Basic Features of Technology Transfer!

Website design By BotEap.comThe total input of technology in the underdeveloped countries comes from the advanced capitalist countries for obvious reasons, which will be the highlight of this discussion. Multinational corporations play a vital role in technology transfer, the motive being profit maximization for the parent company through its subsidiaries. These corporations act as the main technology transfer instrument, either through their subsidiaries or through contractual agreements made with developing countries. The idea is to bring in mechanized processes and equipment that are not available locally.

Website design By BotEap.comThe technology provider often takes the lead due to its monopoly strength arising from patent protection for differentiated products and processes. Very often, the terms and conditions of the transfer are arbitrarily established in very imperfect market conditions by multinational technology providers. Advanced nations have the advantages of reduced population density, an even distribution of national wealth, a high standard of living, more capital infusion into research and development, availability of qualified research-inclined personnel, etc. Developing nations, on the other hand, are subject to the pressures of high population density, unequal distribution of economic wealth (the poor get poorer and the rich get richer), moderate or low living standards, etc. Capital flight occurs due to heavy World Bank lending, leading to increased social overheads. In such a situation, it is almost impossible for a developing nation to inject capital into research related activities.

Website design By BotEap.comThe bargaining power of developing countries is weak, since they do not have access to information on alternative technologies and their sources, nor the necessary infrastructure to assess the adequacy of equipment, intermediates and processes. In addition, much of the influx of technology in developing countries responds to the policy of industrialization through import substitution. The transfer of technology from developed to underdeveloped countries is done in various ways. They are classified into two broad categories, viz. , direct mechanism and indirect mechanism. The direct mechanism includes the transfer of technology through banks, magazines, industrial fairs, technical cooperation, movement of qualified people, etc. Here is an option for the developing nation to select the appropriate technology that best suits their needs. However, this is not the main form of technology transfer that advanced nations would prefer.

Website design By BotEap.comThe indirect mechanism involves the transfer of technology in a “bundle” or a “bundle” containing equipment incorporating technology, industrial properties such as patents and trademarks, skills, share capital, etc. In this system, a local company negotiates with multinational corporations for the transportation of the required technology elements, and the terms and conditions are established through a commercial transaction process. Since the trading partners are unequal, the contract terms are invariably restrictive and the price offered for the technology is unreasonably high.

Website design By BotEap.comAll underdeveloped countries, which have chosen to grow along the classical path of capitalist development, are in a position to invite multinational corporations, if only for the diffusion of technology.