TECHNOLOGY GENERATION AND DEVELOPMENT

Technology strategy – It is defined as strategy to deal to technology

related issues at Micro and Macro levels with respect to Set Objectives
i.e. What technology to generate or develop and with what
intensification or aggression.

Strategy is opposite to tactics.

 Tactics implies action to deal with immediate specific problems

 Strategy implies long term, purposeful and interconnected efforts

Macro level – National and International levels i.e. broader aspects or

major issues

Micro level – Corporate or enterprise level –limited aspects or

organizational issues

TECHNOLOGY GENERATION

It is same as R&D but specifically refers to the ‘R’ of R&D. technology

generation involves R&D efforts while technology development
involves further stages of translating R&D efforts into marketable
products, processes and services. Broadly R&D process can be
considered to be consisting of four distinct stages as shown in Figure:

1. Need recognition/Knowledge Advances

2. Idea generation
3. Engineering
4. Marketing
Objectives of Corporate R&D & R&D projects

Corporate research and development is the principal corporate asset for

long term technological competitiveness. Corporate research activities
can be classified by the purpose of research:

a) To support current businesses

b) To provide new business ventures
c) To explore possible new technologies
R&D projects tend to go through the following stages:

a) Basic Research & Invention

b) Applied research and functional prototype
c) Engineering prototype and testing
d) Production prototype and pilot production
e) Product testing and modification
f) Initial production and sales

Stages a, b and c are usually called ‘Research’ while stages d to f are

called ‘development’.

The major purpose of research is to reduce the technical risk before

production. At each stage the cost escalates by order of magnitude of
over 1:10. Therefore technology generation & development is costlier
than basic R&D and hence all countries or all enterprises are not able to
pursue these activities at similar levels.

Corporate research is useful for:

 Extending product life cycle – through improvements in

production processes,
 lowering production costs,
 increasing market share,
 profit margins, etc.
Process of Technology Generation

Technology is generated in R&D organizations. The various inputs

required for generation of technologies are shown in figure. Goals,
Surroundings, criteria and resource allocation are some of the inputs to
R&D, to produce the output of technology.

The inputs in R&D organizations are generally the traditional inputs

such as Money, Materials, Manpower, Facilities, energy and
management. The intelligence-based inputs are science, knowledge,
skills, information and existing technologies.

The effectiveness of any R&D is determined in terms of the ‘Usefulness’

of the technologies it produces with respect to the overall objectives of
the corporation.

Besides these the technology generation involves many other aspects

such as:

 Monitoring and evaluation of R&D projects,

 Funding of R&D,
 Training & Development of resource personnel
 Interactions at all levels,
 Management policies and support,
 Availability of support structures and incentives at government
level,
 Timely collection and interpretation of technical and other
information, etc.

The most important aspect is the commitment of the top management for
research.
In Indian industry sector, it is observed that research personnel occupy
secondary place to finance, marketing and production personnel. They
are not given due importance in decision making at corporate level. The
R&D neglect is also visible in some organizations by transfer of
inexperienced personnel t R&D department.

Such management attitudes need to be changed in the overall interest of

the company.

Managing & Monitoring of R&D

Managing R&D requires special skills and covers issues ranging from
technical matters to management techniques and overall business
environment at national and international levels. Management of R&D
projects requires attention to the following factors:

 Performance – It is the measure of a product or process to

accomplish a specific function or application. The performance
parameters must be defined for an R&D project in order to
determine how successfully the goals of the project are attained.

 Timing – It is very important to the success of a project since lead-

time created from timely innovation provides a competitive
edge/advantage. Further, monitoring progress of a project can also
be watched by studying technical performance parameters against
time, cost and cumulative cost against time.

 Cost – This is very essential to its commercial success. The R&D

costs must be recovered as part of the investment costs in the new
product or processes.

