Transfer process from indian publicly management essay

This is to certify that the thesis entitled “Modeling Indigenous Technology Transfer Process from Indian Publicly Funded R & D Institutions to Industry” submitted to the Osmania University for the award of the degree of Doctor Of Philosophy in Business Management is a bonafide research work carried out by Shri H. Purushotham under my supervision and guidanceHyderabad:Date: PROF. CH. SHYAM SUNDER

SUPERVISOR

DECLARATION

The work embodied in this thesis entitled “Modeling Indigenous Technology Transfer Process from Indian Publicly Funded R & D Institutions to Industry” represents original research work carried out by me in the University College of Commerce and Business Management, Osmania University, Hyderabad and has not been submitted for any other degree of this or any other University.Hyderabad:Date:

H. PURUSHOTHAM

Research Scholar

CHAPTER 1: INTRODUCTION

1.1 Introduction

The importance of technology transfer for the well being of national economy, inter alia, international competitiveness, corporate profitability and growth has been well established and documented. A pioneering study by Solow [1957] showed that in the period 1909-1949, in the USA, about 90% of the increase of per capita output in the non-farming sector was attributed to technological change. The importance of technology transfer in the current era has also been brought out very explicitly my many scholars, viz, [Jospin 1997,Seong 1997,Kumar 2002].Technology transfer is the mechanism by which societies try to ensure that publicly funded research discoveries are transferred to companies so that they can be developed and commercialized as products that benefit the public. Technology transfer (TT) from the publicly funded research institutions (primarily government laboratories and universities), to industry, has emerged as an important development activity in developed and developing countries in the world [Tran 2009] .Governments are increasing their funding for Research & Development (R&D) activity with an objective of developing and transferring innovative technologies to industry, which will improve and enhance the country’s national competitiveness, economic growth and employment opportunities to the citizens.The transfer of technology to industry is however, a lengthy, complex and dynamic process, whose success is influenced by various factors originating from many different sources [Kumar et al, 1999, Sundararajan et al 1999, Purushotham 2012] . Literature review shows that there are very few empirical studies on TT, which have simultaneously examined the impact of all critical TT factors on successful technology transfer in a single model [Sazali et al 2009] either in developed country or developing country context. Thus, it is proposed in this study to identify the influencing factors through content analysis and their impact on successful technology transfer from publicly funded R&D institutions to industry in India simultaneously in a single holistic model.

1.2 Definition of Technology Transfer

Theoreticians and practitioners define the concepts of technology transfer in many different ways. The review of literature shows that the literature lacks consensus on the definition of terms used in the technology transfer, the measurement tools used, and the roles of stakeholders. In the absence of solid foundation of literature, the term technology transfer has become synonymous with wide range of activities. There are many different ways to define the term TT including: the movement of technology from one place to another; from one organization to another; from a national laboratory /university to an organization; from one country to another [Solo and Rogers, 1972]. Some of the definitions relevant to the context of this study are cited below.Technology is information that is put into use in order to accomplish some task [Eveland, 1986]. Transfer is the movement of technology via some communication channel from one organization to another. A technological innovation is an idea, practice or object that is perceived as new by an individual or some other unit [Rogers, 1995]. Therefore, technology transfer (TT) is the application of information (a technological innovation) into use [Gibson and Rogers, 1994].UNCTAD [1979] defined TT as the transfer of systematic knowledge for the manufacture of a product, for the application of a process, or for the rendering of a service. Chacko [1986] describes TT in a scientific manner as converting physical/mental matter/energy into directly usable alternate form(s) and transfer means from one pocket into another pocket. Williams and Gibson [1990] defined TT as the shared responsibility between the source and the destination by ensuring that technology is accepted (or at least understood) by someone with the knowledge and resources to apply and/or use the technology. Additionally, Stewart and Nihei [1987] explain that technology refers to new and better ways of achieving economic ends that contribute to economic development. Hussain [1988] classifies the term technology as the knowledge or skill required to do something that satisfies human wants or which is useful; in other words, the term refers to information and know-how. TT can be described as a lengthy, complex and dynamic process, whose success is influenced by various factors originating from many different sources [Kumar et al.1999].

1.3 Definition of Successful Technology Transfer

The terms, technology transfer, knowledge transfer, technology commercialization, commercialization of R&D results, technology innovation, technology valorization, technology diffusion etc are all used synonymously and inter changeably in the technology transfer literature, as the activities covered and ultimate goal of all these definitions is one and the same [Dorf, 1987, Onyenekenwa Cyprian En eh, 2010, Li et al 2012].A technological innovation or technology is said to be fully and successfully transferred when it is commercialized into a product or service that is sold in the marketplace.[ Li et al 2012]. So technology transfer is a special type of communication process.

1.4 Horizontal or Lateral Vs Vertical Technology Transfer

Transfer of technology may take the form of either horizontal or lateral transfer, [Ramanathan1994] where in the technology being used at one place is applied as it is at a different location (mostly proven international technology transfers between company-company, or country-country, through FDI/Joint Ventures/Licensing) or vertical transfer represents a flow from laboratory research through developmental stages and ultimately to commercialization, where in the research & development carried out in the laboratory is put to use and brought into the economic mainstream(Lab to land or mind to market, mostly unproven, high risk, long lead time). The present study deals only with the vertical technology transfer.

