achievement, but an overall assessment is more easily made
based on a single composite measure than on dozens of different measures. Like other
composite indices in Human Development Reports such as the Human Development Index

(HDI), the TAI is intended to be used as a starting point to make an overall assessment, to be
followed by examining different indicators in greater detail.
The index aims to capture technological achievements of a country in four dimensions:
creating new technology; diffusing recent innovations; diffusing existing technologies that are
still basic inputs to the industrial and the network age; and building a human skill base for
technological creation and adoption.
The index focuses on outcomes and achievements rather than on effort or inputs such
as numbers of scientists, R&D expenditures, or policy environments. This is because the causal
relationship between these inputs and outcomes are not well known. For example, does a larger
number of scientists lead to more output in technological advance? Do countries that spend
more on R&D achieve more?
These approaches differ from some other indexes of technological advance that have
been developed. The Technology Index published in the Harvard Competitiveness Reports
focuses on the enabling policy environment for technological innovation and diffusion.2 The
Index of Technological Progress developed by Rodriguez and Wilson focuses only on
information telecommunications technologies.
The TAI is not a measure of which country is leading in global technology development,
but focuses on how well the country as a whole is participating in creating and using technology.
Take the US (a global technology power- house) and Finland. The US has far more inventions
and Internet hosts in total than does Finland, but it does not rank as highly in the index because
in Finland the Internet is more widely diffused and more is being done to develop a
technological skill base throughout the population.
Two particular concerns influenced the design of this index.
First, the concern to make it as relevant as possible for the broad range of the worlds countries,
especially developing countries with low levels of technological advance, and to be able to
distinguish amongst these countries. Large proportions of people in these countries still do not
have access to older technologies such as the telephone, electricity, agricultural machines, or
motorized transport. It was important to include a broad range of new and old technologies.
Second, the concern to be of direct policy relevance to the challenges faced by a wide range of
countries.
Components of the Index
The TAI focuses on four dimensions of technological capacity that are important to reap
the benefits of the network age. These indicators relate to important technology policy
objectives for all countries, regardless of their level of development.
Creation of Technology. Not all countries need to be at the leading edge of global
technological development, but the capacity to innovate is relevant for all countries and
constitutes the highest level of technological capacity. The global economy gives big rewards
to the leaders and owners of technological innovation. All countries need to have the capacity
to innovate because the ability to innovate in the use of technology cannot be fully developed
without the capacity to create, especially to adapt products and processes to local conditions.
Innovation occurs throughout society, in formal and informal settings, although the current

trend is towards increasing commercialization and formalization of the process of innovation.


In the absence of perfect indicators and data series, the TAI uses two indicators to capture the
level of innovation in a society. The first is the number of patents granted per capita, to reflect
the current level of invention activity. The second is receipt of royalty and license fees from
abroad per capita, to reflect the stock of successful past innovations that are still useful and
hence have market value.
Diffusion of Recent Innovations. All countries must adopt innovations to benefit from the
opportunities of the network age. This is measured by diffusion of the Internet, indispensable
to participation, and by exports of high-technology and medium-technology products as a
share of all exports. Higher technology goods present important opportunities to developing
countries. Many high-technology sectors are among the most dynamic in the global economy.
Upgrading the technology content of the manufacturing sector diversifies the economy and
creates opportunities in new markets. The Internet is far more than a tool for rich countries. By
dramatically increasing the access to information while decreasing the cost, the Internet has
vast potential to aid political participation, to increase peoples incomes, and to improve
healthcare.
Diffusion of Old Innovations. Participation in the network age requires diffusion of many old
innovations. Although leapfrogging is sometimes possible, technological advancement is a
cumulative process, and wide- spread diffusion of older innovations is necessary for adoption
of later innovations. Two indicators used here (telephones and electricity) are especially
important because they are needed to use newer technologies and are also pervasive inputs
to a multitude of human activities. Both indicators are expressed as logarithms. However, they
are capped at the average OECD level because they are important at the earlier stages of
technological advance but not at the most advanced stages. Thus, while it is important for
India to focus on diffusing electricity and telephones so that all its people can participate in the
technological revolution, Japan and Sweden have passed that stage. Expressing the measure
in logarithms ensures that, as the level increases, it contributes less to the index.
Human Skills. A critical mass of skills is indispensable to technological dynamism. Both
creators and users of new technology need skills. Todays technology requires adaptability
skills to master the constant flow of new innovation. The foundations of such ability are basic
education to develop cognitive skills and skills in science and mathematics. Cognitive skills are
hard to define and measure. There have been some limited attempts of cross-country
comparisons of skills, such as the International Adult Literacy Survey and the Trends in
Mathematics and Science Study. They are, however, very limited in their coverage, particularly
when it comes to developing countries. Instead, the mean years of schooling is used as a
proxy. This measure gives a good indication of the overall level of basic educational skills in
the population, notwithstanding the fact that education quality varies from country to country.
The second indicator used to gauge human skills is the enrolment in tertiary education in
science, mathematics and engineering. This measure gives an idea of the current effort in
developing advanced skills in science and mathematics. Every country needs this skill base to
be able to adapt and innovate new technologies. Although it would be desirable to include
indicators of vocational training, these data are not available.
IV. Concept of Technology Transfer
When a technology that was developed in an industrial society is put to work in a
different environment, we get the process that is called technology transfer. International

