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MANAGEMENT
ofThe Key to Competitiveness
and WealthCreation
TECHNOLOGY
Tarek Khalil | Ravi Shankar
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Technol
ogyTransfer
1
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RANBAXY ENTERS INTO ANTI-
HIV DRUGS MARKET Ranbaxy Laboratories Limited (Ranbaxy) is the largestpharmaceutical company of India, which is now owned by theDaiichi Sankyo Group of Japan
Despite an entry in pharmaceutical area in 1970s, only by late 1980s
that Ranbaxy showed the fruits of its R&D efforts by developing of anovel process for Cefaclor, which was the best selling antibiotic drugin 1980s
Ranbaxy had another excellent experience in development of a newprocess in drug discovery system
The NDDS of Ranbaxy was able to produce a one-dose-a-dayformulation in place of multiple-dose-a-day therapy formulation ofBayer
Bayer did not waste much time and entered into a licensingagreement with Ranbaxy
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RANBAXY ENTERS INTO ANTI-HIV
DRUGS MARKET (Contd.) Third example of a similar type is technology transfer related arrangement
with Gilead Sciences, Inc., which was founded in 1987 in California
Through a technology transfer arrangement in 2006, Ranbaxy got the
marketing right in India and many other developing nations for two drugs,
Tenofovir and Emtricitabine, developed by Gilead that were very popular inHIV therapy
Gilead retained the rights to manufacture and market generic equivalents of
(i)Elvitegravir, an investigational integrase inhibitor,(ii)Cobicistat, an
investigational anti-retroviral boosting agent, and(iii)Quad, which combines
four Gilead HIV medicines in a once-daily, single-tablet regimen Under the agreement Ranbaxy, which is one of the four licensees will also
receive a complete technology transfer of Gilead manufacturing process to
support their efforts to obtain local regulatory approvals and scale up
production
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INTRODUCTION
A user of a technology does not have to be itscreator or inventor
Transfer of technology is a process essential forthe wide application and utilization oftechnology by one or more users
We discuss here some cases of international
technology transfer, present examples ofsuccessful national programmes of technologytransfer, and examine a model of intra-firmtechnology transfer
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DEFINITIONS AND
CLASSIFICATIONS Technology transfer is a process that permits the flow of technology
from a source to a receiver
Jain and Triandis (1990) define technology transfer as a process by
which science and technology are transferred from one individual or
group to another that incorporates this new knowledge into its way of
doing things
Technology transfer can be divided into the following categories:
International technology transfer
Regional technology transfer
Cross-industry or cross-sector technology transfer
Inter-firm technology transfer
Intra-firm technology transfer
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CHANNELS OF TECHNOLOGY
FLOWGeneral channels
Reverse-engineering channels
Planned channelsLicensing
Franchise
Joint ventureTurnkey project
Foreign Direct Investment (FDI)
Technical consortium and joint R&D project
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INTERNATIONAL TECHNOLOGY
TRANSFER The technological production base previously confined to the
industrialized nations of the West and the North has recently spread
to a large number of other countries
In a majority of cases, the migration of technology occurred throughinternational technology transfer, through mutual cooperation
agreements, or through direct purchases from the United States,
Germany, Japan, and other industrialised countries
The migration of technology and production facilities from theUnited States to Japan and other Asian countries in the 1970s and
1980s occurred because of a lack of competitiveness in U.S.