1.5 Technology Transfer/Licensing Agreements

Technology transfer generally takes place through (a) licenses or assignments of pre-existing technologies; mainly for technologies developed and transferred under technology push mode and the IPRs are fully with the PRI (b) collaborative or sponsored research agreements to develop new information or technologies, mainly for technologies developed and transferred under market pull mode, under which the IPRs generated could be owned jointly or by the sponsored organization. Taken together, these methods constitute the technology transfer “system” between publicly supported research institutions and industry.A contract for technology transfer can either be a license agreement or a know-how agreement. The license agreement normally refers to the licensing of intellectual property rights such as patents, trademarks, copyrights, etc. There are number of possible licensing agreements: non exclusive, co-exclusive, exclusive, exclusive in a particular field of use or geographic region, and various combinations of these. Whereas a know-how agreement involves, the transfer of information or skills which have not received statutory recognition. This distinction has an impact on the confidentiality and secrecy aspects of the contract. Any technology transfer contract broadly deals with the mode of transfer of technology, its use under certain terms and conditions.The sale and purchase of the exclusive rights to a patented technology or of the permission to use a given technology or know-how, takes place through legal relationships between the owner of the exclusive rights or the supplier of the know-how, called the “transferor”, and the person or legal entity which acquires those rights or that permission or receives that know-how, called the “transferee.” The legal relationship between transferor and transferee is essentially contractual in nature, which means that the transferor of the technology consents to transfer and the transferee consents to acquire the rights, the permission or the know-how in question for a financial consideration. The present study covers both licensing and know-how agreements for transfer of technologies. A list of general Clauses in TT agreement are shown in Appendix.1

1.6 Global Trends in R&D and Technology Transfer Research

Global investments in science, technology and innovation are estimated at $ 1.2 trillion as of 2009. India’s R&D investment is less than 2.5% of the global investments. India’s R&D current investment has been under 1% of GDP and aims to reach 2% of GDP by 2017 [STI Policy of Government of India, 2013]. The developed countries however spend about 2.3% and developing countries about 0.9% of their GDP respectively.The online search carried out using the most popular online database, i.e. ISI Web of Science using a key word “technology transfer” for the period 1965-2012 show that there were about 2625 research papers published in the major journals with citation references across fifty-six scientific disciplines. Fig. 1 displays the science citation index (SCI) articles s of top 10 countries in the world in the area of technology transfer, which includes “technology transfer” in their titles

Fig. 1 Technology Transfer Publications of Top Ten Countries

during the last 45 years. The analysis of these publications reveals that the USA is number one in technology transfer research with 891 papers, followed by UK with 153 papers. Other leading countries in technology transfer research in the increasing order include China, Canada, Germany, Australia, India, France, Italy, and Japan. Fig. 2 shows the top ten countries in the technology transfer research. Although India ranked 7th position in top ten countries, its technology transfer publications in SCI journals share is very meager (1.5%). More details and analysis is presented in Chapter 2.

1.7 The Landscape of Publicly Funded Research Institutions (PRIs) in India

The integrated network of public funded research institutions in India is vast, impressive, comprising universities, research laboratories and various other autonomous organizations. They are the pillars of public-funded research in India. The network of public funded institutions in India is shown in Fig.2.

Network of PRIs in India

MHRDMS&TMH&FWICMRMoAICARState Govt. Universities & Labs.University Education Central UniversitiesTechnical EducationIITs, IITs, NITsScience EducationIISc, IISERsDoSISRODSTDSIRCSIRDAEAutonomous Research OrganizationsDBT

Fig. 2 Network of Public Funded Research Institutes in India

1.8 Major Public Funded Research Laboratories and Institutions

As per the “Directory of R&D Institutions 2010”, published by the Ministry of Science and Technology, there are 12 major government scientific agencies in the country, viz. Defence Research Development Organization (DRDO) with over 53 laboratories, Department of Space (DOS) with around 15 laboratories, Indian Council of Agricultural Research (ICAR) with over 94 laboratories, Department of Atomic Energy (DAE) with around 11 laboratories, Department of Scientific & Industrial Research including Council of Scientific & Industrial Research (CSIR) with 39 laboratories, Ministry of Environment & Forests with 27 institutions, Department of Science and Technology (DST) with around 22 scientific institutions, Department of Biotechnology (DBT) with around 8 laboratories, Indian Council of Medical Research (ICMR) with over 25 laboratories, Department of Ocean Development (DOD), Department of Information Technology with 20 institutions and Ministry of New and Renewable Energy (MNRE) with 3 laboratories. In addition to the R&D laboratories and establishments as mentioned above, there exists 302 universities/deemed universities, 15 institutions of national importance (IISC, IITs, IIITs and NITs, IISERs under the MHRD) offering higher education in the country. India has one of the largest stocks of scientists, engineers and technical personnel in the world to undertake teaching and cutting edge research in basic science disciplines like physics, chemistry, mathematics and several engineering disciplines.

1.9 Public Funded R&D in India – Expenditure and Outcomes

The public funded R&D is the key driver in the national innovation system and an important source of knowledge for firms and can contribute to a broader range of economic growth and benefits. India’s R&D expenditure as a percentage of GNP in 2005-06 stood at 0.89% and it is aimed reach 2% by end of XIIth Plan period, i.e. 2012-2017. A quick international comparison reveals that developed countries on an average spends over 2% of their GDP on R&D, a cut above India’s spending. China spends about 1.45% of its GDP on R&D, again ahead of India. However, another emerging economy, Brazil, is somewhat close to India with 0.82% of GDP being spent on R&D. Israel spends 6%, Switzerland and Sweden spends 4% of their GDP on R&D, respectively. In 2005-06, the government incurred 74.1% of total R&D expenditure with the remaining 25.9% being accounted for by the private sector. Of the total government expenditure, the central government accounts for the lion’s share (57.5% of total R&D expenditure). The bulk (86%) of central government expenditure on R&D gets distributed among the major scientific agencies listed in the previous section, namely CSIR, DRDO, DAE, DBT, DST, DOS,MOES, ICAR, ICMR, MCIT etc. DRDO gets the highest share (about 34.4). Private sector industrial R&D expenditure was primarily concentrated in drugs and pharmaceuticals followed by transportation. Though there are several outcomes of public funded R&D, the major outcomes are research publications, IPRs/patents, human resource development, consultancy to industry and technology development & transfer.

