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Chapter 6: Mechanism of Technology Transfer and its
Effectiveness
"If we continue to develop our technology without wisdom or
prudence, our servant may prove to be our executioner." Omar
Bradley
Dairy development depends to a great extent on how successful knowledge is
generated and applied. Investment in knowledge, especially in the form of science and
technology has featured prominently and consistently in most strategies to promote
sustainable and equitable dairy development at national level. Although many of these
investments have been quite successful i.e. development of technology in dairy
(World Bank, 2006), the context for dairy is changing rapidly in the process of
technology knowledge management. It is increasingly recognized that value of
traditional dairy science and technology investment such as research, innovation and
extension, although necessary, is not adequate to enable dairy development.
Moreover, the changing needs and demands of end users i.e. farming community,
industry and other value added customer needs are not entirely met by technology
generated under national dairy development programme (Swaminathan, 2004).
The present chapter deals, in first section, with the conceptual issues around terms
such as technology and technology transfer from University. In second section, the
chapter identifies, from literature, major mechanism of technology transfers which are
used for transfer of technologies from research institutes and university. Further, an
attempt is made to identify the mechanisms of transfers of technologies employed by
CFTRI and NDRI? Additionally, the relative importance of the technology transfer
mechanisms for concerned Institute is assessed. It also identifies the factors that play
important role in technology transfer from the institutes to Users. The endeavour of
this chapter is to highlight the barriers to commercialisation of technology and find
the possible solutions through gaining a better understanding of technology transfer
professionals' perceptions about TT.
151
It is an accepted fact that modem dairy innovations emerge from the university
system such as CFTRI and NDRI, and are adopted by industry as a process referred to
as 'bench to bedside'. As government supported institutions, a need is felt to meet the
expectations of the public, through new technologies and new improved processes and
methods. The process through which these expectations are met is called 'technology
transfer'. These advancements are persistently correlated to economic progress and
social benefits of end users. Therefore, advancing technologies also form much of the
business of university scientific research. often, however, university research is not
easily, or even successfully, transferred to industry (Markham et al., 1999).
Though, new scientific discoveries have flourished in these institutions, it has been
argued that there is a lack of direction when it came to transferring these discoveries
to the market. Though, in recent past, in the new life sciences era that is marked by
the convergence of scientific disciplines such as computer sciences, engineering, life
sciences, mathematics and statistics, technology transfer becomes an interesting
challenge.
The 11th five year plan has also stressed on strengthening academic-industry interface
and public-private partnership effectiveness in dairy sector. The plan has setup
priorities such as movement of technologies from the laboratories to market place
through technology transfer and new venture creation, and enhancing mobility of
science and technology professionals. For the reason the government needs to extend
all benefits and conditions along sufficient funding for R&D institutes. Therefore, it
is expected that front runner public R&D institutes might need to establish early
linkages with industry in developing new technologies. This helps to prevent
developing unrealistic expectations about the market potential and the success of
technology transfer process. As an assumption, ifboth of them partner in developing a
technology, then there may be greater possibility for developing dairy technology
with having better socio-economic impact.
152
6.1 Conceptual issues
6.1.1 Technology
There are various definition of technology transfer adopted by different organisation
and institutions. In many instances, definitional controversies can be quickly resolved
by simply relying on dictionaries. Here in the chapter, this is not one of those
instances. Works on technology transfer generally focus on technology as an entity,
not a study and certainly not any specific applied science. The most common view of
technology is "a tool", and then discussions proceed as to just what type of tool
qualifies as technology (Bozeman, 2000). As Webster's dictionary offers just three
definitions of technology, none of which sets all definitional controversies to rest.
According to Merriam-Webster Online Dictionary the technology word originates
from Greek word technologia which means systematic treatment of an art,
(etymology: techne art, skill + -o- + -logia -logy). Therefore, technology is
1. A: the practical application of knowledge especially in a particular area:
engineering and medical technology; B: a capability given by the practical
application ofknowledge e.g. a car's fuel-saving technology
2. a manner of accomplishing a task especially using technical processes,
methods, or knowledge e. g. new technologies for information storage
3. the specialized aspects of a particular field of endeavour e.g. educational
technology
The technology is also defined as (a) the application of science, especially to
industrial or commercial objectives. (b) The scientific method and material used to
achieve a commercial or industrial objective (American Heritage Dictionary, 2006).
This definition is more inclusive then what it was in Webster's 1989.
Further, technology is considered as "the systematic knowledge for product
manufacture and service provision in industry, farming and commercial fields," and
knowledge is reflected in inventions, utility models, designs, and in data forms.
153
Knowledge is also shown in industrial plants, design, installation, operation, and
maintenance of equipment, management of industrial & commercial corporations, and
the technical skill & experience of experts for those activities. In this definition, it
must be noted that technology comes from knowledge. However, not all knowledge is
included. Therefore, fundamentally, a technology is an idea, practice, or object
resulting from research as well as a tool that embodies the technology (Mark Wang,
2003). Similarly, technology as a set of knowledge contained in technical ideas,
information or data; personal technical skills and expertise, and equipment,
prototypes, designs or computer codes Gee (1993). In addition, the technology refers
more to new tools, methodology, processes, and· products and as such, is primarily an
instrument used for changing the environment (Gopalkrishanan S., 2004).
This implies abandoning the preoccupation with technology as 'equipment' alone
(process and product development technologies). Instead, it require a schema which
acknowledges all those institutions, artefacts and arrangements within which the
adoption, configuration and use of those technologies takes place - including the
knowledge and expertise which have created technologies and are embedded within
them (Dosi, 1982), and the processes of learning and experience which inform
innovatory activity (Sahal, 1981 ). Technologies, therefore, are inclusive phenomena.
The 'technology' 'society' and 'insitutions' cannot be treated as entirely separate
categories in dairy sector. Their social settings shape technologies just as much as
vice versa: the mutual relationship among becomes more apparent (MacKenzie and
Wajcman, 1985; Edge, 1988, Bozeman, 2000, Jogerson,etal, 2009, ). It is therefore
clearly unhelpful to treat technologies and their social contexts as separate phenomena
in the way that traditional conceptions have tended to do; the definition of technology
itself must incorporate the social arrangements within which it emerges and becomes
embedded (Hill, 1981; Clark et al., 1988). Therefore, to create understanding about
technology and implications of technological transfer in dairy sector, this is often
named as the social shaping of technology (SST) approach, for technology foresight.
154
6.1.2 Technology transfer
Therefore, the technology sets up a relationship between man and material or nature
wherein man applies science for making use of naturally available and unavailable
resources to fulfil its biological, social, psychological, economical, political,
environmental, and spiritual needs. The man creates and develops such technologies
in laboratories, research institutes and universities. These technologies must be
transferred to appropriate application in right setting with suitable society and
consumers. When it comes to Transfer of Technology (TT) what does it mean? How
it is viewed and defined?
The definition of technology transfer differs substantially from one discipline to the
next (Zhao and Reisman, 1992). The economists prefer to define technology on the
basis of the properties of generic knowledge, focusing particularly on variables that
relate to production and design (Arrow, 1969; Johnson, 1970; Dosi, 1988). On the
other hand, sociologists tend to link technology transfer to innovation and to view
technology, including social technology, as "a design for instrumental action that
reduces the uncertainty of cause effect relationships involved in achieving a desired
outcome" (Rogers, 1962; Rogers and Shoemaker, 1971). Anthropologists tend to
view technology transfer broadly within the context of cultural change and the ways
in which technology affects change (Foster, 1962; Service, 1971; Merrill, 1972).
Technology transfer is the movement of new technology from its creator or researcher
to a user, especially as products or publications; also, the movement of new
technology from developed areas to less-developed areas. Further, technology transfer
is 1) assignment of technological intellectual property, developed and generated in
one place, to another through legal means such as technology licensing or franchising.
2) Process of converting scientific and technological advances into marketable goods
or services (Business dictionary, 2008). Technology transfer is the process of
developing practical applications for the results of scientific research. Technology
transfer includes, but is not limited to, the disclosure of results from research and
development, the licensing or assignment of intellectual property rights related to such
155
results, exchange of information, education and training, and joint ventures. The end
result, in meaningful terms, is the making available to a recipient of industrial and
agricultural processes and products and the relevant enabling technology for practical
realisation.
All the respondents from CFTRI and NDRI have responded with full agreement on
the definition of technology transfer presented to them for their response. The
presented definition of technology transfer supplemented with some additional views
by certain respondents. The most comprehensive definition of technology transfer
emerged through the study and followed in the thesis is as follows.
Technology transfer is
- Informal discussions of research results and techniques between individuals
supported by government funds (transferors) and individuals working in the
private or public sector (transferees)
- Formal dissemination of research results, for example, at conferences,
workshops
- Licensing of university and national laboratory patents to the private or public
sector
Cooperative or collaborative Research and Development (R&D) between a
university or laboratory and the private or public sector
A. Informal: work initiated out of mutual interest without generation of written
agreements
B. Formal: joint grants or agreements to perform collaborative work
- Startup of small company based on government funded research
- Technical assistance from transferors to the private or Public sector, farmers,
workers
I 56
- Innovations, Scaling up and commercialization.