 Personnel – It is very critical part of any R&D project since the

talents, creativity, dedication and problem solving ability of the
personnel are essential to the success of any project.
TECHNOLOGY DEVELOPMENT

It refers to the ‘D’ of R&D. The various determinants of technology

development and their inter-relationship is shown in figure. It starts from
R&D to technology diffusion and substitution. Natural resources are
mobilized and processed through the successive stages. The supply
factors include natural resources, human resources, fund allocation and
procured resources.

The demand side factors include market potential, venture capital and
enterprise profitability. The coordinating organizations, supporting
facilities and government policies and systems have a major role to play
in the success of the technology development process.

The various stages of technology development cycle starting from the

generation of ideas in the R&D deptt.. This is a tedious process and
requires the top management commitment as well as outside support.
Risk factor is large and the success rate depends upon the quality of
inputs provided to the R&D department.
Technology Development Approaches

1. In-house R&D – Technology development activities are generally

carried out through setting up of separate in-house R&D unit
within the organization, managed and headed by a well-qualified
and experienced chief/head directly reporting to the top
management. However this unit has to have very close
contact/interaction with other departments within the company. It
may even be like exchange of personnel among the different
departments. The strength and facilities in the inhouse R&D deptt.
would depend upon the technology policy of the company. And the
nature of the business. In large organizations, there are sometimes
R&D labs for each department and a central R&D lab for major
R&D projects. Industrial R&D is mostly product or process
oriented with specific objectives and time schedule and not basic
research. Incremental developmental efforts or import substitution
efforts are generally common in most of the industries in
developing countries including India, while emphasis is on new
technologies or new applications of technologies in advanced
countries.

2. Cooperative R&D – A group of companies in a particular

industrial sector promotes an R&D center as a society or a non-
profit making company. The expenses are met from the
contributions of the participating companies (as a fixed percentage
of their turnover) as well as grants from the govts. They undertake
research in the larger interest of the companies and sets up
expertise and facilities of common nature, which are usually
expensive. A company can also sponsor specific projects to this
center. This is more suitable for projects, which are not of secretive
nature, or first substantial part is done at the center and finer details
can be taken up at inhouse R&D to take care of competitiveness
aspects. E.g. National council of building materials (cement), New
Delhi and Textile Research center ate Ahmedabad, Apparel export
promotion council are examples of this kind of research.
3. Contract Research – A company may contract components of
technology development to suitable R&D organizations, academic
institutions or consultants or experts and its inhouse R&D unit may
coordinate the progress of the activities to develop the desired
technologies. This requires considerable internal technical and
managerial capabilities.

4. R&D collaboration – A company may collaborate with another

company in areas of common interest if costs of development are high.
Such inter-organizational collaborative R&D efforts are becoming
common in developed countries mainly due to high costs and shorter
technology life cycles in areas such as microelectronics, materials, IT,
bio technologies, etc. A firm may also collaborate with public or
private funded R&D organization on a case-to-case basis where R&D
results are shared mutually and so are the expenses. A company in
India may even collaborate with another company or R&D institution
abroad. The govt. of India encourages such collaboration. This is useful
if relative advantages are expected and will avoid large technology
payments in future.

5. Research Societies- Large corporations or industrial houses may set up

independent research societies in addition to their inhouse R&D units.
Suitable for broad interests of the promoting companies in line with
national interests. Govt. extends several concessions for such societies
and provides several tax concessions and fiscal incentives. E.g. cancer
drugs, AIDS vaccines, Bird-flu vaccines, MAIT, NASSCOM etc.
Centre for Science & Environment (Sunita Narain)

6. Research companies– Large corporations of technology innovative

entrepreneurs (technoprenuers) may promote research companies,
specifically for conducting research and development of technologies
for others on commercial basis. The development costs and reasonable
profits are recovered from the sale and transfer of technologies. This
concept is very common is US and other developed countries but is yet
to gain recognition in developing countries.
Research & Development Organizations

Techline Green Pvt. Ltd - Bangalore, Karnataka (India)