manufacturing
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INTERNATIONAL TECHNOLOGY
TRANSFER (Contd.) Avoiding head-
to-head
contests for
technology
supremacy, the
Tigers prefer to
target niches
where they can
quickly turntechnologies
into world-class
products
Technology Specialisation Among the Tigers
Source:BusinessWeek,
Dec.7,1992
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INTERNATIONAL TECHNOLOGY
TRANSFER (Contd.) The Singapore Model
Establish/maintain a clean, effective government that is well respected by the
people
Avoid internal squabbles for national unity
Build on areas of strength
Encourage savings to increase investment while avoiding external debt
Encourage family projects and local industry to create economic
opportunities, and keep people from emigrating to large cities
Do not waste funds on huge projects
Encourage investment by both small investors and multinationals
Promote education
Develop effective strategies for technology transfer
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TECHNOLOGY TRANSFER IN
TAIWAN In Taiwan, industrial technology R&D is enhanced by a nonprofit
corporation known as the Industrial Technology Research Institute
(ITRI)
Taiwan has located ITRI next to two of its top universities in science andtechnology: the National Tsinghua University and the National Chiao-
Tung University
To facilitate the transfer further, an industrial park is located in close
proximity to permit a project incubated in ITRI to be spun off to a
privately owned facility in the industrial park
Technology transfer through people is a very effective transfer
mechanism
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U.S. NATIONAL TECHNOLOGY
TRANSFER The United States is by far the most intensive technology-producing country in the world
How is it, then, that U.S. competitiveness declined in the 1970s and 1980s and that the nation
has a huge deficit in its balance of trade?
The National Aeronautics and Space Administration (NASA) has been very active in promoting
technology transfer and has created a national network of Technology Transfer Centres
Perrin (1990) described a proactive approach to the transfer of Department of Defense (DOD)
technologies to solve civil problems
Perrin enumerated the advantages of the active transfer process as follows:
Conveys timely information on current and planned developer and user programmes
Provides real-time feedback and criticism on specific technology or problem items
Allows the transmittal of ancillary information and know-how that is not available in formal literature or
reports
Permits the transfer agents to manage and control in a user-need or applied direction
Requires a relatively small expenditure of effort and time relative to the results obtained
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U.S. NATIONAL TECHNOLOGY
TRANSFER (Contd.)NASA National Network
The national network of Technology Transfer Centres and offices sponsored by NASA is dedicated to the timelytransfer of scientific advances and technologies resulting from NASAs aeronautics and space programmes andother federal R&D to practical applications throughout the U.S. economy.
NASA field centres: Each of NASAs field centres has a Technology Transfer Office to coordinate and manage a fullrange of technology transfer activities, including new technology reporting, technical assistance, cooperativeprojects, and industry outreach.
Regional Technology Transfer Centres: The NASA Regional Technology Transfer Centres (RTTCs) are staffed bytechnology transfer experts offering technical consultation services and linkage to other experts in the field. TheRTTCs provide services to industry within their designated regions and assist industry clients to locate, assess, andcommercialize technologies from NASA and the federal R&D base.
National Technology Transfer Centre: The National Technology Transfer Centre (NTTC) serves as a nationalclearinghouse/gateway for federal technology transfer and provides services and assistance in training, planning,and outreach.
Earth Data Analysis Centre: The Earth Data Analysis Centre (EDAC) provides technology transfer services insupport of the distribution and transfer of remote sensing/geographic information systems data and technology.
Technology Application Team: The Technology Application Team (TAT) works with industry to identify and solvecritical problems with existing NASA technology and to develop cooperative projects and relationships thataddress technological needs of national or industry-wide significance.
Computer Software Management and Information Centre: The Computer Software Management and InformationCentre (COSMIC), operated by the University of Georgia, is NASAs technology transfer programme for collectingand documenting computer software technology produced by NASA and distributing it to U.S. private,government, and academic organizations.
Centre for AeroSpace Information: The Centre for AeroSpace Information (CASI) maintains mailing lists anddistributes NASA technology transfer publications, including the annual Spinoff report. CASI provides responses
and referrals to inquiries about technology transfer. CASI also provides centralised technology transferdocumentation support for all NASA centres.Source:NationalAeronauticsandSpaceAdministration,
1995.
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U.S. NATIONAL TECHNOLOGY
TRANSFER (Contd.)
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U.S. NATIONAL TECHNOLOGY
TRANSFER (Contd.)Wood and EarNisse (1992) mentioned the following factors as
contributing to the successful technology transfer project from
Sandia to Quartex:
Technology transfer fit for Quartexs strategic planning.
Sufficient proprietary rights from Sandia to Quartex to justify therisk of investment
Potential for additional proprietary coverage for the technology
through improvement patents and new technology
A landmark invention
Diverse market applications for the technology
Incentives for sustained technology transfer and support by a
product champion
Required resources within Quartex for product commercialization
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U.S. NATIONAL TECHNOLOGY
TRANSFER (Contd.)Wood and EarNisse (1992) mentioned the following factors as
contributing to the successful technology transfer project from
Sandia to Quartex:
Technology transfer fit for Quartexs strategic planning.
