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ASAC 2008 Halifax, Nova Scotia

TOWARDS DEVELOPING A COMPREHENSIVE MODEL OF TECHNOLOGY TRANSFER TO DEVELOPING COUNTRIES:

A COMPARATIVE ANALYSIS APPROACH

The main objective of this study is to better understand the process of International Technology Transfer (ITT) by bringing together more than 30 years of work in the development of ITT models. Based on the strengths and weaknesses of the models presented, a comprehensive process model of ITT has been developed.

Introduction

Technology Transfer (TT) is certainly not new to the business world. It has existed and persisted for centuries. In the past two to three decades, due to an increase in ITT and the increased interest of academia, a considerable amount of literature has been published in this area. Our understanding of the different dimensions of TT has matured thanks to the accumulation of studies in this area. Some of the dimensions of TT include, but are not limited to, TT among developing countries, TT among developed countries, TT from developed to developing countries, TT from university to government, and TT across industries. This study is mainly concerned with ITT from developed to developing countries. From this perspective, TT refers to the transmission, revision, implementation, adoption, adaptation, absorption, and diffusion “of such accumulated knowledge and know-how that are actually put to productive use” (Erdilek, 1985; Medcof, 2007).

The process of ITT has been studied in a variety of contexts. Based on the review of more than 200 academic articles, we have identified 14 TT models that describe the process of ITT from developed to developing countries. These models have been chosen because they address the concept of TT in a way that provides a strong foundation for development of a comprehensive model of the ITT process that was used in the present study. Most of these models have been presented from the point of view of TT to developing countries. The following section consists of the discussion of the 14 models of TT chosen from the available literature. In section 3 of this study a comprehensive model of TT is developed based on the analysis of the strengths and weaknesses of the ITT models presented in section 2. This comprehensive model takes into account the critical steps necessary for effective TT to developing countries.

Models of ITT from Developed to Developing Countries

In this section, 14 ITT models that view the transfer process from developed to developing countries are discussed. The weaknesses and strength of each model is also presented. In the last part of this section a summary of all presented models is provided.

Bahar Movahedi (student) Uma Kumar

Kayvan Lavassani (student) Eric Sprott School of Business

Carleton University

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Teece’s Model

According to Teece (1976), the path to transfer begins when a need or a potential need for a particular type of technology is recognized and a feasibility study is conducted to determine if a project is acceptable on some criteria (e.g., profitability). Teece’s model of ITT is restricted to horizontal transfers in the design phase. Teece (1976) divides the process of TT into four major stages. The first stage is identified by the transfer of key elements of the process or the product design. If the recipient firm has been familiar with the technology, the transfer of information related to the technology may not be required. The second phase involves activities such as engineering, design, and production planning. The third phase is identified by the construction, tooling, and installation of the manufacturing facilities. Finally, the fourth phase is characterized by “the manufacturing start-up or bringing the plant on steam,” which is measured according to the design or expected productivity level. This stage can involve activities that relate to human and machinery considerations. These activities will appear in the training of operatorsand/or the alternation, adjustment, dismantling, and replacement of unsatisfactory equipment.

Teece’s model recognizes the importance of the assessment stage in the ITT process; however, his four-stage ITT model is basically focused on the implementation phase of TT. Although limited aspects of adoption and assessment are addressed in Teece’s model, the model fails to recognize the negotiation, absorption, and long-term development stages. The main strength of Teece’s model is the recognition of the implementation stage at an operational level.

Holliday’s Model

Holliday (1979) examines the experiences of the developed and developing countries in importing foreign technologies. He divides the TT process into two phases: (1) the initial planning and purchase of technology and (2) the absorption of technology. Holliday’s definition of these stages is based on the recipient’s standpoint and on the fact that the absorptive level of imported technologies of a given country depends on indigenous technology capability. The first phase of Holliday’s model – the initial planning and purchase of technology – includes choice of technology, selection of transferring mechanism, negotiation of contract, and financing. The second phase – absorption – includes design and adoption, construction and installation, training, and domestic diffusion. The two phases are interrelated in a manner in which given solutions to the problems in the initial phase to a large extent predetermine the kinds of policies and instructions that must be employed in the second phase.

Holliday’s model is a relatively comprehensive model that identifies several activities during, before, and after the implementation stage of the TT process. However, this model fails to distinctively address the assessment and adoption stages, and its description of the long-term development stage is merely limited to the diffusion of technology. In addition, Holliday’s interpretation of the concept of technology absorption is different from the definition we use in our proposed comprehensive model of TT presented in section 3 of this study. Holliday considers the absorption of technology as activities that involve the implementation and adaption of technology, while evidence from the empirical studies done on TT to developing countries show that adoption and absorption do not necessarily follow the implementation stage of the TT process.