Offering turnkey services for water filteration, matter sepearation equipments, waste water filteration, waste water
recycling services, hazardous waste management, solid waste management for research and development
organisations.
View Catalog: http://www.indiamart.com/techlinegreen/
Send Trade Enquiry

Sri Raghavendra Biotechnologies Pvt.Ltd - Bangalore, Karnataka (India)

Research Centers from Bangalore offers clinical application and consultancy in biotechnology like biotechnology
academic project, student training program, short term workshop, stem cell based clinical application and consultancy
for stem cell laboratory.
View Catalog: http://www.indiamart.com/srbiotech/
Send Trade Enquiry

Genesis Management & Market Research (P) Ltd. - Pune, Maharashtra (India)
Engaged in providing market research services and market research for automobile, chemical & other industrial
products (demand potential, customer satisfaction, brand recall, brand loyalty, customer expectations and
preferences, marketing etc..
View Catalog: http://www.indiamart.com/globalresearch/
Send Trade Enquiry

Bioasset Technologies Pvt. Ltd., Thane - Thane, Maharashtra (India)

Offering biotechnology product development, biopharmaceutical product development, biopharmaceutical product
development services, biopharmaceutical services, biotechnology research project and biotechnology development
project.
View Catalog: http://www.bioasset.com/biopharmaceutical-technology.html
Send Trade Enquiry

Enviro Care India Private Limited, Coimbatore - Coimbatore, Tamil Nadu (India)
Engaged in offering development organizations including expert analysis validity analysis, data validity analysis,
pollution control system analysis, environmental laboratory analysis, chemical treatability studies and waste water
analysis.
View Catalog: http://www.indiamart.com/envirocare/
Send Trade Enquiry
Udyukta Clinsolutions (India) Private Limited - Coimbatore, Tamil Nadu (India)
Engaged in providing services that includes pharmaceutical research services, life science research services,
intellectual property research, abstract curation, knowledge processing services and data research.
View Catalog: http://www.indiamart.com/uclinsol/
Send Trade Enquiry

Genesis Management and Market Research Pvt Ltd. - Pune, Maharashtra (India)
Offering chemical product identification studies, consumer product research, educational research, internet surveys,
advertisement research, medical practitioners research, socioeconomic research and business management
solutions.
View Catalog: http://www.indiamart.com/genesismarketresearch/
Send Trade Enquiry

Mantraa Research & Consultants Private Limited - Pune, Maharashtra (India)

We are offering market research services, market research planning, sales promotion consultancy, finance
consultancy, branding services, employer branding, qualitative quantitative research, demand analysis and product
launching services.
View Catalog: http://www.indiamart.com/mantraaresearch/
Send Trade Enquiry

Essem High-Tech Private Limited - Gurgaon, Haryana (India)

Providing world class solutions to the hydrocarbon and production industry that includes geoscientific solutions, multi
transient electromagnetic, geophysics software solutions, geochemical consultancy services, engineering solutions
and bio-remediation.
View Catalog: http://www.indiamart.com/essemhightech/
Send Trade Enquiry

Qualisys - New Delhi, Delhi (India)

Providing brand marketing research services, brand development services, qualitative market research, ethnographic
studies, brand health studies and market research consultancy.
View Catalog: http://www.indiamart.com/qualisysindia/
Send Trade Enquiry

Pragati Surveyors Pvt Ltd - Pune, Maharashtra (India)

Engaged in offering research services, field research services, land research services, infrastructure developers,
quantitative research services and qualitative research services. Also offers topographical survey and railway
engineering survey.
View Catalog: http://www.indiamart.com/pragatisurvey/
Send Trade Enquiry
Hasetri - Kankroli, Rajasthan (India)
Institution & research center for elastomr and tyres providing contract research & decelopment services like
composition analysis of rubber compounds, polymer blend ratio (elastomer), polymer degradation kinetics, cyclisation
& degradation of polymer.
View Catalog: http://www.hasetri.com/
Send Trade Enquiry