technology transfer can be defined broadly as (1) the spatial translation across national
boundaries of (2) any of the aggregate purposively designed or evolved ways and means for (3)
benefitting enhanced human manipulation of production and/or the satisfaction of human needs
and desires through (4) the rational organization of human instrumental control over the material
symbolic environment.
Technology transfer may not always involve the transfer of machinery or physical
equipment. Practical knowledge can also be transferred through training on how to effectively
manage technological processes and changes. This inclusive view of technology transfer is
adopted in this work.
Technology transfer entails much more than just sending some machinery and starting it
up. Indeed, the key to successful technology transfer is adapting the technology to its new
environment or adapting the environment to it. All the material and non-material elements of
culture, from language, habits and religion to tools and crafts, are open to unilateral transfer or
bilateral exchange. The procedure by which this transfer is brought about ranges from peaceful
exchange, trade and migration to espionage, war, and subjugation.

V. Process of Technology Transfer


Technology transfer process is explained with six phases; technology innovation,
technology confirmation, targeting technology consumers, technology marketing, technology
application, and technology evaluation. Each of the six phases is briefly described with
examples of key actions which demonstrate movement through the process and indicators of
transfer which serve to document progress. Actual key actions and indicators of transfer for the
six phases can take a multitude of forms, with phases at times overlapping. References are
provided for further study.
Phase One: Technology Innovation
In New Zealand research priorities are established by the combined wisdom of the
Foundation of Research, Science and Technology, the Ministry of Research, Science and
Technology, the Crown Research Institutes Board of Directors, and Committees on Science.
The technology transfer process begins when a scientist starts communicating ideas of how
science can be used to solve a problem or improve a situation in a research priority area. This
technology innovation phase is represented by the exchange of information which takes place
between the scientist, colleagues and administrators to advance ideas on the application of
science. New Zealand's most lucrative sciencific assets are the ideas within scientists' minds.
Therefore, any assistance which can be given to support other scientists in communicating their
theories will facilitate the technology transfer process.
Such assistance can take the form of encouragement for scientists to communicate
ideas with a diagram depicting how different factors (cell counts, hormone levels, chemicals,
etc.) interact within a research project. A diagram is the first step toward communicating and
refining ideas. The next step would be when the scientist starts discussing his or her theories
with colleagues. This activity may aid the scientist in further refinement of the theories and gains

suggestions for other possible commercial applications of the technology. In-house seminars
and group discussions should be actively organised and supported by all scientists to
encourage analysis and support or development of ideas.
After refining theories arising from the technology innovation, the scientist should submit
research proposals communicating the concept to the appropriate funding agency. Such
proposals should include plans as to how the research will in fact be applied. Scientists need to
be proactive in suggesting end uses for the technology they have created (Risdon, 1992).
Examples of Key Actions:
Idea of management practice or product innovation
Developing diagrams of technology innovation
Discussing theories with colleagues
Examples of Indicators of Transfer:
Display of technology diagrams.
Presentations communicating technology.
Research proposals advocating technology.

