Definition, Uses & Importance of Technology Transfer Today
Technology transfer and commercialization is divided into three categories: involving the transfer of:
- Technology codified and embodied in tangible artifacts
- Process -or- processes for implementing technology
- knowledge and skills defining the basis for technology and process required for development
Why Transfer Technology?:
The majority of technology transfer occurs because the inventor/organization in which a technology originates is typically different from the organization that brings the technology to the marketplace. This process is generally referred technology commercialization (the introduction of a technology into the marketplace).
Depending on the technology; commercialization is carried out normally by a single firm (joint ventures are more prevalent when the commercialization requires combining multiple technologies to commercialize it). The inventor/organization that created the technology, develop it into a commercial product or process to sell to customers. In majority of cases, the organization that creates a technology does not bring it to the market. The typical reasons for this are as follows:
- The inventing organization is a company that does not have the resources needed to bring the technology to market, such as: distribution network, sales organization, financial capital and equipment for manufacturing the product (complementary assets).
- In some case the inventing organization may have these resources, but the technology is not a strategic product (good fit) for that firm as viewed by the marketplace. This is very often the case, when the technology was created as a byproduct of research with a different objective.
- The inventing organization is a government laboratory, restricted in general by law or policy (in the United States) from competing with the private sector by selling products or processes, limiting the technology introduction to marketplace by a private firm.
- In numerous cases the inventing organization is a university not having the resources or expertise to produce and market the products from that technology -or- if the technology was developed with funding from the federal government, U.S. law strongly encourages the university to transfer the technology to a private firm for commercialization.
Technology transfer is important from a business prospective because technology can be utilized as a resource for shared prosperity.
Resource, technology definition:
- Consists of a body of knowledge and know-how.
- Acts as a stimulant for healthy competitive international trade.
- Is linked with other business/organizations’ commercial needs
- Requires an effective plan for management and entrepreneurship from lab to market.
From a business perspective, companies engage in technology transfer for a number of reasons:
- Companies look to transfer technologies from other organizations because it may be cheaper, faster, and easier to develop products or processes based on a technology someone else has invented rather than to start from scratch. Transferring technology may also be necessary to avoid a patent infringement lawsuit, to make that technology available as an option for future technology development, or to acquire a technology that is necessary for successfully commercializing a technology the company already possesses.
- Companies look to transfer technologies to other organizations as a potential source of revenue, to create a new industry standard, or to partner with a firm that has the resources or complementary assets needed to commercialize the technology.
Technology transfer related to government laboratories and universities, their motivations are typically different:
- Governments or universities may transfer technology from outside organizations if it is needed to accomplish a specific goal or mission especially if that technology would add value to a technology the government or university is hoping to transfer out to a company.
- For reasons of economic development reasons (jobs creation and revenues for local firms), as an alternate source of funding, or to establish a relationship with a company that could have benefits in the future, government laboratories or universities typically transfer technologies to other organizations.
Technology transfer has also proved to be fertile ground for secondary markets. For example, company XYZ has created a cost effective water sterilization source. This business is important to numerous retail companies manufacturing consumer products that use water for home humidification, but lack the technical resources to develop this technology or the connections to engage more directly with technology transfer. Company XYZ is the intermediary that transfers the technology to the retail companies.