Personnel exchange or loan (professor or student on visit or temporary
assignment to company or company technologist on visit or temporary
assignment to university)
- Private and Public-sector use of government funded facilities
- Formal exchange (written agreement, e.g., consultant) of non-patented
intellectual property--techniques, skills, the "art" of the practice, food
compositions, ingredients etc.
Technology transfer is crucial for the innovation that drives a healthy economy, the
development of new technologies for humanitarian and public benefit, and to generate
revenues to support the university's core teaching mission (Humboldt State
University, 2007). The purpose of technology transfer is to make the results of its
research available for public use and benefit by enabling inventions to be developed
into useful products in the commercial marketplace; disseminate new and useful
knowledge resulting from University research through the use of the patent system;
raise revenue to support research and education; offer meaningful incentives to spur
research, invention, and the entrepreneurial-spirit. The technology can be transferred
horizontally and vertically as evidence suggests.
Horizontal and Vertical Technology Transfer
A difference is commonly made between vertical and horizontal transfer. Horizontal
transfer refers to an established technology being transferred from one operational
environment to another. The technology is already commercialised and the intention
is to disseminate the technology and broaden its application into other contexts. This
type of transfer is used by companies wishing to maximise the return from their
technology, but being unable to do this by direct selling of end products in a market.
Horizontal transfer is more common when technology is being transferred from
industrialised to developing countries (Wang, Metal, 2003).
157
Vertical transfer refers to technology being transferred from research to development
to production. Therefore it follows the progressive stages of invention, innovation and
development, with the technology becoming more commercialised as it proceeds
through each stage. Vertical transfer can be within one organisation or a transaction
between, say, a research institute and a manufacturing company.
The research institutes, CFTRI and NDRI, in India follow the vertical transfer path of
technology transfer. The vertical technology transfer follows certain TT mechanisms.
The chapter further focuses on study of mechanisms of technology transfers applied
by the CFTRI and NDRI to transfer technologies developed by them. Thus,
technology transfer occurs in many ways-through the simple spoken word, through
the physical transfer of a tangible product of research or through the relative
complexity of an intellectual property licensing program.
6.2 Mechanisms of Transfer of Technologies
University-Industry technology transfer can occur in many different forms (Ups till &
Symington, 2002), such as, through the publication of research results in scientific
journals, books and articles, through industry sponsored research, through strategic
research partnerships between universities and industries, licensing, new start ups or
spin offs, consultancy etc. Some of the views (Parker & Zilberman, 1993; Parker et
al., 1998; Thursby et al., 2001) underscore, the transfer of technology from a
university setting to industry or farmers or users is not discrete event, rather
encompasses of a number of distinct stages. Even as the policies and procedures
governing the university-industry/users technology transfer differ from one university
to another, the basic processes seem to be quite similar (Rogers et al., 2000; Graff et
al., 2002; Friedman & Silberman, 2003; Kumar U et al, 2006).
There are different mechanisms of transfer of technology from University to users and
industry. In US Universities certain TT mechanism preferred such as the graduated
Student, Publications and presentations, informal & collegial networking, sponsored
158
research-Government & Industry, Faculty consulting, and Sharing of Biological
materials (Young, 2000).
6.2.1 Major TT Mechanisms
The literature on technology transfer from University or publically funded research
institutes to users such as industry, fanners and other stakeholders have identified a
range of mechanism of technology transfer (Abramson, 1999; Young T, 2000; Lee J
and Win H N, 2004). Therefore, different mechanisms are identified for technology
transfer between university research centres and industry as under mentioned.
6.2.1.1 Collegial interchange, conference, publication
It is informal and free exchange of information among colleagues, which includes
presentation at professional and technical conferences and publication in professional
magazines. It is widely used and the first step of linkage between academic institutes,
their research centres and industry.
6.2.1.2 Consultancy and technical services provision
One or more parties from the university or research centre provide advice,
information or technical services. They have formal written contract, generally short
term and specific. Faculty members or senior researchers can be hired to consult
during the time they are allowed to work outside (OECD, 1990). It can be of different
forms such as advisory committee, informal grouping of companies, university centre
or industrial liaison units, and management foundation.
Advisory committee consists of faculty members and practitioners to examine
curriculum in detail, to help place students in jobs, to assist witfi faculty development
and to provide some kind of feedback for evaluation (UN, 1974). Informal grouping
of companies are identified where member companies can involve more closely with
the university. Further, University center or industrial liaison units are usually
established to encourage more linkages between the academia and industry. Finally,
the management foundation expresses the commitment and the involvement of
practitioners in the task of improving the quality of management.
159
6.2.1.3 Exchange program
A transfer of personnel can be used to exchange expertise and information either from
industry to laboratory or from laboratory to industry. In this mechanism, conflicts of
each party's interest must be avoided and laboratory must approve of the lab
personnel consulting arrangements.
6.2.1.4 Joint venture of R&D and joint research projects
A contract or agreement is drawn between university/publically funded research
institute and a contractor in which costs associated with the work are shared according
to conditions as specified in the contract. The two or more than two partners can work
together from the stage of R&D to commercialization. It must be of mutual benefit to
industry and the research institutes or University, and commercially valuable data
may be protected for a limited period of time. It provides some assurance that the best
brain in the business will be brought together to bear on the problem, and that there
will be a balance between long term, high risk research and short-term work which
can be promptly commercialized (Moses, 1985). Joint venture and joint project have
higher probability of successful technology transfer. It can be said that the ideal
transfer mode/mechanism seems to be the joint projects among the University or
research institutes and industry to compliment each organization facilities and
expertise. With the knowledge and experience gained from these projects, the
research institutes can improve their capabilities and help the local firms through
licensing and contract research programs and ultimately the joint projects with them.
This TT mechanism encourages to industry and university use it for reducing the risk
(Lee J and Win H N, 2004).
6.2.1.5 Cooperative R&D agreement
This is an agreement between one or more university research laboratories and one or
more firms under which the university side provides personnel, facilities, or other
resources with or without reimbursement. The industrial parties provide funds,
personnel, services, facilities, equipment, and other resources to conduct specific
research or development efforts that are consistent with the university or laboratory's
160
mission (Lee J and Win H N, 2004). American modal of university-industry
cooperative research centres program, which is co-funded by National Science
Foundation and a group of industrial enterprises through grants. This is a remarkable
mechanism of technology transfer. In contrast, Germany and some other European
countries do not have such appealing mechanisms. Consequently, the US model of
industrial grants to the universities encourages creativity in research and technology
transfer (Abramson, 1999).
6.2.1.6 Licensing
Licensing is the transfer of less-than-ownership rights in intellectual property to a
third party, to permit the third party to use intellectual property. It can be exclusive or
non-exclusive and is preferred by small business. The industry as a potential licensee
must present plans to commercialize the invention. Therefore, it is a kind of contract
between university and company. It includes terms for commercial exploration on
University owned technology.
6.2.1.7 Contract research
It is a contract between a research centre and a firm for contract R&D to be performed
by the research centre. Industry usually provides funds on the other hand the
university provides brains with the time frame ranging from a few months to years
(NEDC, 1989). Through contract research, the industry wants to utilize the unique
capability of the research centres that works for commercial benefit.
6.2.1.8 Science Park, Research Park, Technology Park or incubators
These are installations on a given site area, normally close to a university which
collaborate with a member of high-tech firms that receive official assistance in the
early stage (Quintas et al., 1992). The main fund providers would be the participating
commercial firms and the researchers include both from the university research
centres and the industry. This is a kind of form especially adopted by the high-tech
firms.
161
6.2.1.9 Training
Technology transfer through training could be in the form of practical training
wherein students are exposed to the working methods and requirements of jobs at
industry or at the institutions. The capability of staff in the particular field is improved
by further training. Special training is also useful where potential managers are given
lectures on administrative issues and the employees are trained for adoption of a new
technology (Gander, 1987). Many university research centres have training programs
to transfer the research results. It is also a way of reducing risk for the research
centres. It sometimes accompanies the licensing or contract research projects.
6.2.1.10 New start-up or spinoffs
Technology transfer takes place through the creation of university spinoffs (USOs),
where spinoffs (SO) means a new firm created to exploit commercially some
knowledge, technology or research results developed within a university.
6.2.1.11 Extension programmes
The essence of agricultural extension is to facilitate interplay and nurture synergies
within a total information system involving agricultural research, agricultural
education and a vast complex of information-providing businesses. Therefore
extension is a series of embedded communicative interventions that are meant, among
others, to develop and/or induce innovations which supposedly help to resolve
(usually multi-actor) problematic situations. Universities and publically funded
institutes are engaged in transfer of technology through extension in dairy sector in
India. The roots of the extension education originate in US Land Grant Pattern of
Education where state universities have tbe full responsibility for extension education.