Sufficient proprietary rights from Sandia to Quartex to justify therisk of investment
Potential for additional proprietary coverage for the technology
through improvement patents and new technology
A landmark invention
Diverse market applications for the technology
Incentives for sustained technology transfer and support by a
product champion
Required resources within Quartex for product commercialization
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INTRAFIRM TECHNOLOGY
TRANSFERA firm attempting to transfer technology from one site toanother or from one division to another must approach thetransfer process in a systematic and deliberate manner
In fact, complicated transfer projects may require two
teams, one at the source and one at the receiving end of thetechnology
In this model, the project starts when a company decides toacquire new technology through the purchase of a smallerentrepreneurial company located thousands of miles away
In this particular case, the team comprises two separategroups: one at the headquarters and one at the acquired-company location
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INTRAFIRM TECHNOLOGY TRANSFER
(Contd.)
Intrafirm
TechnologyTransfer Model So
urce:BeruvidesandKhalil,19
90;1990InstituteofIndustrial
Engin
eers
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INTRAFIRM TECHNOLOGY TRANSFER
(Contd.)
Several useful guidelines for setting up atransfer team are recommended by Beruvidesand Khalil (1990):The smaller the team, the better.
People work best in an atmosphere of trust andhealthy competition.
Building teamwork and motivating the teammembers are critical.
The chain of command and communicationchannels should be well understood by all.
Success is largely dependent on the quality of thepeople selected to perform the tasks
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WEBLINKS www.ranbaxy.com
http://www.ranbaxy.com/UploadInc/CorporatePresentation/Corporate_Pres
entation.pdf
http://www.gilead.com/worldwide_operations
http://articles.economictimes.indiatimes.com/2011-07-13/news/29769199_1_c
obicistat-and-quad-tenofovir-gilead-sciences
http://www.topnews.in/health/ranbaxygilead-sciences-manufacture-and-mark
et-three-anti-hiv-drugs-india-developing-nations-212788
http://www.thehindubusinessline.com/companies/article2221311.ece
http://www.ranbaxy.com/http://www.ranbaxy.com/UploadInc/CorporatePresentation/Corporate_Presentation.pdfhttp://www.ranbaxy.com/UploadInc/CorporatePresentation/Corporate_Presentation.pdfhttp://www.gilead.com/worldwide_operationshttp://articles.economictimes.indiatimes.com/2011-07-13/news/29769199_1_cobicistat-and-quad-tenofovir-gilead-scienceshttp://articles.economictimes.indiatimes.com/2011-07-13/news/29769199_1_cobicistat-and-quad-tenofovir-gilead-scienceshttp://www.topnews.in/health/ranbaxygilead-sciences-manufacture-and-market-three-anti-hiv-drugs-india-developing-nations-212788http://www.topnews.in/health/ranbaxygilead-sciences-manufacture-and-market-three-anti-hiv-drugs-india-developing-nations-212788http://www.thehindubusinessline.com/companies/article2221311.ecehttp://www.thehindubusinessline.com/companies/article2221311.ecehttp://www.topnews.in/health/ranbaxygilead-sciences-manufacture-and-market-three-anti-hiv-drugs-india-developing-nations-212788http://www.topnews.in/health/ranbaxygilead-sciences-manufacture-and-market-three-anti-hiv-drugs-india-developing-nations-212788http://articles.economictimes.indiatimes.com/2011-07-13/news/29769199_1_cobicistat-and-quad-tenofovir-gilead-scienceshttp://articles.economictimes.indiatimes.com/2011-07-13/news/29769199_1_cobicistat-and-quad-tenofovir-gilead-scienceshttp://www.gilead.com/worldwide_operationshttp://www.ranbaxy.com/UploadInc/CorporatePresentation/Corporate_Presentation.pdfhttp://www.ranbaxy.com/UploadInc/CorporatePresentation/Corporate_Presentation.pdfhttp://www.ranbaxy.com/