Shriram Institute for Industrial Research - New Delhi, Delhi (India)

Providing research and development services for health care products, herbal products, food packaging materials,
allopathic medicines, ayurvedic medicines, homeopathic medicines, petroleum products and inorganic chemicals.
View Catalog: http://www.shriraminstitute.org/
Send Trade Enquiry

Indian Rubber Manufacturers Research Association - Thane, Maharashtra (India)

Involved in offering sponsored research projects, product development, compound development, specification
development, process development, process economization, vendor capability assessment and vendor capability
development.
View Catalog: http://www.indiamart.com/irmra/development-testing-services.html
Send Trade Enquiry

Market Research Bureau - New Delhi, Delhi (India)

Engaged in providing research services for industrial, agricultural, consumer goods market, international market,
advertising agencies and social. Also offers event management promotion services.
View Catalog: http://www.indiamart.com/mrb/research-consultancy-services.html
Send Trade Enquiry

Business Co-ordination House - New Delhi, Delhi (India)

A conduit for facilitation of co-ordination, collaboration of organizations, entrepreneurs, students of technical textiles
industry that provides a platform for continued correspondence between members of technical textile industry &
people at large.
View Catalog: http://www.bch.in/
Send Trade Enquiry

Pro BioLife Research - Pune, Maharashtra (India)

Engaged in providing services like business development services, bio-tech intelligence, bio-tech custom research,
bio-pharma newsletters, bio pharmaceutical research, marketing research and business data analysis.
View Catalog: http://www.indiamart.com/probioliferesearch/
Send Trade Enquiry
Libra Consultants, Delhi - New Delhi, Delhi (India)
Providing project development services like techno economic feasibility report, reviewing organizational structure,
socio-economic studies, SWOT analysis and searching organization for business.
View Catalog: http://www.indiamart.com/libraconsultants/
Send Trade Enquiry

S.R. Research Group - Delhi, Delhi (India)

Offering services such as behavioural studies, price sensitivity studies, focus group research, marketing research
services, customer feedback research, distribution network studies and product research studies.
View Catalog: http://www.indiamart.com/srresearchgroup/market-research-services.html
Send Trade Enquiry
 Scientific / Research Societies
* No. of Societies Listed- 16
Top of Form
 
   Aeronautical Society of India
  New Delhi, Delhi
 
   Astronautical Society of India
  Bangalore., Karnataka
 
   Astronautical Society of India - Student Chapter
  Bangalore., Karnataka
 
   Astronomical Society of India
  Hyderabad, Andhra Pardesh
 
   Chemical Research Society of India(CRSI)
  Bangalore, Karnataka
 
   First society listed as an example for reference
  Delhi, Delhi
 
   Ibn Sina Academy of Medieval Medicine & Sciences
  Aligarh, Uttar Pradesh
 
   Indian Association of Pathologists and Microbiologists (IAPM)
  AllOverIndia, Orissa
 
   Indian Society for Applied Behavioural Science (ISAB)
  New Delhi, Delhi
 
   Indian Society for Mitochondrial Research and Medicine
  Hyderabad, Andhra Pardesh
 
Scientific / Research Societies
* No. of Societies Listed- 16
Top of Form
 
   Aeronautical Society of India
  New Delhi, Delhi
  
   Astronautical Society of India
  Bangalore., Karnataka
 
   Astronautical Society of India - Student Chapter
  Bangalore., Karnataka
 
   Astronomical Society of India
  Hyderabad, Andhra Pardesh
 
   Chemical Research Society of India(CRSI)
  Bangalore, Karnataka
 
   First society listed as an example for reference
  Delhi, Delhi
 
   Ibn Sina Academy of Medieval Medicine & Sciences
  Aligarh, Uttar Pradesh
 
   Indian Association of Pathologists and Microbiologists (IAPM)
  AllOverIndia, Orissa
 
   Indian Society for Applied Behavioural Science (ISAB)
  New Delhi, Delhi
 
   Indian Society for Mitochondrial Research and Medicine
  Hyderabad, Andhra Pardesh
 

R&D in India

Indian BMD shield could be in service by 2011

By Rahul Bedi

17 March 2009

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A third successful test-firing of India's new ballistic missile defence (BMD) system in early March has given Defence
Research and Development Organisation (DRDO) officials the confidence to claim that the system will offer an initial
operating capability by 2011.