1.10 Technology Transfer in the Indian Public Research System

Technology transfer or commercialization in the public research systems is in a nascent stage in India and not a major mission of PRIs as there is no law or Act for technology transfer [Prabhu Ram 2008]. However, R&D being viewed as a business worldwide, it becomes imperative that the R&D outcomes are carried forward to industry into commercial production. While many of the national laboratories have set up their own business development groups for technology transfer to industry, certain specialized agencies have also been set up by the government to facilitate technology transfer to industry. One such major agency is National Research Development Corporation (NRDC), a public sector enterprise, works in close conjunction with over 200 national R&D laboratories reported to have transferred about 283 technologies in XI Plan period, i.e. 2007-2012 [ DSIR XIIth Plan document, 2012]. With its vast infrastructure and proactive policies India can adopt creating a high technology clusters like the Silicon Valley around Stanford University and the Route 128 around MIT around some of the most matured public funded research institutions and universities for taking the R&D outputs to the market place.

1.11 Indian Industrial Scenario

As per Ministry of Corporate Affairs 2010-11 Annual Report there are 8,72,740 companies limited by shares were at work in the country as on 31.12.2010. These comprised 8, 71, 125 Non-Government companies and 1,615 Government companies. Out of 8,72,740 companies limited by shares at work, 81,926 companies were public limited and 7, 90, 814 were private limited companies. The five major states having large number of companies are Maharashtra (21%), Delhi (20%), West Bengal (12%), Tamilnadu (8%) and Andhra Pradesh (7%). There are about 26 million Micro Small and Medium Enterprises in the country and more than 94 % of them are unregistered. MSME contributes 8% of the country’s GDP, 45% of the manufactured output and 40% 0f exports. This sector employ about 65.9 million persons and produces over 6000 products ranging from traditional to high tech items. All these industrial outputs substantially contribute to the Indian GDP. According to Economic Survey 2011-12, the industry’s contribution to GDP is 27%, services 59% and agriculture 14% respectively. While the corporate sector is more or less equipped to meet its technology demands, it is the SME sector that needs hand holding for technology development and transfer [Agarwal, 2006].

1.12 Barriers to Laboratory Technology Transfer

Many times, the transfer of the technology developed at the public funded R&D laboratory to the market place is more challenging than the development of the technology itself. Apart from the scalability and cost effectiveness of the process/technology to enable large scale production, it is important to ensure that sufficient market (new or replacement) is available for the resulting product. Even if sufficient market is existing to be tapped, marketing skills largely determine the actual market size for the product and its success.Difficulties/challenges of technology transfer can be discussed at two levels. One is at the laboratory or transferor level and the other is at the technology receiver’s or the industry level. The obstacles to the transfer vary with the nature of the technology and the technical capabilities of the receiver. Based on the literature review [Purushotham H, 2012], the key issues and problems encountered while transferring technologies from public funded laboratories, are summarized below:Most of the technologies developed by public funded research institutions are at laboratory or bench scale, and not matured enough for commercial exploitation. Due to the lack of adequate financial and infrastructure capabilities, the laboratory/bench scale technologies are not further up-scaled to pilot scale or proto typed and are not close to commercial scale for field testing, before they can be transferred for commercialization. Commercializing such technologies is risky.Government R&D labs often lack a marketing orientation in transferring a technology to an end-user. They also often lack the capabilities and/or resources to conduct market research/survey to establish the feasibility of technology in hand, estimate the global demand supply gap, market size, competition, customers, evaluation of new technologies, understanding IPRs position, regulations, and standards etc for the technology/products, they propose to commercialize [Purushotham. H, 2011]. Business plans made based on laboratory scale processes, and unrealistic assumptions are bound to fail.Many laboratories do not have in house capabilities to prepare the complete technology transfer documentation such as process know-how, basic design engineering, techno-economic feasibility report and detailed project report for a commercial plant etc.Laboratories are bound by many administrative procedures and too much bureaucracy resulting in delays and cost overruns.There are little incentives for the staff involved in transfer of technologies and no regulations or legal frame work existing for technology transfer.Inadequacy in pre-and post technology transfer support services and performance guarantee on the transferred technology to the industry partner.Lack of adequate and early involvement of industry partner in the technology development & transfer project and mutual trust.Industry lacks technology adoption capabilities and risk taking attitude.Lack of easy access to risk finance/capital and incentives are not available to industry to take up innovative and risky technology projects for commercialization. There is a huge challenge in attracting venture capital into this space due to the long gestation period.There are no universally acceptable measures, available to determine the effectiveness of technology transfer or degree of successful transfer. Different stake holders have different criteria for determining the success of the transferred technology.To achieve successful and effective transfer of technology particularly to the SMEs, the above barriers need to be removed by the government through appropriate incentives, institutional mechanisms, policies and legislative Acts, etc

