An introduction to New

Product Development (NPD)

New products Development:

Open Innovation and
Technology Transfer

New Product Development- Open

Innovation and Technology Transfer
Learning Objectives
1.
2.
3.
4.
5.
6.
7.

Recognize the importance of the concept of technology/knowledge

transfer with respect to innovation management
Provide a summary of the process of technology/knowledge
transfer
Examine the various models of technology transfer
Assess the importance of internal organization factors and how
they affect inward technology transfer
Explain why a receptive environment is necessary for technology
transfer
Identify the different barriers to technology transfer
Recognize how tacit knowledge links technology transfer and
innovation

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Background
Overview
Paradigm shift from labor and capital intensive industries
to knowledge and technology
Internal development too uncertain, too expensive and
too slow for the rapid technological changes in the
market
Corporations trade in technology in world markets just
as they do in other goods and services (DFI
International, 1998:93)

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The Economic Perspective of

Technology Transfer

Can be transferred to

Existing R&D projects and

developed technology which
has already been paid for

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Industry and private

enterprise

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Open Innovation
Trend of shifting away from closed systems to
new mode of open systems involving a range of
players distributed up and down the supply chain
Strong linkage within the innovation process
between the external environment of the firm
and internal environment

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Technology Transfer
Technology transfer is the application of technology to a
new use or user. It is the process by which technology
developed from one purpose is employed either in a
different application or by a new user. The activity
principally involves the increased utilization of the existing
science/technology base in new areas of application as
opposed to its expansion by means of research and
development
(Langrish et al., 1982)

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Information Transfer and

Knowledge Transfer
Information is central to the operation of firms
Stimulus for knowledge, know-how, skills and
expertise
The application of these knowledge then leads
to actions and skills

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Models of Technology Transfer

Licensing Involves the technology owner receiving a license
fee in return for access to the technology
Science Park Model academic scientists will have the
opportunity to take laboratory ideas and develop them into real
product e.g. Silicon valley
Intermediary Agency Model act as the intermediary between
companies seeking and companies offering technology
Directory Model The produced directories of technology
available from the universitys own research laboratories e.g.
www.patentexplorer.com

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Models of Technology Transfer

Knowledge Transfer Partnership Model teaching company
scheme studies part time for 2 days a week and 3 days working on the
project
Ferret Model qualified scientists and engineers who would ferret
around for interesting defense technology that could have wider
commercial opportunities
Hiring Skilled Employees Hiring people with the necessary skills
and knowledge
Research Clubs Funded program which tries to bring companies
together with common interest in particular research area
Consultancy Consultants are able to offer help, advise and useful
contacts to get the research project to a flying start

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Limitations and Barriers to

Technology Transfer
The difficulty of applying other peoples
technology and the need for this technology to
be in such a form that organization can reap
some benefits
NIH Syndrome
Not Invented Here(NIH) syndrome
Tendency for project group of stable position to
believe that it possesses the monopoly of
knowledge in its field
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Internal Organizational Factors

and Inward Technology Transfer
Types of companies
Innovators: The first company to adopt a new
idea
Initiators: The firms that adopted the idea soon
after the innovators
Fabians: The firms who adopted the idea only
after its utility was widely acknowledged in the
industry
Drones: The last firms to adopt new ideas
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Internal Organizational Factors

and Inward Technology Transfer
Factors leading to technology transfer
High quality of incoming communications
A readiness to look outside the firm
A willingness to share knowledge
A willingness to take on new knowledge, to license and
to enter joint ventures
Effective internal communication and coordination
mechanism

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Internal Organizational Factors

and Inward Technology Transfer
Factors leading to technology transfer
An awareness of costs and profits in R&D departments
Identification of the outcomes of investment decisions
Good quality intermediate management
High status of science and technology on the board of
directors
High quality chief executives
High rate of expansion

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Conceptual Framework of
Technology Transfer
Activity

Process

Awareness

Describes the processes by which an organization scans for an

discovers what information on technology is available

Association

Describes the processes by which an organization recognizes

the value of technology(ideas) for the organization

Assimilation

Describes the processes by which the organization

communicates these ideas within the organization and creates
genuine business opportunities

Application

Describes the processes by which the organization applies this

technology for competitive advantage

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Identifying External Technology

The Importance of Scanning and Networking
Scanning and networking as an informal and unassigned
activity
Key characteristic of technically progressive firms is high
quality of their incoming information
For the purpose of maintaining order and knowledge
base
Each organization research activity represents a fraction
of the worlds total scientific and technological activity
Important to ensure they are aware of technology around

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Managing the Inward Transfer of

Technology
The final stage of application of the
business opportunity for competitive
advantage
Organization brings about commercial
benefits from the launch of a new product,
improved product or manufacturing
process

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Organization Context- Open

innovation and technology transfer
Acquisition of
technology from
outside

Level of Learning

Individual
Continual flow of
tacit and explicit
knowledge

Group

Organization

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Tutorial
1. Explain the importance of tacit knowledge
to the technology transfer process
2. Explain how a firms internal activities
affect its ability to acquire external
technology

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