They told Jane's that the BMD system would be declared operational after six more test-firings, including an
integrated trial in which two interceptors will be launched at an incoming ballistic missile: one to destroy it at an
altitude of 40 km and the other to annihilate falling debris at a height of 15 km. Integrated trials will take place by the
end of this year, with the remaining tests completed 12 months later, the DRDO declared.

Thereafter, it will be the government's decision to induct the system as a deterrent against incoming, short-range
ballistic missiles over a 200 km2 area, DRDO's chief missile scientist Dr Vijay Kumar Saraswat stated.

Dr Saraswat said that during the latest trial on 6 March, a modified Prithvi Air Defence II (PAD II) two-stage
hypersonic interceptor ballistic missile, fired from a mobile launcher at the integrated range on Wheeler Island, had
intercepted and shot down a target missile at a height of 75 km within three minutes of being fired.

The incoming target, a nuclear-capable Dhanush (Bow) navalised version of the surface-to-surface Prithvi (Earth),
was fired from a warship in the Bay of Bengal simulating the trajectory of neighbouring nuclear rival Pakistan's
strategic Ghauri missile with a 1,500 km strike.

Other organizations……

NATIONAL INSTITUTE OF RURAL DEVELOPMENT

NIRD is India's apex body for undertaking training, research, action research and consultancy functions in
the rural development sector. It works as an autonomous organisation supported by the Ministry of Rural
Areas and Employment, Government of India.

Research themes:

 Natural resource management

 Sustainable Development
 Support systems institutions and structures for development
 Human Development, which includes: Women & Development, Social Development, Economic
Development

INSTITUTE OF SOCIAL AND ECONOMIC CHANGE

The Institute of Social and Economic Change was established over two decades ago to promote inter-
disciplinary research in South India. This includes both self-initiated research as well as commission
research studies for the Central and State Government, other universities and organisations.

The faculty is structured into units covering: Economics, Rural Economics, Ecology, Quantitative Analysis,
Sociology, Education, Development Administration, Agriculture Development and Rural Transformation,
Population Research Centre and the Research Bank of India Unit

ISEC receives grants from the Government of Karnataka as well as from the Ministry for Human
Resources Development through the Indian Council for Social Science Research.

National Council of Applied Economic Research (NCAER)

ICRIER 

ICAR

Automotive research association of India

TIFR

BARC

DRDO

DRDL

R& D Consultants

MindTree

KPMG

CRISIL

IDC

Gartner
Purpose
Kitami Institute of Technology has always engaged in various forms of cooperative research and
exchange with industry. As a means of planning and promoting of even more comprehensive
cooperative research, the Cooperative Research Center was established in 1992.

Business
Everything related to;

1. joint or commissioned research with the private sector.

2. practice, cooperation and help of high technology education for technician of the private
sector.
3. scientific and technical consultation.
4. accomplishing the purpose of CRC, such as holding special lecture meetings, workshops,
symposium and such other activities as appropriate.

("The private sector" means private companies, local governments, quasi-governmental special
juridical bodies, non-profit organizations etc., excluding national organizations, private
individual researchers etc.)
Organization

Category of Joint Research

Joint research is classified into three types according to its scale.
Type A:
The private sector dispatches cooperative researcher(s) and pays more than two million yen for
the joint research. National university also pays a part of the research expenes.
Type B:
The private sector dispatches cooperative researcher(s) and pays the contracted amount of money
for the joint research.
Type C:
The private sector dispatches cooperative researcher(s) for the joint research.