1.13 Technology Transfer –Policy Initiatives in India

India’s Science & Technology (S&T) Policy 2003 states that a strong base of science and engineering research provides a crucial foundation for a vibrant programme of technology development. Priority will be placed on the development of technologies which address the basic needs of the population; make Indian industries – small, medium or large – globally competitive; make the country economically strong; and address the security concerns of the nation. Special emphasis will be placed on equity in development so that the benefits of technological growth reach the majority of the population, particularly the disadvantaged sections, leading to an improved quality of life for every citizen of the country. These aspects require technological foresight which involves not only forecasting and assessment of technologies but also their social, economic and environmental consequences.India’s technology policies included both direct policies for indigenous technological development as well as indirect policies for restricting and regulating technology imports and technology transfer. As a follow-up actions of the Technology Policy Statement and to realize the objectives of the S&T policies, several schemes/institutional mechanisms were created over the years to support technology development and transfer.Prior to 1991, there were no government schemes that provided financial support for R&D by private industry. Since 1991, the government has created schemes for the financial support of local industrial research and development. Prominent among these are the Techno-preneur Promotion Programme (TePP), the Home Grown Technologies Programme (HGT), Technology Development and Demonstration Programme (erstwhile PATSER), Pharmaceuticals Research and Development Support Fund (PRDSF) Small Business Innovation Research Initiative (SIBRI), Biotechnology Industry Research Assistance Council (BIRAC), Biotechnology Industry Partnership Programme (BIPP) under Department of Biotechnology, Technology Development Council of Department of Information Technology, Technology Development Board (TDB) and various schemes operated by different Ministries such as Ministry of Food Processing, Steel, MSME, MNES, Ministry of Textiles, Department of Industrial Policy and Promotion (DIPP). A recent programme to support public-private partnerships is the New Millennium Indian Technology Leadership Initiative (NMITLI) of the CSIR that seeks to support joint work between Indian companies and the government laboratory network to create technology leadership positions in industries/technologies where India has a potential competitive advantage in global markets.All the above schemes essentially offer grants, low cost loans and its combination to public funded institutions and industry for the development, scaling-up and commercialization of new technologies and explicitly encourage industry to partner with national laboratories or science/engineering education institutions. Although the objectives of the schemes are very good but have many limitations such as stringent conditions to avail these financial resources by industry, bureaucracy and red tape, lack of awareness about these schemes and inadequate resources including human resources to manage these schemes effectively.