The technology channelled from university through extension agents, as a group, who
were first publically funded technology transfer agents in US. The pattern of
integrated functioning of education, research and extension was introduced in India in
1960 when the establishment of agricultural universities was launched on the model
ofthe USA (Nath, NCB and Mishra L, 1992).
162
6.2.1.12 Technology donations
It is the process of offering technology as a charity or gift and providing grant or
giving for a cause to any organisation, farmers or group of farmers, industry, institute
and country.
Technology transfer is highly industry and technology specific. The preferred
mechanisms of technology transfer vary depending on the characteristics of the
technology being transferred, the industry involved, and the rate of technological
change affecting the industry at a time. For example, patent licensing is a critical
instrument of technology transfer in sectors where time to commercialisation is longer
(e.g., Biotechnology). However, patent licensing is relatively I~ss important in
microelectronics where current technology life cycle is short (Abramson, 1999).
Research publications, conferences, and movement of research personnel from
academic institutions and university to industrial research institutes and organisation
are important technology transfer mechanisms in biotechnology (Food, Agriculture,
Dairy) industry.
6.3 Mechanisms of technology transfer in CFTRI and NDRI
The separate surveys from each institute have revealed that the CFTRI has been
transferring technology through using following mechanisms to industry, institutions
and other users.
• Technical assistance from transferor to the private/public sector
• New Start-up ventures based on government funded research
• Extension programmes
• Formal exchange (written agreement) of non-patented intellectual property
techniques, skills, the 'art' of the practice, food compositions and ingredients.
163
• Cooperative and/or collaborative R&D between institute and the private/public
sector firms. In informal process the work is initiated out of mutual interest
without written agreements
• Formal dissemination of research results (e.g., conferences, semmars,
publications, trainings)
• Licensing of institute patents to the private or public sector
• Informal discussions and sharing .of research results and/or techniques with
transferees
• Sponsored Research projects
• Consultancy services and projects
Certain TTM such as science park, research park, technology park or incubators,
technology donations, and use of government funded facilities by Private-sector are
never adopted by CFTRI. Technology parks and incubator are proved to be good
mechanisms of technology transfer in literature on technology transfer from research
institute. In addition, a TTM like Personnel exchange or loan (researcher or faculty or
student on visit or temporary assignment to company or company technologist on visit
or temporary assignment to institute university}, which could have enhanced the
commercialisation of technology, is not applied.
The survey results suggest that NDRI has adhered to following TT mechanisms for
transferring technologies to users.
Formal dissemination of research results (e.g., conferences, semmars,
publications, trainings)
Extension Programs
164
- Formal exchange (written agreement, e.g., consultant) of non patented
intellectual property-- techniques, skills, the "art" of the practice, food
compositions and ingredients, etc
- Licensing of institute patents to the private or public sector
- Technical assistance from transferors to the private/public sector
- Science park, research park, technology park or incubators
- Cooperative and/or collaborative R&D between your institute and the
private/public sector firms: Formal: joint grants or agreements to perform
collaborative work
- New Startup venture based on government funded research.
The formal dissemination of results through training, extension programs, consultancy
and licensing are the most prominent among all mechanisms of TT. Agriculture
Technology Information Center (ATIC) has been developed which works as a single
window disposal system for all queries from farmers regarding scientific dairy
farming and milk processing. The institute follows the Customers approach in
Consultancy Cell as per their requirement. On the other hand, technical assistance to
public or private sector, incubators, and cooperative or collaborative research are the
sparingly used mechanism of TT in NDRI. However, there are certain mechanisms of
TT which are not in use by the institute, as following.
- Informal discussions and sharing of research results and/or techniques with
transferees
- Technology Donations
Cooperative and/or collaborative R&D between institute and the
private/public sector firms: Informal: work initiated out of mutual interest
without written agreements
165
Private-sector uses government funded facilities
Personnel exchange or loan (researcher or faculty or student on visit or
temporary assignment to company or company technologist on visit or
temporary assignment to institute university)
The mechanisms of TT are institute specific, as interviews and survey results suggest,
which have their origin in institutional structure, mandate, objective, area of research,
controlling rules and laws on TT, institutional culture, leadership in the institute,
attitude of scientists and researchers, opportunity for involvement of technology
developer and transferrer, firm's behaviour towards institute and it's technology,
available expertise on TT with institute, IPR policy, structure ofTTO, overall national
science and technology policy and available funding. The TT mechanism also
depends on interactions and communication between research institutes and
technology consumers. Technology transfer has good scope when both parties have
mutual beneficial situation. The TT is symbol of benefits to the parties engaged in
interaction, but after all it depends on effectiveness of TTM.
6.4 Effectiveness of Mechanisms of technology transfer
So far it is established that CFTRI and NDRI engaged in applying different TT
mechanism, which are mutually beneficial to institute and industry. When one turns to
study the relative effectiveness of various TTM then there is direct relationship of
effectiveness of mechanisms of TT with university, types of technology, nature of
sector, country, IPR and legal system, science and technology policies, and perception
of industry. According toM. Dalziel (1994), based on studies he has conducted, the
least effective (in order of descending effectiveness) TT mechanisms in universities in
Canada are university research chairs, licensing, seminars and workshops, "member"
company programs, and newsletters. Industry respondents consider licensing the
single least effective technology transfer mechanism. On the other hand, the most
effective mechanisms (in order of descending effectiveness) for TT are collaborative
research, university sabbaticals in industry, contract research, and industry visits to
166
universities, consulting, student projects and work terms in industry. Therefore, what
is the relative effectiveness of TTM in CFTRI and NDRI, based on analysis of survey
results?
6.4.1 CFTRI
The results of the study have reflected clear the effectiveness of the TTM on a scale of
5 relative ranks. The scientists, technologists and managers who are involved in
inventions, innovations, technology development, technology transfer and
commercialisation in CFTRI consider consultancy and technical services, contract
research and licensing most effective or excellent mechanisms of technology transfer.
These, three, methods are ranked on five scale, as results are shown in table 6.1.
Out of the twelve mechanisms presented to respondents from CFTRI, three are the
least effective mechanisms of TT (in CFTRI), which are, in descending orders,
university/institute research chairs, science parks, research parks, technology parks or
incubators, and technology donations. However, three TT mechanisms, such as
Contract research, Licensing, and Consultancy and technical services, are most
effective and excellent mechanisms, as supported by 100% respondents. They are
ranked most effective with weighted average 5 on effectiveness scale of 5. In
addition, collaborative research is also highly effective TTM with weighted average
4.67 on scale of 5. The remaining, mechanisms of TT, in descending order of
effectiveness, are Training, Extension Programs, Seminars, Workshops, Conferences
and Publication, Students Projects and Work Terms in Industry, and Exchange
program. The reasons and factors responsible for this relative effectiveness are
discussed later in section 6.5.
167
Table 6. I: Effectiveness of Technology transfer mechanisms in CFTRI
Ranked average summary Weighted Average Opinion/views
Consultancy and Technical Services 5.00 Excellent 100%
Contract research 5.00 Excellent 100%
Licensing 5.00 Excellent I 00%
Collaborative/] oint Research 4.67 Excellent 66.7%
Training 3.67 Good 66.7%
Extension Programs 3.33 Very good 66.7%
Seminars, Workshops, Conferences 3.00 Very good 33.3%
and Publication Good 33.3%
Fair 33.3%
Students Projects and Work Terms 2.67 Fair 66.7%
in Industry Excellent 33.3%
Exchange program 2.67 Very good 33.3%
Good 33.3%
Fair 33.3%
University/Institute Research Chairs 2.50 Good 50%
Fair 50%
Science park, research park, 2.00 Fair 100%
technology park or incubators
Technology Donations 1.50 Poor 50%
Fair 50%
Source: Survey analys1s by the author
Majority of the respondents are of the view that the student projects and work terms in
industry and university/institute research chairs are good TTM with weighted average
2.67 and 2.50 respectively. On other hand, I 00% respondents consider Science parks,
168
technology parks or incubators as fair mechanisms. The extension programs,
workshops, seminars, and publications are good TTM.
The evidence shows that the experience and area of expertise influences the views
about effectiveness of the mechanisms of technology transfer from the institute. The
respondents, who are scientists and working in TTO, view the exchange program,
extension programs, students projects and work terms in industry as very good
mechanisms for successful technology transfer. Whereas, management background
experts, who are involved in TT process and office, consider extension programs and
students projects and work terms in industry as not very good but fair mechanisms.
Further, exchange program perceived as poor technology transfer mechanism. The
CFTRI has less focus on dairy farmers. Therefore, it does not apply extensively the
extension program as TTM for transferring technology developed by its scientists. In
spite of that technology transfer office finds this mechanism very good mechanism of
technology transfer in the institute as opined by respondents.
6.4.2 NDRI
The same set of 12 TT mechanisms were presented to a sample of respondents which
was consist of scientists, business consultancy board members, administrators and
researchers from NDRI. The result revealed that the institute has not used some of the
TTM at all; the results are shown in table 6.2.