The private sector pays 420,000 yen in order to dispatch each cooperative researcher in all types
of joint research.
Procedures to start Joint Project
 Participant Focus   What is Biomedical
ANSTO - Australia's Nuclear Research Agency Imaging?
is a key participant in... MORE From CRC BID's
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 TECHNOLOGY TRANSFER

Technology once developed can be used by its developer or owner or can be

transferred to another user immediately or sometimes at any stage till maturity –
dictated by commercial factors.

Generally newer technologies are transferred among the developed countries while
matured or nearly matured technologies are transferred from developed to
developing countries at the organizational level.

Primarily there are two ways of acquiring new technology –

Develop it or Purchase it.

Purchase – This way of acquiring new technology is commonly called –

technology transfer.

Reasons for Purchase of technology –

a) It involves little or no R&D investment

b) Technology can be used quickly
c) Technical and financial risks are often quite low

Reasons for selling of technology –

a) Increasing return on R&D Investments

b) Technology may not have immediate use
c) Technology has already been utiised upto its limit

So technology transfer occurs because of the existence of Buyers and Sellers. In

the technology transfer process,

 Sellers are also known as Transferers or Licensors

 Buyers are also known as Transferees or Licensees

Transfer - Defined as acquiring through purchase and use of technology.

Technology transfer – It is the acquisition and use of knowledge. There is no

transfer of technology unless & until the technical knowledge is put to use.
Technology transfer is not restricted only to scientific or engg. Items. The
manufacturing, marketing, distribution and customer services are among the
factors that are included in technology transfer.

As we know - Technology is embodied in various forms such as Physical

equipments, machinery, products, human capital (engineers and managers),
product design documents, etc. Different forms of technology may lead to different
channels for Technology transfer.

Technology Transfer – Defined

Technology Transfer is the use of knowledge to serve a purpose other

than the one for which R&D was undertaken. - U.S.Congress

Technology Transfer is a global concept to encompass any transfer of a

technology from the environment in which it was generated for original
use to another and usually unintended, secondary environment for
subsequent application. – Kottenstette & Freeman

TT is where scientific or technological information generated or used in

one context is implemented in a different context. – Bar Zakay

TT means the use of knowledge – Magavero & Shane

In short – technology transfer means bringing innovation to market or

put knowledge generated at some source to practical applications.
Assumptions: In all the definitions above, it is assumed that there is
existence of some source of technology comprising of all including
specialized skill, which transfer the technology to target group of
receivers who do not possess these specialized skills and who therefore
cannot create the technology themselves.

International Technology Transfer

Proprietary technology employed beyond national boundaries on

voluntary basis. So these do not include/cover technologies, which are
marketed among companies within the country, or technologies publicly
available free of cost or involuntary forms like ‘espionage’ and ‘patent
infringement’ e.g. nuclear technology stolen by many countries.

The International Technology Transfer in general implies:

a) Geographical Movement of Technology – Movement or use of
technology (knowledge) across national boundaries generally from
relatively more industrialized to less industrialized countries.
b) Legal Activity/Transaction – Involves contract between supplier
and recipient of technology with terms and conditions agreed upon
in advance.
c) Education – implies transfer of capabilities, which means training
of local people to use the technology.
d) Process – Continuing relationship between the supplier and the
recipient.

Need for Technology Transfer

Technology is a key factor for economic growth therefore developing
countries seeks technological capabilities from developed countries to
improve processes to satisfy human needs.

Other reasons for the need realization are:

 Lower level of technology knowledge
 Limited financial resources
  Limited infrastructure for R&D

It is impractical for developing countries to generate and develop technology of

their own. So under the circumstances, the solution lies in obtaining suitable
technology from developed countries to build on them further. It is the hope of
absorbing the technology and gains from it that motivates technology transfer.

Technology Transfer Modes

Based on the transferor’s role in the application of technology to the solution of the
user’s problem, there are two modes:

 Passive
 Active

Passive

If the transferring mechanism presents the technology to the potential user without
assisting the user in its application in the form of report or oral presentation then
Technology transfer is called Passive. Major source is Published literature.