1.14 Background of the Problem

The importance of technology transfer for the well being of national economy, inter alia, international competitiveness, corporate profitability and growth has been well established and documented. Inspite of the several pro-active initiatives, many of the technologies developed in Indian laboratories have remained unexploited. The desired impact has not been made by technology transfers from publicly funded from R&D institutions to industry, albeit a beginning has been made in a modest way [Kumar, 2003]. Following are some of the motivating factors to undertake the present research study.The Prime Minister of India at the Indian Science Congress 2010 declared 2010-20 has the decade of innovation and formed a National Innovation Council and subsequently announced the “The Science, Technology and Innovation Policy [STI 2013]” in the 100th Indian Science Congress held at Kolkata in 2013. STI-2013 has given emphasis on migrating R&D outputs into commercial applications by replicating hitherto successful models as well as establishment of new models. Further, it states new paradigms of innovation have emerged, systems that foster innovation are not universal and they have become country and context specific. STI-2013 aims to double the India share of global trade in high technology products from the current 8%.While presenting the Budget for 2012-13, Finance Minister Pranab Mukherjee proposed Rs. 5,000 crore venture fund for Micro Small and Medium Enterprises, as this sector is one of the building block the country’s economy and faces huge problems of easy and affordable credit as banks are usually reluctant to lend funds to it in the absence of adequate collaterals. In tune with this government initiative, subsequently, the Director General, Dr. K. Samir K Brahmachari, country’s largest laboratory cluster-the Council of Scientific and Industrial Research (CSIR) with 38 labs across the country under its hold has announced that CSIR now focus on transfer of technologies on non-exclusive licensing basis to MSMEs [The Economic Times 17.09.2012].In a developing country like India most of the R&D is public funded and conducted in research institutions, and universities. Transfer of technologies arising from non-commercial environs meet with more difficulties before being adopted successfully by the industries. Visalakshi [2009] analyzed large number of indigenously developed and transferred technologies in the area of biotechnology during 1986 to 2005 and found that technology success rate in India is very low. The main reason for low success rate is found to be the low level preparedness of the technology delivery system and suggested that more empirical studies are required to understand and identify the critical factors to improve the rates of successful transfer of technologies.Dr. Sourav Pal, Director, National Chemical Laboratory (NCL), Pune, while addressing a press conference [www.indianexpress.com/news/ncl/7813], stated that “NCL has successfully transfer several technologies to industry but they also faced problems in commercialization of many of the new technologies transferred by them, as they give only the process know-how developed at laboratories scale and that is where their association used to end. We have realized that for commercialization of laboratory technology, the hand holding process with industries must continue till the end”. If the association of the laboratories needs to be continued till the end there is a need to understand the requirements of each stakeholder to make the technology transfer successful.The R&D investments made so far have, however, resulted in huge Science & Technology (S&T) capacity building and positioned India at 64th position out of 141 countries, [Switzerland at No.1,USA 10 and China at 34] in the global innovation index in 2012 [WIPO 2012http://www.livemint.com/innovations.html]. No doubt, the scientists at these PRIs are developing stacks of new processes, products, designs and creating Intellectual Property Rights (IPRs), particularly patents for years, but, it is disheartening to note that only about 10% of the 37,334 patents which are in force as on March 2010 have been licensed for commercial utilization by industry [Indian Patent Office Annual Report 2010, Brahmachari, 2011]. There is a need to investigate systematically to find out the reasons for such a low rate of licensing of patents and the resulting technology transfer.About 74% of annual expenditure on R&D is being incurred by government and as pointed above by many researchers that the return on investment (ROI) on R&D needs to be improved. It has been argued by several scholars that the PRIs in India have failed to adequately address industry needs or requirements and contribute to India’s industrial catch-up, as the innovations resulting from public-funded research were not reaching the market place at required pace and measure [Ray 2011].The typical technology transfer rates in developing countries is low i.e. between 3-5% compared to 10-15% in developed countries as there are many exogenous and endogenous factors which influence the technology transfer [Chandran, 2010].Furthermore, a preliminary search of most of the available sources has shown that most of the research publications, and knowledge pertaining to technology transfer from public funded research institutions to industry is from the developed countries and not much from developing countries like India, There is a need for such studied from developing country perspective..Mayer and Blaas [2002] point out that, in recent decades, SMEs have begun to utilize technology transfer as a strategic means of meeting challenges posed by the globalization of business. Due to their small size and skill resource constraints, they cannot carry out internal R&D to generate their own technologies but still need a flow of new technology to be able to compete. This need has created a new niche-market for technology transfer [Morrissey & Almonacid 2005]. The importance of technology transfer, from an economic and competitiveness perspective, has also stimulated institute/university–industry technology transfer. To meet the SME needs, PRIs should understand their requirements and reposition themselves in the emerging market needs.The research institutions in India too are under pressure to capitalize on their knowledge [Nimesh Chandra, 2010]. There have been suggestions to put forth to refocus R&D funding strategy in a way that harnesses research for economic development and it is becoming unwritten norm in most of the major public funded R&D institutions that they need to earn external cash flow (ECF) up to 30% of their annual budget through sources like consultancy, sale of IPRs and technology transfer etc to meet their growth ans expansion plans.The Controller & Auditor General (C&AG) of India in their performance audit report of Department of Scientific & Industrial Research (DSIR) for the year 2003-04 highlighted that, 607 technologies developed by various Council of Scientific &Industrial Research (CSIR) laboratories, including 247 developed prior to 1996-97 had not been transferred. The audit report further stated that 77 technologies were not found fit for commercialization. In 87 cases, the technologies required further improvements/ developments. Of these, 65 cases were more than three years old which were not touched by any industry. In the remaining 82 cases, the negotiations for transfer were underway. [ ]. The situation is no different in other public funded research institutes with regard to licensing of IPRs/ transfer of technologies and the resulting success.In another study, Purushotham [2006] analyzed 125 technology transfer & commercialization projects, which were financed by Technology Development Board, during the period 1996 to 2004, and observed that about 60 % of the technology transfer projects supported by TDB were found to be successfully commercialized, and about 40% were failed, based on the definition of successful technology transfer adopted by TDB. The definition of successful technology commercialization is that i.e. the firm has implemented the technology/project, started producing the product or service at commercial scale, sale of the product/service is commenced and started re-paying back its loan after the initial moratorium period of one year. In spite of through due diligence and close review and monitoring, 40% failure is reasonably high. One need to wait and see whether these units will remain operational or not after 5 years of their operation as the earlier research show that in most OECD countries half of all new firms die within 5 years of their establishment [Purushotham, 2002].Since many studies on technology transfer are theoretical and have exclusively focused on a single or few dimensions of TT determinants [Yin and Bao, 2006, Hau and Evangelista, 2007] that too on either transferor’s or transferee’s perspective. There is a need for more hypotheses development and testing [Huber, 1991, Fiol, 1994]. Furthermore, the literature review show that possibly there are no empirical studies on technology transfer from public funded R&D institutions to industry that have simultaneously examined the effect of different key TT variables/factors on successful technology transfer from the overall technology transfer perspective. Thus there is a strong need to assess the relative influence of each of these factors on successful technology transfer in a single holistic model.In view of the above, it has been felt necessary to carryout detailed study to understand the process of technology transfer being pursued in Indian public funded R&D institutions and requirements that will ensure success in a holistic manner.

1.15 Statement of the Problem

Given the importance of technology transfer from public funded R&D institutions to industry in a country like ours especially in the present day globalized economy, it is a matter of surprise that there are very few empirical studies on technology transfer in general from public funded R&D laboratories to industry. As stated earlier, practices and mechanisms of technology transfer from public funded R&D institutions to industry in India are in their primitive years of evolution. In-depth study and analysis of the subject can enable to understand bottlenecks and gaps in the process of technology transfer and the ways to overcome them.Most of the available literature on technology transfer from public funded R&D institutes to the industries conducted in the industrialized countries particularly the US and Europe and their experiences/learning’s may not be suitable for adoption as they are country and context specific. Bozeman [2000] an international authority on technology transfer from public funded R&D institutions found from a review of previous studies that contextual factors do affect the technology transfer phenomena and stressed the need for studies in the local context. Even the Science, Technology, Innovation Policy 2013 of Government of India has recognized, systems that foster innovation are not universal and they have become country and context specific.The present study therefore attempts to make a small contribution towards addressing the need for empirical studies on the factors effecting technology transfer and build a conceptual model for TT from public funded R&D institutions to industry under Indian context.For the purpose of this research the author developed five categories of factors (facilitators or enablers) which will have impact on the TT process for transfer of technologies from Indian publicly funded R&D institutions to industry, including, (i) the technology and its supplier characteristics, (ii) the technology transferee or receiver characteristics, (iii) the market characteristics, (iv) the commercial or financial factors, and (v) the government policies and regulations.The performance and interrelationship of these TT enablers contributes to the degree of successful technology transfer or value added to the local industry in terms of socio-economic development, attractive return on investment (ROI), launching new product/service in the market etc. The persuasion and justification for such factors and their associated sub-factors is detailed in the following chapter.