The most effective TT mechanisms among all for the NDRI are Collaborative/Joint
Research, Consultancy and Technical Services, Students Projects and Work Terms in
Industry, and Seminars, Workshops, Conferences and Publication. These four
mechanisms of TT are very good for successfully transferring the technologies to
industry and other users. However, out of the four, one TTM, collaborative or joint
research proved as excellent mechanism for NDRI with weighted average of 4.33 on
effectiveness scale of 5.
169
Table 6.2: Effectiveness ofTechnology transfer mechanisms in NDRI
Ranked average summary Weighted Average Opinion/views
Collaborative/Joint Research 4.33 Excellent 66.7%
Good 33.3%
Consultancy and Technical Services 3.67 Very good 66.7%
Students Projects and Work Terms 3.50 Good 50%
in Industry Very good 50%
Seminars, Workshops, Conferences 3.33 Very good 66.7%
and Publication
Science park, research park, 3.00 Very good 50%
technology park or incubators Fair 50%
Contract research 3.00 Fair 66.7%
Excellent 33.3%
University/Institute Research Chairs 3.00 Fair 50%
Training 2.67 Good66.7%
Fair 33.3%
Licensing 2.67 Very good 33.3%
Good 33.3%
Poor33.3%
Exchange program 2.67 Fair 66.7%
Very good 33.3%
Extension Programs 2.33 Fair 66.7%
Good 33.3%
Technology Donations 1.00 Poor 100%
Source: Survey analysis by the Author
Whereas other three out of four most effective TI mechanisms have effective
weighted average in range of 3.33 to 3.67 on effectiveness scale of 5. This view is
expressed by more than 66% of the respondents.
170
Similar to the case of CFTRI, the technology donation is a poor mechanism for TT.
This result emerged as a consensus view ofthe entire respondent from NDRI.
Extension Programs is a mechanism to transfer knowhow and knowledge to farmers
that is proved as a fair TT mechanism as believed by majority views. On the other,
minority 33.3% believe that it is good TTM with weighted average 2.33 on
effectiveness scale of 5. However, this has been second weakest TT mechanism
among all the twelve. In addition, exchange programme too considered as fair by
majority views with weighted average of effectiveness, 2.67.
The TT mechanisms such as Science Park, Research Park, Technology Park or
Incubators and Contract research have good effectiveness with weighted average of 3
on scale of 5. University/Institute Research Chairs is found to be fair mechanism
whereas remaining Training and Licensing are ranked as good mechanisms with
average effectiveness of 2.67. However, the licensing has not been very effective
mechanisms of technology transfer in NDRI, in contrast to CFTRI, as evidence
suggest.
The analysis of the survey results suggests that both institutes have been applying
different TTM at different preferences level according to their convenience and
available expertise. The certain TIM are not much successful and effective in both
the institutes-CFTRI & NDRI because of certain factors which are critical in
successful technology transfer. Further, the factors, which are important for effective
TT and commercialisation, as evident in literature and survey results, are discussed
hereafter.
6.5 Factors for successful Technology Transfer/Commercialisation
Technology commercialisation, in the context of the chapter, refers to the process
whereby inventions or IP from academic research is licensed or conveyed through use
of rights to a "for profit entity" and eventually commercialized (Friedman &
Silberman, 2003). The Successful commercialization requires significantly more than
a good idea or new technology. Developing a successful product requires, among
171
other things, effective management, strategy, timing, and marketing. In addition,
Coordinating among many organizations, some with widely varying missions, is a
significant challenge (Wang et al, 2003). Many countries in the world are embarking
on university reforms with a vision to augment the commercialization of the results of
publicly funded research (Slaughter and Leslie, 1997; Lehrer and Asakawa, 2004a;
Zhao, 2004) as India too a case. For example, many discoveries and inventions from
Australian universities have been lost offshore because they were not transferred
effectively to Australian industry (Zhao F, 2004). Policy makers are introducing these
reforms both through changes in the academic system and instruments for research
funding (Slaughter and Leslie, 1997; Benner and Sandstrom, 2000), as well as by
setting up structures to support such activities (Mian, 1997; Guston, 1999; Jacob and
Hellstrom , 2003). Policies are induced both top-down from the government and its
agencies, while other initiatives are emerging bottom-up from individuals and entities
inside the universities (Goldfarb and Henrekson, 2002).
For instance, the university systems in both Gennany and Japan have traditionally
been divorced from commercial interests and, indeed, relatively divorced from other
sectors of society (Lehrer M, 2004b ). It is argued, based on evidences that the success
of commercialization depends largely on general economic conditions and a culture of
innovation. The university affiliated incubators and university venture capital funds
are insignificant as far as their influence on the university technology
commercialisation process is concerned (Kumar U et al 2006). In the study of the
success of Stanford University in technology commercialization, Fisher (1998), points
out that success in university technology commercialisation is not solely dependent
upon the availability of funds or the university policies and strategies, but also on the
university's surrounding community's entrepreneurial climate and its own inherent
fertility. It is found that the two issues are significant to enhance the technology
commercialisation in Australian universities. The first is adequate financial support
from governments, industry and other stakeholders. The second is effective
innovation management with academic entrepreneurship. Academic entrepreneurship
means that academia takes the role of entrepreneurs to accelerate the generation,
172
dissemination and application of innovative ideas. Academic entrepreneurship is a
necessary practice and principle to tum scientific breakthroughs and technological
achievements into industrial and commercial successes (Zhao F, 2004). Further,
Flannery et al (2006) have added that university/business collaboration, general
university business practices, organisational characteristics, resource networks,
innovation speed, and technology selectivity and support processes are the key factor
in commercialisation efforts in universities.
There are certain factor identified as crucial during the interviews with scientists&
technology transfer officials and survey of literature for successful commercialisation
of technology. In addition, the major factors which affect to successful Technology
commercialisation (TC) in both the institutes-NDRI and CFTRI, are deliberated
henceforth.
6.5.1 Institutes-Industry Partnership
Public-private partnership and industry involvement is particularly important with
regard to applied R&D, wherein there has to be a focus on reaching the outputs and
technologies developed to the marketplace in India (Strengthening academic industry
interface working group report, 11th Five year plan, 2006). Strong incentives for
industry-university research collaborations resulted m successful product
development and technology transfer (Young, 2000). An increasing number of
strategic partnerships/relationships, as a factor, with industry have firmly placed the
universities or publically funded Institutes at the centre of commercial technology
development and transfer (Siegel et al., 2003)
The partnership between industry and R&D institutes is significant for successful
commercialisation of developed Technology and determining about kind of
technologies required by users. Public R&D institutes have to establish early linkages
with industry in developing new technologies in order to prevent from emergence of
unrealistic expectations about the market potential and the success of technology
transfer process. Ifboth of the partners are involved in developing the technology then
there is a greater possibility for developing the technology which is having good
173
commercial impact (Katz and Martin, 1997). In India, technology development in
public R&D institutes is pursued for its inherent scientific value and is investigator
driven. Its research mainly focuses on long-term radical innovation processes.
Commercial success and market needs have traditionally been of little concern
(Mohan R S and Rao R A, 2005).
The three models, as suggested in literature, of interaction of R&D institutes and
industry are Classical, Market, and Partnership Model, as presented in table 6.3. The
model for successful commercialisation and efficient technology transfer can be
arrange in ascending order of their successful results as Classical, Market and
Partnership Modal.
Table 6.3: Classification of institute-industry interaction
Model Vision Strategy Management Relationship
Industry
Classic acquires Technology Researcher defines Researcher
model developed push research lines
technology
Planned
Market needs Researcher. programme was Market
guide Market pull Gets feedback established model
research from industry knowing market
requirements
Balance
between Partnership
Strategic industry needs Both partners Symbiotic model
and market
needs
Source: Mohan R S and Rao R A, 2005.
174
The publically funded research institutes- CFTRI and NDRl have a different kind of
partnership with industry for development and transfer of technology.
NDRI often follows the classical model of interaction with industry where Industry
tries to get access to know how and technology in non-partnership mode without
paying any cost to such knowledge or technology. The technology development
projects and research plans are devised and undertaken by researchers without
comprehensive involvement of the industry. Researchers define the research line and
do not strive for or expect any feedback from industry or marketplace. However, the
consultancy board at NDRl has been involved in consultancy and it gets feedback
only from those who come for service to the institute. NDRl has been involved in
'technology push' strategy for partnership between institute and industry. Evidence.
and response from experts and researchers suggest that it has affected the capability of
NDRI to transfer the technologies it has developed.
CFTRI usually follows a mix strategy of interaction with the industry to sell its
technologies developed by the scientists without much involvement of industry in
planning and managing the technology projects. Scientists do not have any visiting
postings in the industry; therefore, they do not have any direct face to face experience.
But CFTRI has more professional approach making any kind of interaction with
industry only through technology transfer and business development department.
6.5.2 Stake Holder Involvement
The stakeholders of technology have varied role in transfer (commercialisation) of
technology from University to users. The technology transfer process typically
involves a variety of players, from transferors who create the technology and prove
the concept, to those who embed the technology in a useful product, service, tool, or
practice, and finally to transferees, who embrace it, further develop it, commercialize
it, and ultimately use it.