The dissemination mode is without any assistance to users for application of

technology. e.g. Recipes, guides, repair manuals, self teaching manuals, how to do
guides, yoga books, etc.

There is no direct communication or assistance from the originator of technology

to the producer of finished consumer item. Yet thousands of products are
consumed from this form of knowledge transfer.

Active

Carries the process through to an actual demonstration of the technology

application. E.g. TV program of cooking

Steps involved in the construction of the model or a product from procurement of

raw materials to the fabrication and assembly. Here the consultant or Technology
transfer agent is fully involved and acts as a bridge in technology transfer from
technology source to entrepreneur or implementing agency.
Semi-Active Mode

Here the role of Technology transfer agent is somewhat limited or narrow. He self
educates and helps as technology expert in screening the available or relevant
information for product development. e.g. which software/hardware to buy or
specs to go for.
So transfer agent role is only that of an interpreter or communicator.

Horizontal & Vertical Technology Transfer

Horizontal Technology Transfer is technology transfer where one firm transfer

technology to another e.g. firms located in different or similar countries mainly due
to reasons of competition and used for matured or near matured technologies.

Vertical Technology Transfer – Transfer of technology from an R&D organization

to a firm. Such transfers are mostly within the country and technologies are new.

Require further efforts in terms of establishing commercial viability – Risky.

Typical Routes based on terms and Conditions of Transfer

Actually TT is accomplished and based upon mutual agreement between the

technology supplier and recipient. They enter into a written contract to confirm the
terms and conditions already agreed upon. Based on this the various routes of TT
are:

 FDI – Traditionally flow of technology to developing countries has been an

integral part of FDI. MNC’s who possess advanced technologies invests in
the developing countries in the form of wholly owned subsidiaries and
affiliates. This investment involves TT as on integral part. It is Limited
Transfer of Technology from the parent company.

 Turnkey projects – In the early stages of technology, enterprises enter into

turnkey projects from either owner of technology or main supplier of
machine or engg. Organizations.

 Licensing Agreements – Transfer of manufacturing or process technology in

the form of patents rights or supply of know how.
 Overseas Joint Ventures – With increasing concerns of developing countries
for total cost of foreign investments in the form of wholly owned
subsidiaries, foreign equity is limited with local partners holding majority
ownership and control. Foreign investors participates in equity capital on a
minority basis.

 Direct Supply of machines and equipments – Machines and equipment

embodies the needed technologies under direct purchase and sales.

 Training of Personnel Abroad – Establishment of specialized institutes and

extension services help diffusion of technology obtained from abroad, by
imparting training to personnel abroad.
Joint Ventures Abroad

Over the last more than fifty years of planned development, Indian
Industry has matured in technology and manpower skills, expertise and
experience and has been successful in diversifying its activities overseas
through establishment of collaborative projects. Such projects are
commonly known as Indian Joint Ventures Abroad or IJVA.

Joint venture means a foreign concern formed, registered or incorporated

in accordance with the laws and regulations of the host country in which
the Indian party makes a direct investment, whether such investment
amounts to majority or minority share holding.

The investment may, besides cash remittance, be contributed either in

full or part of:

a) Indian Plant & machinery, equipments and components supplied to

the foreign concern
b) The proceeds of goods exported by Indian party to the foreign
concern and
c) Fees, royalties, commissions or other entitlements from the foreign
concerns for the supply of technical know-how, consultancy,
managerial or other services.

Reasons for Joint Ventures Abroad

 Sharing of experience in the fields where adequate capabilities have

been developed in the host country.
 Setting up of enterprises of a comparatively small or medium size in
industries in which MNCs have not shown interest i.e. less focused
areas
 Expansion of capacity utilization and domestic regulatory policies
 Constraints on home market growth
 Diversification of business and Risks
 Using the ventures for promoting exports
Joint ventures could be:

 Equity Joint Ventures - new corporate entity in which each partner

owns a given share of equity capital or redistribution of shares of
an existing company.