1.16 Issues Addressed in the Present Study

The technology transfer project life cycle broadly consists of three phases under Indian context. It starts from (i) joint assessment of the technology proposed to be transferred, (ii) negotiating the terms and conditions, and signing of technology transfer agreement between the transferor and receiver, and (iii) implementation. The technology transferor generally continues hand holding with the technology receiver until the early stage of commercialization. It is very important to understand the TT process and identify the key variables/factors across the technology transfer process life cycle to achieve the successful and effective technology transfer and the envisioned benefits thereof. Earlier studies have been carried out only on either the technology transferor or transferee’s specific perspective but not the combined perspective. Tran [2009] in his review article on technology transfer from government laboratories to industry pointed out that majority of the research articles were published on the technology transferor perspective particularly from the U.S public funded research laboratories.Several of the critical factors identified in the previous studies are contextual. The contexts determine the appearance or nonappearance of some critical factors. Based on the literature survey, the following major dimensions of technology transfer have been identified for a detailed study on how they are going to influence the technology transfer from public funded R&D institutions to industry under Indian context. These dimensions are not entirely exhaustive but are broad enough to include most of the variables examined in studies of university and government technology transfer activities and process.

1.16.1 Technology and its Supplier Characteristics

Technology Characteristics

The strength of the technology is one of the key dimensions in the technology transfer process. Gibson et al [1991] suggests that good or quality technologies sell themselves. A precursor to a new product or good technology is a good R&D. Devine et al [1987] reported that if R&D results were of a premium quality the market would adopt them as a function of normal competitive pressures. According to the Conference Board of Canada [2004] estimates that for each 3,000 new ideas that emerge in industrial R&D, 125 become “small projects,” 4 grow into major developments, 1.7 makes it to market launch and 1 idea becomes a market success. In a technology transfer project, many times there will be uncertainty about the market, the technology, and the cost of production and the process of development of technology itself. The above analysis shows that the technology has to be perfected at R&D stage in all aspects so that the transferred technology could be successful and sustained in the market place. The strength of the technology depends on whether the transferred technology is incremental or innovative in nature, it’s viability, complexity, protection of IPRs, functioning prototype, multiple fields of use, public acceptance, cost and quality, ease of adaptability, the tacit and explicit knowledge content, environment friendliness, the stage of development i.e. lab, bench or pilot scale etc..

Technology Supplier Characteristics

Apart from strength of the technology, the willing of transferor to transfer the appropriate technology and the transferee has every intention to adopt it [Ganesan and Kesley 2006] the technology is also key for achieving successful technology transfer,. The technology transfer process is inherently a fit case for partnerships. The technology transferor apart from providing a sound and matured technology has to play a crucial role in the entire technology transfer project life cycle by working in a close partnership mode with the technology receiver, financing institutions and other stake holders. Characteristics like the technology transfer capability , prior experience in TT, ability transfer the knowledge effectively, credibility, culture, motivational level, commitment, transparency in sharing knowledge, post transfer support, communication and review mechanisms, required financial and human resources, mutual trust and relationship with the partners, support from the top management etc. are important in both intra and inter firm technology transfer as they affect the technology transfer out comes [Raduan Che Rose et al 2008]. The technology transferor characteristics generally evolve over a period of time based on the laboratory’s mission, culture and the associated government policies.In view of the above considerations, there appears to be an imminent need for in depth study to understand the relationship between the technology and technology transferor/supplier characteristics on achieving the successful technology transfer from public funded R&D institutions to industry.. Considering the above, it is felt that an in-depth study on relationship between the technology characteristics and their influence on successful technology transfer would help in understanding and structuring the technology transfer process.

1.16.2 The Technology Transferee or Receiver Characteristics

The characteristics of technology recipient have been affirmed by many studies [Inkpen, 2000, Cohen and Lavinthal,1990,Nazanin,2011] as the important factors that affect technology transfer. In the entire process of technology transfer, the technology receiver is taking the highest risk by committing huge financial and other resources and encounters many barriers in the process.The recipient’s characteristics that have been identified to influence technology transfer are absorptive capacity, in house R&D facilities [Gupta & Govindarajan, 2000; Pak & Park, 2004, Minbaeva;2007], prior knowledge and experience, learning capacity, receptivity, managerial and marketing capabilities, top management championing the project, collaborativeness, availability of key human resources and financial strength etc.Evidently, influence of the technology recipient characteristics needs to be investigated further in order to identify the ideal factors that lead to successful technology transfer.

1.16.3 The Market Characteristics

Bringing new products successfully to market is the lifeblood for every business enterprise, but it is also a complex and difficult task. Of the nearly 16000 new products introduced in 1991, almost 90% did not reach their business objectives [Balachandran, 1997]. It is hard to predict why some new products succeed while most fail. Cooper [1993] noted in his study that the characteristics of successful new products are related to high levels of market attractiveness, sophisticated technology, business and technology synergy, market synergy, and competitive advantage. The market attractiveness of the product/service plays a paramount role in achieving the commercial success of the transferred technology. There are many classical examples in the history where many products have failed even though they were produced successfully using advanced and sophisticated technologies. For example, high temperature super conducting materials. Many experts feel that marketing and market characteristics play a key role in making the technology transfer project either successful or a failure. Some of the key issues needs to be understood and established before undertaking any technology transfer project are, a realistic estimation of demand supply gap, market potential, growth opportunities, competition, entry barriers, adequate marketing budget and marketing strategy etc.Therefore, there is a strong need to understand the influence of market factors/characteristics on technology transfer.