The Ama Drum project clearly shows that many factors affect whether a new
technology is accepted and used, not just the technology itself. Selecting a partner
175
with the right capacity and training is crucial. So is involving the right local
stakeholders from the start. These should include a local government structure or non
government organisation that knows the social dynamics and that can help make the
technology sustainable (Khungeka, N, 2009).
The evidences suggest that stake holder involvement is not at encouraging level in
both the institutes-NDRI and CFTRI, on all issue related to technology needs
assessment, technological planning, technological development, prototype
development, and product development. The low level of participation of the industry
in research and development in partnership with the researcher from the concerned
institute has resulted in a gap in technological needs of the industry and supply
capability of the institutes. Therefore, the argument that level of stakeholder
involvement with the R&D institutes funded by the government has a significant
impact on level of commercialisation of technology is approved.
6.5.3 Technology transfer office (TTO)
The TTO is a major factor in successful technology commercialisation from research
institutes or universities. The TTO is established to reward, recruit and retain
faculties, to facilitate closure ties with industry, to promote economic growth, to
commercialise the research for public good- the product that may not otherwise exist,
and in the process, generate resources for additional research and education (Hsu &
Bernstein, 1997; Rogers et al., 2000; Allan, 2001).
The establishment of more than 200 technology licensing offices in US universities
have been factors for successful technology transfer and presently every major
research university in US has a TTO (Rogers et al, 2000; Allan, 2001 ). In the UK,
technology transfer has attained success through making availability of early stage
(seed com) funding and financing of university technology transfer staff staff in some
UK university technology transfer offices. Besides this, other aspects such as the
structure of TTOs, management and skill of the employees of the TTO are important
for commercialising the technologies. (Deeter M et al 2007).
176
Indian university system does not have their own TTO and trained skilled manpower
that can make successful to technology commercialisation from concerned institutes
or universities, as the evidence suggest. For instance, URDIP's Patestate is the
window into CSIR for access to its technology and skills. The Patestate team works
with the CFTRI and other CSIR laboratories to develop technology development
contracts, licenses or sell these intellectual assets. Patestate team assists in finding
best commercial use of the technology, in selecting potential customers and
negotiating agreements.
Where as, in case of NDRI, consultancy servtces board has been established in
pursuance of the technology policy of Govt. of India. The policy lays stress on the
development of indigenous technologies and their effective transfer to industry. The
Board facilitates transfer of technologies developed the researchers and scientists in
NDRI. The institute has signed a memorandum of understanding (MOU) with
national research development corporation (NRDC) for patenting and
commercialisation of its technologies.
Further, as evidences suggest that the TTO or consultancy board have crucial role in
commercialisation of technologies. Lack of strong TTO in NDRI affects the level of
technology commercialisation. There is strong view among researchers that NDRI
should develop this office with best talent in technology transfer, commercialisation
and technology management.
On the other hand, CFTRI has a Technology Transfer and Business Development
Department (TTBD) headed by a management background person. It consists of other
scientists who deal with different aspects. TTBD is proved to be strong factor in all
the technologies commercialised in recent time by the CFTRI. TTBD help the
technology developers to shape the technology for the market needs. It communicates
all needs and concerns of the food industry and available technologies for
commercialisation with institute to respective enteritis. Therefore, TTO ts very
important factor for commercialising technologies from the R&D institutes.
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6.5.4 Sharing of Royalty
The sharing of royalty with creator of technology has been a maJor factor for
successful technology transfer world over. It is argued here that sharing of royalty
with creator in research institute is a factor in commercialisation of technology. Under
the provision of the Bayh-Dole act, a percentage of royalty income must be shared
with the investor(s). Each university can set its own royalty sharing arrangements. At
Stanford, after 15% is set aside for the operations of the licensing office and for
certain programmes, the balance is shared 1!3rd with inventor(s), l/3rd with inventor(s)
department, and 1/3rd with the inventor(s) school. There is no upper limit on the
amount shared with Stanford inventor(s), and a few have received millions of dollars
from licensing of their inventions. Some universities have the percentage given to the
inventor(s) change as the total amount reaches certain levels, or may set at threshold
amount after which no payments are made to the inventor(s).
The government of India has taken initiative, after realising necessity of royalty
sharing, to bring out a law on intellectual property generated out of publically funding
and publically funded research universities and institutes. The government has
prepared a bill to introduce in Rajya sabha, named as "the protection and utilisation of
public funded intellectual property bill, 2008". A bill to provide for the protection and
utilisation of intellectual property originating from public funded research and for
matters connected therewith or incidental thereto. The proposed bill has the provision
under section 11 subsections! for sharing the income or royalty arising out of
publically funded intellectual property as, not less then thirty per cent (30%) of
income or royalties, after deducting the expenses incurred in protection and utilisation
such intellectual property, shall be given to the creator21 of intellectual property.
The provision for sharing of income, with creator, generated out of licensing the
technology will help in enhanced level of technology transfer in India. When such law
was formulated in US the critique of the law had argued against it and its objective.
21 "Intellectual property creator" means the person employed or engaged by the recipient for research and development and who created the public funded intellectual property.
178
However, the law has been proved highly successful in US. At present the existing
gap in sharing of royalty provision in India will be filled by the protection and
utilisation of public funded intellectual property bill, 2008.
In India it has been realised this fact that sharing of royalty certainly affects the
commercialisation of the technology. The survey on NDRI and CFTRI, specifically
pointed out that sharing of royalty or license fee with the intellectual property or
technology creator affect the TT. Presently, both the institutes do not have a clear
formula, as in US universities, for sharing such royalty with faculties or researchers.
Therefore, majority of scientists, who are researchers and involved some point of time
in research, have responded that provision of sharing of such royalty with creators
could enhance technology transfer. Whereas, the management background
individuals, who are not involved directly in research, are of the opposite view.
6.5.5 University top management and academia
The top management and academia along with culture of the university determines the
level of commercialisation of technology. The knowledge and skills of Academia
have key role to foster a supportive structure to commercialize innovative research. It
is further determined by the required commitment from the top management of
universities, the alignment of a university's strategic plan with research
commercialization, the enhancement of an entrepreneurial culture in universities, and
reform in reward systems in universities (Zhao F., 2004). The culture within Indian
universities for commercialization has not developed to a level that is necessary to
stimulate and facilitate increased transfer of knowledge to business and society.
The evidence suggests that culture of the institute and top management affect the
technology commercialisation in both the institutes-CFTRI and NDRI. The CFTRI
proved to be more professional in approach for technology transfer or interaction
between industry and scientists or TTBD. There, in CFTRI, all information is
considered important as an intellectual property whereas in NDRI the industry gets
information as well as knowhow on resolving certain technology related problem
through personalised relationship. There is a culture of personalised relationship and
179
old students' affiliation or closeness to scientists and faculties, to get access to
technologies and information, which is crucial for problem solving, in NDRI. This
culture affects negatively to create importance of institute and consequently, institute
is taken as granted. Therefore, the industry is not ready to pay the cost of the
technology when it gets some important inputs in informal ways rather in business
professionalism.
6.5.6 Policy and Regulatory Scenario/Environment
The regulatory system is significant for technology transfer. The policy regimes for
technology transfer got stimulus with the legislation of US Bayh-Dole Act of 1980. It
entitles to inventions, made with US Gov't funding, by Universities to those inventing
entities (University/Institutes). Linear model of technology transfer confirmed
through the new law, as shown in figure below.
Figure 6.1: Linear Model of Technology Transfer
I .. Intellectual Research Disclosure ..
Asset 'I .,
Development
"" ,..
Intellectual 4..,_ Commercia liz
""' Property ation
censes & start ups i...--- Strategy , Protection Li
Source; Louis P. Berneman, 2000
University policies revised to assert ownership in all faculty inventions. In contrast, in
the UK, university to business technology transfer has only recently been the focus of
The Bayh- Dole act has significantly contributed in the university patenting and
licensing activity during, it essentially clarified the nature of the processes that need to
be in place to bring university technology into the marketplace (Kumar U. et al,
180
2006). It fostered the TTOs, hence realise the objective of Technology Transfer
(Rogers et al., 2000; Allan, 2001 ). On other hand, Bayh-Dole act may actually have
had a negative influence on the academic researchers' commitment to open science by
making them hold back their results (Mowery & Sampat 2005), but there is emerging
consensus on its remarkable results of the US act.
It is suggest by certain views that 1) while the Bayh-Dole act may have influenced the
propensity to patent; it has not resulted in any fundamental shifts in the underlying
generation of commercially significant inventions in the universities (Henderson et al,
1998). 2) Impressive rise in patenting post Bayh-Dole act can not be simply attributed
to the passing of the act alone, since other factors such as the maturing of new
research areas like molecular biology, microelectronics also contributed to this
significant shift (Colyvas et al. 2002)
In USA, it is largely accepted that this legislation has resulted in a widespread
involvement of universities in technology transfer (Deeter M. et al, 2006). Further, the
law has formed a basis for similar policy development across the whole world and is
widely treated as the defacto technology transfer legislation in the University or
publically funded research institute literature (Mowery & Sampat, 2005; Kumar U. et
al, 2006).