Madu’s Model

Madu (1989) proposed a process model for TT to less developed countries. He argues that TT is a process of varying degrees of review and evaluation. According to Madu (1989), the process of TT begins with identifying the active participants in decision-making and needs recognition. This step is followed by an evaluation of the existing technology and its limitations in achieving the transfer goal/s, the selection

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of the technology that is to be transferred, the definition of standards to measure the success or failure of the transfer process, an evaluation of the adoption and the implementation of the technology selected, and the establishment of the mechanism to evaluate the transfer process (Madu 1989). It is important to note that Madu’s model was among the first ITT models to recognize the importance of an evaluation mechanism in the ITT process. However, Madu’s model offers no explanation of the definition of success except that long-term economic growth will be achieved through the ability to maintain and to fully utilize the appropriate technology. In addition, while Madu’s model of ITT identifies varying dimensions of assessment and negotiation, it pays little or no attention to the activities involved in the implementation and adoption stages. Moreover, the model fails to identify the absorption and long-term development stages of the ITT process.

Rouach and Klatzmann’s Model

Rouach and Klatzmann (1993) illustrated ten essential phases in the ITT process; their model provides one of the most comprehensive models of the TT process that focuses mainly on the pre-implementation stages of ITT. The first stage involves a self-assessment by the potential issuer of technology. The firm conducts a formal or informal assessment of its characteristics, resources, and strategy. In terms of characteristics, the firm will distinguish its size, history, products, markets penetrated, competitive situation, profitability, and autonomy from other firms. It will also examine its resources including financial, human, managerial, and technological or know-how. This will involve considering the motivations of the firm’s leaders, the company’s long-term goals, and the desired development strategy of the firm. Once the firm has conducted this extensive analysis, the second stage for the issuer is to decide to exploit its technology or know-how by entering the international market. This can be a difficult decision to make, but performing the thorough assessment described in the first stage will assist the issuer in making an informed choice. After the decision to enter the international market is made, the third stage begins. In this phase of the process, a more detailed assessment of the technology or know-how that the company is seeking to market is made. This will mean examining at least five different aspects of the technology: 1. content (patents held, brands, processes, and know-how relevant to the technology) 2. technical characteristics (its level of sophistication, specialization, and integration with other technologies) 3. economic traits (capitalistic intensity and possibility for obsolescence) 4. competitive aspects (facility for distribution and competitive advantages) 5. the character of the transfer (ability to accomplish the physical transfer and adaptability). In effect, the entire content of the technological package is identified and the overall costs of transfer are weighed.

In the fourth stage, the technology proprietor chooses target countries. The proprietor will observe many critical national features such as: the economic environment, the politics and policies, the monetary and financial status, the regulatory and institutional framework, the social system, and the culture of the target country. After this stage, the proprietor will have to decide what type of arrangement to use, whether a licensing arrangement, a franchise, a joint venture, a turnkey contract, or some other approach. To make this determination, the technology proprietor will look at the following criteria: amount of capital invested, planning outlook, commercial risks, financial risks, economic/political risks, the potential of the domestic market, as opposed to foreign markets, maneuvers by competitors, firm-specific constraints such as size, performance, capacities, and strategy, host country constraints such as restrictive investment codes, high tariffs, and/or a proliferation of non-tariff barriers, and the characteristics of the potential technology recipient. The sixth stage is simply to finalize the choice of a host country and the type of agreement and to decide to begin implementing the transfer, based on the criteria studied in stage five. Once the recipient and type of agreement have been chosen, the transfer is initiated in the seventh stage. This includes performing detailed studies of eight specific areas: First, the sector in which the technology belongs is analyzed according to its production, import and export experience, capacity, and history. Second, the overall stream of commerce in which it will flow is analyzed. Third, the human

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environment is examined in terms of job market, cultural particularities, and government regulations. Fourth, the political environment is studied to determine risk factors. Fifth, a market and competition study is completed and a marketing strategy tailored to the results is outlined. Sixth, the firms analyze the intended industrial project by looking at the choice of technology, processes, equipment, production units, and training that will be needed. Seventh, a broader “pre-launch” study should be conducted, which needs to include details of investment cost/s and financial plans. Finally, if the specific recipient company within the targeted country has not yet been chosen, the choice of a company is made.