1.16.4 The Commercial or Financial Factors

Financial resources are required in all phases of technology development& transfer. The resource providers are most critical particularly for transfer of indigenously developed innovative/new technologies to small and medium enterprises [Joseph P, 1999]. To assess the commercial and financial requirements, of a technology transfer project, having a well prepared business plan is utmost important. The commercialization and financial aspects of technology transfer project include the negotiation of terms & conditions of the licensing/know-how contract, access to venture funding, availability of risk and other forms of finance for implementation of the project expected ROI and net present value etc. Since commercialization of new technology requires huge investment (Thumb rule;1:10:100 :: R&D : Pilot Plant : Commercial Plant) and the technology receiver obviously need to raise the required resources, apart from his/her own contribution from financial institutions, banks/VC firms/PE players etc as per the prevailing borrowing norms. Korpp et al [2005] stated in their study that government role and financing for commercialization are the critical factors in achieving successful commercialization of new technologies.Capital financing aspects in technology transfer were not studied by many in the past. The funding and financial issues are strongly related to the government policies. It is therefore necessary to gain an insight into the key financial variable which can promote successful technology transfer.

1.16.5 The Government Policies and Regulations

Government policies, laws, schemes, regulations and their level of enforcement can have a significant effect on promoting or hindering the technology transfer process. The pro-active government policies create an interesting pull dynamics in terms of the market. Developed countries such as USA have embarked on the process of technology transfer for the past three decades through several pro-active policies/legislative acts and have gained remarkable success [Tran 2009]. Many countries including India are assimilating similar policies to suit their specific needs [Prabhu Ram,2008].It is therefore necessary to understand the influence of the present government policies/ regulations/schemes on achieving the effective and successful technology transfer from public funded research laboratories to industry.

1.17 Research Gaps and Need for the Study

Although numerous books and thousands of articles have been written on technology transfer practices, hardly any paper deals with comprehensively modeling of technology transfer process from public funded R&D laboratory to industry. Many of the models were developed in the west for the technology transfer from big private sector corporates (MNCs) to private sector firms, or international technology transfers or from research universities to industry with limited perspective all stakeholders. The author has not come across any comprehensive TT model published specifically for transfer of technology from public funded R&D laboratories to industry in general which could be modified and adopted under Indian context. There are number of gaps in our understanding of theory and practice of technology transfer from public funded R&D laboratories to industry. The literature analysis reveals the following research gaps of the field.Though there are many factors that affect technology and knowledge transfer, no research has been performed to either confirm their relevance, or explore new or context specific factors. From an academic perspective very few researches have addressed adequately the causal relationships among various factors contributing to transfer success of technology [Yanqing Duan et al 2010]. Many researchers in the past [McAdam2005,Jisun Kim 2009] also suggested that a model integrating different activities and interests of stakeholders which result in different goals and portfolio of intellectual property, is required to facilitate best practices.Technology transfer models reported in the literature are very fragmented and there is no integrated TT model in the literature which addresses the nonlinear process of technology transfer. Areas such as demand environment (market, finance, government policy support factors) and characteristics of the transferred technologies are practically untouched by the current researchers[Tran 2009].In terms of research methods, tools and methods developed and applied in the field of technology management exists in great numbers for use by researchers [Henriksen,1997], which has not been observed in this field. For instance decision analysis methods have not yet been employed by any research. Other powerful research methods such as system modeling and simulation should also be exploited. Tran [2009] highlights that this limitation can represent an opportunity for future researchers to employ other research methods to study the subjects.About 70% of the models reviewed above are conceptual or theoretical models which have not been validated empirically/statistically. Only 30% of the models are empirical, which are verified and confirmed statistically. Furthermore, most of these models have exclusively focused on a single or few dimensions/ TT determinants of TT. Therefore, there is a need for more hypotheses development and testing. These models also have several limitations. The merits and demerits of the models are shown in Table 2.5.Literature review shows that there are very few empirical studies on international TT, which have simultaneously examined all the critical TT dimensions/constructs or factors in a single model [Sazali et al 2009]. However, there are no publications related to transfer of technology from public funded R&D laboratories to industry either in developed country context or developing country context which have simultaneously examined all the critical TT dimensions/constructs or factors in a single model. Thus, it is proposed in this study to assess the relative influence of each of the identified factors/constructs/latent variables on technology transfer success simultaneously in a single holistic model.We sought to fill these gaps in the literature by (i) mapping the variables important across the technology transfer chain in the context of transfer of technology from public Indian funded R&D laboratories to industry through content analysis (ii) carry out exploratory factor analysis (EFA) to reduce the large number of variables into a set of structured underlying dimensions or factors of technology transfer. (iii) Formulating the conceptual model with the key factors emerged from EFA studies and empirically examining the effects of all these critical TT factors on degree of transfer success. (iv) Assessing reliability and validity of these observed variables forming the factor or construct or latent variable and the interrelationship between the latent variables or factors or constructs using confirmatory factor analysis (CFA) (v) Fitting the data into Structural Equation Modeling (SEM) to validate the hypotheses and estimating goodness of fit indices.