According to Japanese law, inventions arising under government-sponsored research
projects belonged to the nation; researchers had little incentive to see their discoveries
classified as National Inventions, which in practice was often "equivalent to the
technology slipping into a black hole" (Kneller, 2003). Therefore, the policy has
affected adversely to personal interests in technology transfer, hence whole
technology transfer. In Germany the intellectual property rights situation was not
much better, as the government was entitled to a varying share of revenues generated
from publicly funded research. Just as importantly, little infrastructure existed to help
scientists or their research institutions explore patenting options (Abramson et al.,
1997).
181
However, in case of India, government has prepared a bill to introduce in Rajya
sabha, named as "the protection and utilisation of public funded intellectual property
bill, 2008". This bill is meant to provide for the protection and utilisation of
intellectual property originating from public funded research and for matters
connected therewith or incidental thereto. This policy initiative on pattern of Bayh
Dole act has to be judged by its performance over the time. But, the prevailing
provisions in the service rules do not give freedom to scientists to set up commercial
entities while in professional employment with universities/public funded institutions.
Hence, the current condition discourages the hundreds of academicians, in India, to
become technopreneurs which could accelerate the process and speed of technology
transfer and commercialisation (Report of Working group on strengthening academia
industry interface, 2006).
The survey results suggest that present unfavourable service condition and lack of
legal environment and incentives always affect the TT in CFTRI and NDRI. Even the
existing regulatory system for patenting has motivated researchers to go for patenting
the findings and technologies, but that is not enough for acceleration of technology
transfer. Until the Bayh-Dole act patterned bill "the protection and utilisation of
public funded intellectual property bill, 2008" is passed by Indian parliament and
turned to an act, the process of IT continues to be slower and less effective.
6.5.7 Intellectual property rights
Bayh-Dole Act of 1980 has created a uniform IP Policy in US for the publically
funded research and its transfer. Bayh-Dole conclusion by Congress {US) that
Creativity is truly a national asset. The Bayh- Dole act is often credited with the
significant increase in the university patenting and licensing activity during the last
two decades as it essentially clarified the nature of the processes that need to be in
place to bring university technology into the marketplace (Kumar U. et al, 2006). The
patent system in US is the vehicle, which permits delivery of the resource to the
public. It is in the public interest to place stewardship of research results in the hands
of Universities. The existing US IPR laws were ineffective at a time when intellectual
182
property and innovation were becoming preferred global currency. Similarly, India
also has it own intellectual property laws.
India has strong patents system under TRIPS agreement obligations which consist of
Patents Act, 1970, Patent Rule, 1972, Patents (Amendment) Act, 2002, Patent Rule,
2003, Patent (Amendment) Rules 2005. The provisions for granting product patent in
all fields of Technology including chemicals, food, drugs & agrochemicals and the
Ordinance is replaced by the Patents (Amendment) Act 2005. The patent filing by the
institute has increased due to these laws but commercialisation could not be so much
successful. Therefore, a new law, as discussed in preceding section become apparent
to accelerate the process of TT from publically funded institutes as main factor.
Thereafter it protects and utilise the intellectual property created out of public funded
research and development for promoting creativity and innovation in India.
Over the years, the Government has invested large funds in research and
development. To provide incentives for creativity and innovation, it is necessary to
develop a framework in which the protection and utilisation of intellectual property is
put in place. The ultimate objective, however, is to ensure access to such innovation
by all stakeholders for public good. Further, the proposed legislation imposes
obligations and creates rights to optimise the potential of public funded research and
development, provides incentive to create intellectual property and the mechanism for
its protection and utilisation, encourages innovation in small and medium enterprises,
promotes collaboration between Government, private enterprises and non
Government organisations, commercialisation of intellectual property created out of
public funded research and development and the culture of innovation in the country.
Therefore, a vibrant IPR system affects the level of technological commercialisation
by research institutes in India. The survey results suggest that IPR system is an
important factor in the process of commercialisation of technology from CFTRI and
NDRI.
183
6.5.8 Spin-offs
Traditionally, the universities have looked at TC as essentially a licensing activity and
the standard practice ofTTOs (Kumar, U. et al2006, Siegel et al., 2003a, Siegel et al.,
2003b; Thursby & Kemp, 2002). The recognition being given to university SOs as
vehicles of TC is a more recent phenomenon (Di Gregorio & Shane, 2003). Di
Gregorio & Shane (2003) make a case that University Spin Offs are fast turn out to be
important medium for research commercialization. They account for roughly 12% of
the transfer of the university assigned inventions to the industry, and are highly
successful in it. In India an the oldest 5 IITs have institutionalised incubation and
entrepreneurship programmes. For instance, the Telecommunication Network Group
at the liT, Madras, which specialises in ICT-based telecommunications for
development, has incubated over 22 start-ups and liT Bombay incubated about 17
start-ups in the last five years (INNO-Policy TrendChart - Policy Trends and
Appraisal Report, 2008).
Society for Innovation and Entrepreneurship in Dairying (SINED) a Technology
Business Incubator is set up at NDRI, Kamal, funded by DST, ministry of science &
technology, Government of India. The SINED has potential for incubation and spin
offs in future. It has recently advertised to recruit the competent leader who must have
management background and experience in dairy industry along transfer of
technologies. One can not find the scenario of spin offs like IITs in NDRI because of
late realisation about the importance of incubator for an important institute in dairy
sector in India.
The survey results suggest that incubator is critical in commercialisation and transfer
of technology from NDRI to technology receivers. Therefore, the SINED is fulfilment
of this essentiality of the successful TC.
6.5.9 University venture capital funds:
University venture capital funds are not much significant as far as their influence on
the university technology transfer process is concerned. In their analyses of the
success of Stanford University in technology commercialization, Fisher (1998), points
184
out that success in university technology commercialisation or TT is not solely
dependent upon the availability of funds or the university policies and strategies, but
also on the university's surrounding community's entrepreneurial climate and its own
inherent fertility. However, university venture capital fund has important role in
setting up new companies by its students. The results of the survey suggest about the
importance of university venture capital funds in transfer of technology, but it is not
provided by the both the institutes-CFTRI and NDRI. Both the institute do not have
much experience in such provisions. Therefore, respondents are not sure about extent
of success and contribution to TT.
6.5.1 0 Financing and risk
The financial risk is the critical factor to be considered in technology transfer and it
can be decreased by sharing R&D cost and facilities. The conservative research
centers or university provide only low risk services such as constancy, technical
services and training courses, seminars and workshops for the industry personnel(Lee
J ·and Win H N, 2004). A number of researchers have highlighted the importance of
financial resources or assistance in securing access to sources of funding (Kumar, U.
et al 2006; Shane & Stuart, 2002; Samsom & Gurdon, 1993; Souder et al., 1990;
Goldhor & Lund, 1983). The academics suggest that the universities rarely provide
funds to the researchers to develop and commercialize their technology (Kumar, U. et
al 2006, Etzkowitz, 1998; Lee, 1996; Matkin, 1990). Therefore, researchers unable to
deal with issue of financial risk involved in TT and TC from university.
6.5.11 Attitude/interest/expectation of Firms
An interview with NDRI director revealed that most of Indian dairy firms employed
NDRI alumni who have regular interaction with the institute and its researchers. They
get to know solution and knowledge about technology through informal channel
rather through Technology Office or systematic technology transfer process.
Incremental innovations in certain Indigenous Dairy products are attained through
such mode of technology transfer. Personalised relationship plays key role in
accessing technological knowledge and free consultancy. There is deficit of
185
professionalism on part of faculties and researchers who expect least in exchange of
their knowledge with their own former students who are infact clients of their
intellectual property and innovations as representatives and employees of firms and
industry. Here the subject of concern is publically funded research out comes and
hand over that to right client at suitable cost within appropriate time in appropriate
context and shape.
Firms in Indian dairy sector try to get consultancy through personalised relationship
rather through institutionalised channels. There is dearth of confidence among Indian •
firms on Indian research institutes and their capabilities to provide solution when it
comes to the question of paid consultancies and transfer of know how and
technologies. Where as the scenario of CFTRI is just reverse, as discussed in earlier
sections.
The above discussed factors have varied role in transfer of technology. In addition,
the barriers of also are important to decide the success of technology transfer from the
research institutes. The barriers are discussed further in next section.
6.6 Barriers in transfer of technology by publicaiJy funded R&D
institutes
According to F. Zhao (2004) Australian Universities were unable to attain desired
outcomes in technology commercialisation due to shortage of funding, lack of venture
capital, adverse current taxation laws for start-ups, unwilling industry to collaborate
with universities, lack of entrepreneurial expertise and culture within universities,
insufficient time available for researchers to acquire such skills, lack of management
skills and efficiency. Further, in India, through interview of head and senior scientists
from technology transfer division of NDRI, it is revealed that scientists are not good
marketers and seller of technologies which they have developed. In addition, they are
deprived of skills and expertise on various ways of costing the technology means how
much they can charge from receivers of the technologies. They are good researchers
but lack salesman skills appropriate for TT at appropriate price to appropriate firm or
186
customer of technologies. They face lack of experience in negotiating the licensing
agreements, conditions, prices of technologies or prototypes, and consultancy services
at competitive level.