 Contractual Joint ventures – no establishment of jointly owned

new company nor redistribution of shares among themselves of an
existing corporation. Only contractual or legal arrangement.

Joint Venture companies are the most preferred form of corporate

entities for Doing Business in India. There are no separate laws for joint
ventures in India. The companies incorporated in India, even with up to
100% foreign equity, are treated the same as domestic companies. A
Joint Venture may be any of the business entities available in India.

A typical Joint Venture is where:

1. Two parties, (individuals or companies), incorporate a company in

India. Business of one party is transferred to the company and as
consideration for such transfer, shares are issued by the company
and subscribed by that party. The other party subscribes for the
shares in cash.
2. The above two parties subscribe to the shares of the joint venture
company in agreed proportion, in cash, and start a new business.

3. Promoter shareholder of an existing Indian company and a third

party, who/which may be individual/company, one of them non-
resident or both residents, collaborate to jointly carry on the
business of that company and its shares are taken by the said third
party through payment in cash.
Foreign companies are also free to open branch offices in India.
However, a branch of a foreign company attracts a higher rate of tax
than a subsidiary or a joint venture company. The liability of the parent
company is also greater in case of a branch office.

Joint ventures have been perceived as a part of India’s overall strategy to

participate actively in the development process of the third world.

Areas Where India Offers Technology

 Automobiles, Scooters, Mopeds

 Bicycles and components
 Tractors
 Electrical and Electronic Equipments
 Cement & Asbestos Products
 Glass, Sugar, Plastic & Plastic Products
 Soap, Cosmetics and Toilet items
 Textiles
 Power & Energy
 Pharmaceuticals
 Construction, etc.

Some of the companies having JVs:

Ashok Leyland, Scooters India Ltd, Baja, Shriram Pistons, Kirloskar,

Delton Cables, ECIL, Lupin Lab, JK Synthetics, L&T, ACC, Godrej,
Tata Oils, century rayon, ICICI, PNB, ITDC, DLF, MGF, etc.
Elements of Technology Package

 Product Design – Technical Design

 Production Techniques – Plant layouts, flow charts, formula,

operations, material specs, etc.

 Management Systems – technical, financial, marketing, QC,

Testing, Material procurement, Inventory control, Equipment
maintenance, Machine loading, Scheduling, etc.

These are supported by Know how in terms of :

 General knowledge common to industry

 System specific knowledge – information & Industrial capabilities
 Firm Specific knowledge – overall organizational not specific to a
product.

These are available either in the form of written material, on the job
training or technical assistance.
Pricing of Technology

In most licensing situations, payments have to be made by the licensee

to the licensor. Payment represents the compensation to the licensor for
allowing the use of industrial property rights or IPR by the licensee.

The process by which this return is determines and agreed upon to by the
licensor and the licensee is crucial to the licensing process.

Pricing is not always amenable to the application of scientific rules,

since licensing negotiations are subject to human factors, supply and
demand conditions in the market and bargaining power of both the
partners and the extent of support available to both the buyer and seller.

Categories of Payments

1. Lump sum Payment – calculated in advance but agreed sum may

be paid in installments. This is suitable where technology is
obtained by outright purchase. This serves as surety in case
licensee defaults on royalties, delays in business operations, fails to
go into operations after receiving know-how, undergoes
liquidation. So this category of payment serves to reduce the risks
of surrendering valuable technology.

2. Royalties – Payments are made for use of all forms of industrial

property rights. The ownership rights of technology are established
by patents, trademarks, trade secrets, copyrights, etc. This is like
lease payment for some period and not an outright
purchase/payment. Generally paid as % of sales value or gross
value of production.

3. Fees – for the technology may include training, either at licensee or

licensor place of work, the position for technical experts required
to introduce technology and fee for expert assistance in the setting
up of associated R&D, design and engg. services.