1.18 Aims and Objective of the Study:

This study aims to cover the technology transferor and transferee perspective and the entire environment in which the technology transfer takes place under Indian conditions. Based on the discussions held in the earlier section, the main objectives of this research study is toCarryout an empirical study to identify the factors effecting technology transfer and build a conceptual model in terms of the identified factors for TT from public funded R&D institutions to industry under Indian context.Within the main objective the sub objectives are as underTo identify TT facilitating and outcome variables/factors and associated sub-factors that would influence the technology transfer.Assess TT models published in literature relevant to the context of the study and bring out clearly their utility, merits & demerits of each model and identify gaps .Based on the key variables/dimensions/factors identified and models assessed in the literature survey/content analysis develop a conceptual or hypothetical model best suited for India while taking into account the prevailing gaps in Indian TT model, if any.Develop suitable hypotheses in terms of the conceptual model factors formulated above in (iii)Validate the model with the help of (i) primary survey and (ii) secondary data .To present analysis and interpretation results in the form recommendations to improve the overall technology transfer from public funded R&D institutions to industry in India.To contribute knowledge in general to the area of TT processes and outcomes derived for the study.To provide directions for future research relating to technology transfer from publiclyfunded R&D institutions to industry.

1.19 Scope of the Study

The scope of this research was limited to the development and validation TT model for technology transfer from Indian publicly funded R&D institutions to industry. The formulated model derived from this study should enhance the effectiveness of the TT process from publicly funded R&D institutions to industry in developing and newly industrialized countries. Such a model can help to improve the degree of understanding on the significant factors which impact on the TT process, the interaction between these factors and the predominant outcomes of these TT enabling processes.The following is the broad scope of the study:The study is carried out across the public funded research institutes(both national labs and higher educational Institutions), funding bodies, policy makers, and private industry associated with the technology development, transfer& commercialization in different sectors, such as; chemicals, bio-technology, drugs& Pharma, advanced materials, engineering, nanotechnology. The sample was chosen from the ‘Directory of R&D Institutions 2010’ published by Government of India.The study covers eleven year period 2000-2001 to 2010-2012The study is based on both primary data and secondary data. The main source of primary data is questionnaire survey based on responses received from the universe mentioned above. The main sources for the secondary data, are conference proceedings, published case studies, commercial data bases such as web of science, scopus, published papers in peer reviewed professional journals, published and un published reports of various institutions/government departments, annual reports and internet etc.

1.20 Approach of the study

In order to meet the objectives of the study highlighted in the previous section, the following approach is used in this study.Gain a preliminary understanding of the technology transfer & commercialization environment, practices and policies facilitating partnerships for transfer of technologies in vague in India and other developed countries.Conduct a survey of the literature to review the research work done in the field of technology transfer & commercialization from public funded research institutions to industry and verify if the problem identified for this research has been addressed by other researchers and if so then identify the gap in the literature.Identify the dimensions/key factors for successful technology transfer & commercialization performance and formulate a hypothetical model to achieve the effective technology transfer.Develop the measuring instrument to capture the perceptions of the technology transferors and technology receivers on the identified key dimensions/ factors of the hypothetical model.Before administering the final questionnaire, conduct a pilot study to verify the applicability of the survey instrument i.e. the questionnaire, and make the necessary adaptations in the instrument for the final survey.Validate the model, using the primary data collected through a questionnaire survey along the dimensions/factors identified across the innovation chain/process using quantitative statistical methods like structural Equation Modelling (SEM).Present the conclusions, recommendations, implications to public funded research institutions, industry, government, limitations of the study and future research directions etc.

1.21 The Plan of the Thesis

This thesis is organized into six chapters. A brief chapter-wise summary follows.Chapter 1 deals with the importance of technology transfer in socio-economic development of the country, definition of technology transfer, the landscape of public funded R&D, and industrial scenario. It also briefly presents the gaps in literature and need for the study, leading to the identification of the problem for the present study, followed by presenting an outline of the objectives of the study, scope of the study and a chapter-wise summary.Chapter 2 provides a review of TT literature, with emphasis on studies conducted in the technology transfer from public funded R&D laboratories to industry. An attempt has also been made to assess the utility, merits, demerits and gaps in different TT models reported in the literature.In particular, existing models of TT for transfer of technologies from public funded R&D institutions to industry were examined and relevant factors extracted for the purpose of developing a conceptual model for TT from public funded R&D laboratories to industry under Indian context. This conceptual model accommodates the numerous factors believed to impact on the TT process effectiveness and derived outcomes. At the end classification of research topics covered and research methods used so far are summarised.Chapter 3 discusses the overall research method of the present study comprising research objectives, plan, design, and the measuring instruments, structure of the questionnaire, data collection and methods of analysis.Chapter 4 is exclusively devoted to pilot study. Following the literature review and the development of a conceptual model for TT, a pilot study was undertaken and detailed in this chapter. The role of pilot study was to refine the conceptual model and test the validity of the questionnaire survey. This was achieved through soliciting the perceptions of technology transfer professionals from Indian public funded R&D institutions and industry on the significance of a number of TT factors and the successfulness of these factors on past projects that they have been involved in where TT projects were implemented.Chapter 5 presents the results of the primary study which utilized questionnaire developed from the pilot study, to solicit the perceptions of technology transfer professionals from Indian publicly funded R&D institutions and industry. A range of statistical analysis techniques was utilized to exploit collected data in order to test the hypotheses set up, confirm model factors and sub-factors, establish interrelation ships between the constructs, causal paths between such factors and ultimately validate and finalize a model for TT for successful transfer of technologies from publicly funded R&D institutions to industry.Chapter 6 concludes with some recommendations to technology transferors, receivers and government seeking greater rates of successful technology transfers from publicly funded R&D institutions to industry in developing countries like India. Finally, research outcomes and associated contributions to knowledge, limitation of present research, and directions for future research are presented in this chapter. Following the reference list, the questionnaire survey used for primary study, the list of targeted respondents and major clauses of technology transfer agreement are provided in Appendices A through to C, respectively.