On the other hand, CFTRI has a different scenario and has advantage of being
supported by CSIR system. But while one see the results of survey that what CFTRI
scientists and management view about it.
6.6.1 CFTRI
The CFTRI confronts a number of TT barriers which become apparent through the
responses from respondents and analysis of such response pattern. There are, under
mentioned, certain TT barriers in descending order of gravity.
- absence of rewards/incentives for technology transfer activities
- More focus on patenting, not on commercialisation and licensing of the
technology
- Perception of University research being "too academic" or not readily usable
by the company
- Confidence level of the firm in the technology generated by the Institute
- No involvement of technology transfer officers in product development
No freedom to negotiate/price fixation /project identification etc and too many
procedures in project approvals
- information gap between potential buyers of technologies to technology
transfer office
- Lack of risk taking abilities in firm
- University research is not ;synchronised with industry's needs, either too early
to too late
187
- Lack of appropriate access of Industry to developed technological information
- Lack of legal permission/provision to allow inventor or researcher to exploit
invention/innovations privately
- Existence of grace period between invention and patent application by the
inventor or any one else on behalf of inventor
- Lack of expertise in transfer of technology
- Lack of appropriate legal environment and incentives
The table 6.4 presents weighted average of five point Likert scale and response
pattern of respondents to different barriers ofTT in CFTRI. The 100% of respondents
are of the view that lack of rewards/incentives for technology transfer activities
critically impinge on TT as crucial barrier. One very important fact emerged in the
survey is that the more focus on patenting, not on commercialisation and licensing of
the technology, has dampened the scope for TT. It is proved by the 33.3%
respondents, who are scientists or do research in laboratory and remaining 66.7%
agree and strongly agree respectively. Indian scientists prefer to patent, but
commercialisation of such technologies is always secondary task.
Table 6.4: Barriers of technology transfer from CFTRI and its relative ranking of weighted average Ranked average summary Weighted average Respondents'
responses
Lack of rewards/incentives for 4.33 Agree 66.7%
technology transfer activities Strongly
33.3%
agree
More focus on patenting, not on 4.33 Agree 66.7%
commercialisation and licensing of the Strongly agree
technology 33.3%
Perception of University research being 4.33 Agree 66.7%
"too academic" or not readily usable by
188
Ranked average summary Weighted average Respondents'
responses
the company Strongly agree
33.3%
lack of information about potential 4.00 Strongly agree
buyers of technologies to technology 33.3%
transfer office Agree33.3% Agree nor disagree 33.3%
lack of risk taking abilities in firm 4.00 Strongly agree
50% Agree nor disagree
50% University research is not synchronised 4.00 Agree 100%
with industry's needs, either too early to
too late
lack of appropriate access of Industry to 3.67 Agree 66.7%
developed technological information Agree nor disagree 33.3%
lack of legal permission/provision to 3.00 Agree 33.3%
allow inventor or researcher to exploit Agree nor disagree 33.3%
invention/innovations privately Disagree 33.3% Existence of grace period between 2.67 Agree nor disagree
invention and patent application by the 66.7%
inventor or any one else on behalf of Disagree 33.3
inventor
lack of expertise m transfer of 2.67 Agree 33.3%
technology Disagree 66.7%
lack of appropriate legal environment 2.00 Agree 33.3%
and incentives Strongly disagree
66.7%
Confidence level of the firm m the Scientists/researchers
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Ranked average summary Weighted average Respondents'
responses
technology generated by the Institute identified
No involvement of tech transfer officers TTO
in product development managers/officers
No freedom to negotiate/price fixation -do-
/project identification etc
Too many procedures m project
approvals
Source: Survey analysts by author
The Indian firms who are prospective customers of the technologies developed by the
CFTRI have their own perception about such technologies. Perception of University
research being "too academic" or not readily usable by the companies creates hurdle
in successful commercialisation of such developed technologies. These technologies
are not appropriately transferred to right customer at right place in right context
within right time. This hurdle has been ranked at weighted average of 4.33 on five
point Iikert scale which supports strongly to the stated position.
The scientists and researchers in TTO and laboratory have identified confidence level
of the firm in the technology generated by the Institute as an influence that upset
technology commercialisation. On other hand, individuals who are involved in TTO
as managers or officers strongly believe that they should be involved in product
development because they assume that they know better about the needs and demands
of the customers e.g. firms. Non involvement of technology transfer officers in
product development becomes strong barrier in successful TT.
There is consensus among all the respondents that University research is not
synchronised with industrial needs, either too early to too late. Therefore, there is
always gap between demand and supply. Equally, respondents have supported that
there is lack of information about potential buyers of technologies to TTO. The TTO
is unable to bridge the gape of such critical information between institute and
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industry. It clearly indicates the shortage of capability of TTO for efficient TT and
TC.
The TTO has crucial role in TT and technology commercialisation (TC). The
independence of the TTO management in negotiating prices and project identification
shape the process TT. No freedom to negotiate/price fixation /project identification
has an effect on TT in CFTRI, as revealed by TTO. This condition in institute is an
indication of less contribution of technology transfer and management skills to realise
the objectives of TT and TC.
The bureaucratic system makes the whole process of TT and TC much less effective
because of its lack of flexibility, transparency and adoptability to innovations in the
system. As experts in TTO believe that too many procedures in project approvals in
CFTRI under CSIR considered as a major barrier in TT. But how many of these are
the barriers for TT in NDRI?
6.6.2 NDRI
The results of the study show that some of the TT barriers in NDRI are similar to
what CFTRI has been facing where as some other are different with degree of
effectiveness and severity. The table 6.5 has demonstrated the results of the study on
barriers in TT and their relative effectiveness.
Table 6.5: Barriers of technology transfer from NDRI and its relative ranking of weighted average Ranked average summary Weighted average Respondents'
responses
Lack of rewards/incentives for 4.67 Strongly agree
technology transfer activities 66.7%
Agree 33.3%
lack of appropriate legal environment 4.33 Agree 66.7%
and incentives Strongly agree
33.3%
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Ranked average summary Weighted average
Perception of University research 4.33
being "too academic" or not readily
usable by the company
lack of risk taking abilities in firm 4.00
lack of legal permission/provision to 4.00
allow inventor or researcher to exploit
invention/innovations privately
More focus on patenting, not on 4.00
commercialisation and licensing of the
technology
lack of information about potential 3.67
buyers of technologies to technology
transfer office
University research IS not 3.67
synchronised with industry's needs,
either too early to too late
lack of expertise m transfer of 3.67
technology
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Respondents'
responses
Strongly
66.7%
agree
Agree nor disagree
33.3%
Strongly agree
33.3%
Agree33.3%
Agree nor disagree
33.3%
Agree 100%
Strongly
33.3%
Agree33.3%
agree
Agree nor disagree
33.3%
Agree 66.7%
Agree nor disagree
33.3%
Agree 66.7%
Agree nor disagree
33.3%
Strongly agree
33.3%
Agree33.3%
Ranked average summary Weighted average Respondents'
responses
Disagree 33.3%
lack of appropriate access of Industry 2.33 Strongly agree
to developed technological 33.3%
infonnation Agree nor disagree
33.3%
Disagree 33.3%
Existence of grace period between 2.33 Agree 33.3%
invention and patent application by the Agree nor disagree
inventor or any one else on behalf of 66.7%
inventor
Less practicality of technology Scientists/administrator. -
developed to the user's situation. identified
Industry is not than keen in buying the Scientists/researchers -
technology but want all kinds of know identified
how without judicious spending.
Lack of willingness on the part of the -do- -
industry to spend money on
technology
Inadequate refinement of technology -do- -
to meet the needs/expectations of the
user industry
Source: Survey analys1s by author
The outcomes of the survey administered on scientists, researchers and technology
management experts in NDRI has revealed following barriers in TT by NDRI.
- Lack of rewards/incentives for technology transfer activities
- lack of appropriate legal environment and incentives
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Perception of University research being "too academic" or not readily usable
by the company
lack of risk taking abilities in firm
- lack of legal permission/provision to allow inventor or researcher to exploit
invention/innovations privately
More focus on patenting, not on commercialisation and licensing of the
technology
lack of information about potential buyers of technologies to technology
transfer office
University research is not synchronised with industry's needs, either too early
to or too late
- lack of expertise in transfer of technology
lack of appropriate access of Industry to developed technological information
- Existence of grace period between invention and patent application by the
inventor or any one else on behalf of inventor
Gap between the technologies developed and demand of users.
Industry is not than keen in buying the technology but want all kinds of know
how without judicious spending.