Phase Two: Technology Confirmation


The technology confirmation phase is represented by the scientist first conducting
research which provides data in support of the underlying theory about technology and then
communicating the results to colleagues, peers and administrators. Indicators documenting
progress could be in-house "Eureka" reports which communicate research success to
colleagues and administrators. For further information see, Bhattacharya, Glazer, and
Sappington (1992) and Hughes (1992) who have developed mathematical models balancing the
economic benefits versus the deficits of sharing research progress or results with colleagues
and competitors. Trotter and Risdon (1990) address the issue of morale benefits which accrue
from colleague interaction, establishing the close relationship between morale and productivity.
Indicators of transfer in this phase would be in-house reports, presentations and or publications
substantiating research success, which aids science liaison within the science community.
Examples of Key Actions
Conducting research on technology innovation
Discussing results with colleagues
Reporting to science organizations
Examples of Indicators of Transfer

Reports on research progress


Communication of results to peers
Documentation of results in science journals
Phase Three: Targeting Technology Consumers

During the third phase of the process decisions need to be made concerning who needs
and can potentially benefit from the technology. The people involved in the targeting technology
phase would be scientists and marketing personnel. These specialists need to be aware of
factors such as cost, convenience, etc. which influence users' acceptance of new technology or
factors which might serve to prevent the adoption of technology. A multitude of factors for socioeconomic considerations for targeting technology change have been encompassed in models
by Doherty (1990) and Knudson (1991). For further study, Swanson, Sands, and Peterson
(1990) conducted an international study analysing the influence different marketing systems had
on technology acceptance by potential users.
Indicators of transfer for this phase would be the interactions of science, business, and
marketing personnel to "brainstorm" technology acceptance considerations. Grundy and King
(1992) advocate the use of a strategic planning process to steer the decision-making operation.
Examples of Key Actions:
Deciding characteristics of potential consumers.
Targeting consumers with prescribed traits.
Estimating number of prospective users.
Examples of Indicators of Transfer:
Reports of research results to key business leaders.
Communication with potential consumers.
Negotiation of potential acceptance barriers.

Phase Four: Technology Marketing


The technology marketing phase of the process is concerned with disseminating the
technology beyond the research centre. Key actions for science liaison involve the talents of
scientists, business leaders and marketing specialists to educate potential consumers to the
social, economic and environmental benefits of the new technology. Echeverria and Elliott
(1990) suggest frequent interaction between research and marketing personnel; and the benefit
of establishing a demographic profile of anticipated consumers before organising
communication channels. Knowing where the potential client usually gains knowledge of
specialised products and or services will influence the selection of communication methods.

Kaimowitz, Snyder, and Engel (1989) counsel using a variety of communication channels to
stimulate public awareness and understanding of science or technology.
Examples of Key Actions:
Analysing demographic profile of anticipated consumers
Preparing information-educational materials
Transmitting information through mass media
Examples of Indicators of Transfer:
Organise and categorise market constituency
Production of educational materials
Contacts with a variety of communication channels

Phase Five: Technology Application


The technology application phase concerns the understanding of users or consumers
behaviour and establishing predictable steps to monitor the commercial application of
technology. The talents and skills of social and financial consultants, and marketing personnel
are required to identify consumers' behaviour and application patterns. Social, economic, and
environmental factors which influence the rate of adoption of new technology are discussed indepth by Arnon (1989). Chari and Hopenhayn (1991) have developed a mathematical model
which weights social and economic factors and their influence on the diffusion of technology
innovations. The ratio of the number of consumers applying the technology to the number of
potential consumers needs to be carefully monitored, to establish the market share reached.
Examples of Key Actions:
Identifying consumers' behaviour patterns.
Establishing application criteria.
Developing ways to monitor change and/or application.
Examples of Indicators of Transfer:
Document steps leading to adoption.
Monitor percentage of consumers changing.
Document changes, adoptions or applications.
Phase Six: Technology Evaluation
The sixth phase of the technology transfer process documents the success or lack of
success of the technology to be adopted. Key actions for the technology evaluation phase are to
establish assessment criteria for authenticating socio-economic and environmental benefits or

harm. Guidelines for evaluating different types of technology innovations are proposed by
Cummings (1990). Assessing technology transfer effectiveness generally requires specific
criteria which can provide a basis for measuring the extent to which key actions have been
attained. The method of defining specific criteria for indicators of transfer is essentially moving
from broad to specific actions. The stronger the indicator of transfer, the more useful the
indicator is for making decisions on present and future public good science funding. The
technology transfer process ends when the scientists reports the evaluation findings back to the
funding agency.
Examples of Key Actions:
Establishing socio-economic benefits
Establishing environmental benefits
Establishing evaluation criteria
Examples of Indicators of Transfer:
Document % of consumers satisfied with technology
Document benefits acquired from technology
Report evaluation results to funding source

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