- Lack of willingness on the part of the industry to spend money on technology
- Inadequate refinement of technology to meet the needs/expectations of the
user industry
The lack of rewards/incentives for technology transfer activities, lack of appropriate
legal environment and incentives, and Perception of university research being "too
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academic" or not readily usable by the company are the strongest barriers as felt and
agreed by the respondents. These barriers have weighted average between 4.33 and
4.67 on scale of 5 which is supported by 66.7% of respondents. It implies that
institute has faced a gap between industry's perception and expectation about the
technologies developed by the institute and real deliverance by the NDRI. The
industry has lack of willingness to spend on technologies developed by the institute's
scientists and readily available with consultancy board for transferring.
On the other hand, some TT barriers are of moderate to slightly stronger level which
consist of, in descending order of severity of constraints, lack of risk taking abilities in
firm, lack of legal permission/provision to allow inventor or researcher to exploit
invention/innovations privately, and more focus on patenting rather than
commercialisation and licensing of the technology. All the three barriers have
weighted average 4.00, supported by more than 66% respondents.
The fact has come out that NDRI does not have expertise in TT due to lack of skilled
and trained man power with consultancy board which is responsible for TT.
Therefore, lack of expertise in transfer of technology in the institute is a major barrier;
the fact is supported by more than 66% of responses. In addition, lack of appropriate
access of Industry to developed technological information has created a gap between
industry and institute. Low level of interaction with industry has further adds the
severity to this TT barrier. The industry is not timely informed of the technologies
under development and developed by the scientists of NDRL This further makes
industry disinterested in such technology because they never participate in
improvement of any technology which is being used by the industry at that time. Until
the industry participate in sharing and developing information and knowledge source
about technology, the technologies are likely to get delayed in transfer or remained
non-transferred.
The scientists, at NDRI, who develop technology as well as individuals who are
responsible for technology transfer in ITO are incompetent in calculating cost of
technology, fixing price and valuing the innovations. The questions like: How much
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charge/cost of the innovation, invention, technology, prototype etc? , are most
difficult to answer.
The consultancy business board (CBB) is headed by, most of the time, the head of
dairy technology division of NDRI or some time by Head Dairy Engineering who do
not have any fonnal training in technology transfer and technology management. The
job of technology transfer needs a comprehensive training and experience m
technology transfer and management. Therefore, it becomes barrier for TC.
CBB in NDRI do not have any training programmes for scientists and researcher on
issues related to successful commercialisation of technology. Further, even, it does
not have skilled trainers who can plan for such programmes for future successful
technology transfer. Such dearth of competencies posed as an obstacle to successful
technology transfer.
6. 7 Requirement for successful technology transfer
The successful transfer of technology requires certain conditions to be presented in
the scenario of the technology transfer. University-Industry interaction is desirable for
TT, as all strongly agreed on it. Technology Transfer requires continuous
communication between technology developer (institute) and receiver (firm,
individual, organisation, and farmer). 100% respondents from CFTRI have strongly
agreed with this view wherein communication decides the level and success of the
technology transferred.
Technologies developed through joint projects and partnerships have highest
probability and success rate of technology transfer from CFTRI. The joint projects
have involvement of partners and work on principle of sharing of responsibility,
profit, and risk. This position was taken by 100% respondents from CFTRI that the
technologies should be developed through partnerships and joint projects so that they
can be transferred with maximum success. Equally supported, Interaction of
universi~ researchers/ academics and industry enhance the success of technology
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transfer. The technologies, developed by the research institute and information about
them, are transferred through interactions among academics and industry.
Further, Researchers need to increase contact and interaction with technology clients
(industry, farmers etc) for enhancement of technology transfer. It has received
consensus that higher level of contact and interaction with clients of technology help
in understanding about their needs. 66.7% of the 'total respondents strongly agree
with this view.
Successful processes and mechanisms of technology transfer vary from one sector to
other sector as well as from one institute to other. The institutional culture and setting
plays crucial role in deciding efficiency of mechanisms ofTT. Administration ofTTO
and its openness to discussion about the disclosures of innovations and inventions
varies from one institute to other. Dissemination and TI strategies are different in
NDRI and CFTRI, which can be differentiated at first interaction and approach to TT.
The licensing of technology depends on interaction of technology developer and
receiver. Therefore, the Geographical proximity of firms to university/institute
stimulates corporate patent/licensing activities, 100% respondents from CFTRI
agreed, in context ofTT by CFTRI.
The licensing activity generates revenue that is shared, in some cases, not shared in
other cases, among funding agencies, research institute, innovator/inventor/researcher,
and university. Sharing of royalty/license fee with researcher/faculty is essential for
attaining higher level of TT, as perceived and agreed by 66.7% of individuals from
the CFTRI. This majority consists of scientists who are involved in research and
technology transfer whereas minority opinion/views consist of management
background individuals. Hence, this finding assumes importance because, some how,
non-sharing of royalty/license fee, such provisions, discourage the researcher to take
up more activities ofTT. In other words, it may be argued that monetary inducements
are necessary to accelerate TT process.
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The research institute- NDRI has to overcome to its aloofness and isolation with
industry on sharing of information, partnership, creating confidence in industry about
its capabilities, marketing itself to industry and taking development of technology in
synergetic manner. The industry and publically funded research institutes need to
develop a strong interactive and communication channel through building a system of
technology transfer and incubation in terms of organisation. The information on
technology underdevelopment, developed, ready for transfer and commercialisation
and available capabilities and expertise must be made available through such office.
The industry needs to get motivated through serious efforts at part of institute.
6.8 Summary
Effective technology transfer is greatly facilitated by the close interaction of
individuals involved in the development, transfer, and/or application of technology. In
spite of communication revolution, technology transfer remains contact sports,
involving close interaction among individuals from universities, firms and
organsiations. Mobility of technical individuals among institutions is an important
facilitator of technology transfer.
Technology transfer is highly industry and technology specific. The preferred
mechanisms of technology transfer vary depending on the characteristics of the
technology being transferred, the industry involved, and the rate technological change
affecting the industry at a time. Research publications, conferences, and movement of
research personnel from academic institutions and University to industrial research
institutes and organisation are important technology transfer mechanisms in Dairy
industry. However, CFTRI has been using some these TTM.
Further, the mechanisms of transfers of technologies employed by CFTRI are
Licensing, technical assistance, Sponsored Research projects, Consultancy, New
Start-up ventures, Extension, Formal exchange, Cooperative and/or collaborative
R&D, Formal dissemination of research results (e.g., conferences, seminars,
publications, trainings), and Informal discussions and sharing of research results.
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Certain TTM such as science park, research park, technology park or incubators,
technology donations, Personnel exchange, and Private-sector uses government
funded facilities are never adopted by CFTRI.
On the other hand, formal dissemination of research results (e.g., conferences,
seminars, publications, training), extension, Jicensing, technical assistance, incubators,
cooperative and/or collaborative R&D between NDRI and the private/public, and
New Startup venture are some of the important TTM employed by the NDRI.
However, certain TTM are not used by the institute such as Infonnal discussions and
sharing of research result, Technology Donations, Private-sector uses government
funded facilities, and Personnel exchange.
The mechanisms of TT are institute specific, as interviews and survey results suggest,
which have their origin in institutional structure, mandate, objectives, area of
research, contro1ling rules and laws on TT, institutional culture, leadership in the
institute, attitude of scientists and researchers, opportunity for involvement of
technology developer and transferrer, firm's behaviour towards institute and it's
technology, available expertise on TT with institute, IPR policy, structure of TTO,
overall national science and technology policy and available funding.
The relative effectiveness of various TTM was measured in terms of relative ranking
on scale of 5. Contract research, Licensing, and Consultancy and technical services,
are most effective and excellent TTM for CFTRI. Additiona1ly, collaborative research
and Training are two more TIM which are highly effective for the institute. Final1y,
extension programs, seminars, workshops, conferences and publication are good
TTM.
The most effective TTM among all for the NDRI are Co1laborative/Joint Research,
Consultancy and Technical Services, Students Projects and Work Terms in Industry,
and Seminars, Workshops, Conferences and Publication. However, licensing is a
TTM with an average effectiveness.
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There are certain factors which have important role in transfer of technology, in case
of CFTRI and NDRI. There are some specific factors such as institute industry
interaction and partnership, stakeholder involvement, technology transfer office,
sharing of royalty, top management and institutional culture, policy and regulatory
system, spin offs, and attitude of firms toward research results.
Both the institute have been facing barriers for technology commercialisation. Some
of the important barriers for the CFTRI are absence of incentives for TT activities,
more focus on patenting and less on commercialisation and licensing, perception of
research as too academic, non risk taking behaviour of firms, constraints to negotiate
price, terms and condition of project, and information gap between technology buyer
and developer. NDRI has been facing some important barriers in TT like technology
transfer activities with no incentives, inappropriate laws and policy, low risk taking
ability of firms, patenting more focussed rather technology commercialisation,
information gap between buyers and supplier, and lack expertise in TT.
Technology transfer can be enhanced in both the institutes through more industry
institute interaction, sharing of royalty, taking up more joint projects and partnerships
and constant communication.
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