By the eighth stage, the parties are ready to negotiate and draw up a contract. Therefore, by the ninth phase, after the contract is negotiated, the general plan of operations is perfected and launched. The tenth and final stage is a follow up and permanent control of the project. Usually, there will be a feedback mechanism and established indicators to continually reassure the parties that operations are running smoothly and according to everyone’s expectations. The main strength of this model is exploring the different dimensions of the transfer process. However, this model mainly focuses on the pre-implementation stages and fails to describe the implementation, adoption, absorption, and long-term development stages of ITT.

Rogers and Gibson’s Model

Rogers and Gibson (1994) have identified five stages for the process of TT: (1) assessment, (2) agreement, (3) implementation, (4) evaluation and adjustment, and (5) repetition. Technology assessment and agreement call for shared responsibility between technology developers and users. Success occurs when a technology is transferred across personal, functional, or organizational boundaries and is accepted and understood by designated users (Rogers and Gibson, 1994). Implicit in these stages is the belief that successful TT is simply a matter of getting the right information to the right people at the right time. Typical mechanisms include technical consulting, good-practice schemes and manuals, exchange programs, and various grants and cooperative agreements in which work is undertaken to benefit both parties. The success of technology implementation is marked by the timely and efficient employment of the technology. Users should have the knowledge and resources to implement the technology. Technology repetition builds on the successes achieved in obtaining the objectives of the previous stages (Rogers and Gibson, 1994). Where hardware is concerned, such as structural technologies and monitoring equipment, successful repetition may require an industrial provider. In these cases, market strength is required. This model identifies the pre-adoption stages of ITT as well as an evaluation mechanism. However, the identification of these pre-adoption stages is at more of a general level than a detailed operational level. Moreover, Rogers and Gibson’s model fails to recognize the adoption, absorption, and long-term development stages of the TT process as the most important stages in the process of transferring the technology to developing countries.

Innovation View

Another way of looking at the TT process is by studying it with reference to the innovation process (Autio and Laamanen, 1995; Ambrosio, 1995). The innovation process view of TT investigates the flow of technology in the transfer process as a movement of knowledge required in facilitating the beginning of the next stage of innovation. From this perspective, TT starts in the implementation phase. Idea transfers, prototype transfers, and product transfers are seen as the buffers between the idea initiation, the prototype development and the commercialization, and the market diffusion stages of the innovation process. One point worth mentioning is that the innovation process view of TT essentially looks at the vertical movement of technology from one phase to another. However, the horizontal transfer of technology within a phase might also occur. In assessing this model it is important to note that the scope of this model does not include the whole ITT process, rather it is focused on the innovation

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dimension of TT. The main strength of this model is that it recognizes the detailed process of innovation. However, this model fails to address the importance of the evaluation mechanism, which is essential for successful innovation diffusion in particular and TT as a whole.

Szulanski’s Model

Szulanski (1996) has developed a generic four-stage framework to describe the various stages involved in a transfer process, including the transfer of technology. These stages are initiation, implementation, ramp-up, and integration. These stages are explained in the following discussion.

1. Initiation: This stage includes all activities that lead to the decision to transfer. A transfer begins when a need and the knowledge to meet the need coexist. The main motivation of firms in generating new leading-edge knowledge is either to strengthen the competitiveness of their shareholders in the long run or to solve their product problems. However, once the knowledge to meet either of these objectives is generated it is imperative that it is transferred to the shareholders so that they can utilize it to further improve the efficiency of their operations. Thus, the stage is set for the transfer after the knowledge is discovered. 2. Implementation: This stage begins with the decision to proceed. During this stage, resources flow between the recipient and the source. Transfer-specific social ties are established. The transferred technology is often adapted to suit the anticipated needs of the recipient or to pre-empt any problems that the recipient firms might face in adapting the new technology. 3. Ramp-up: The ramp-up stage begins when the recipient starts using the transferred technology. During this stage, the recipient is predominantly concerned with identifying and resolving unexpected problems that might hamper its ability to optimize the gains to be achieved from the transferred technology. The recipient is likely to use the new technology ineffectively at first, but it will gradually improve performance, ramping-up towards a satisfactory level. 4. Integration: The integration stage begins after the recipient achieves satisfactory results with the transferred knowledge and the use of the transferred technology becomes a routine part of the operation of the firm.

Szulanski’s model of ITT is mainly concerned with assessment, implementation, and adoption. While a strong balance of pre-implementation and post-implementation activities is presented in this model, one major weakness of this model is that the ITT process ends with completion of the technology adoption stage. However, in TT to developing countries, technology absorption and achieving the long-term development goals are the main milestones of TT (Kathuria, 2002; Awny, 2005).

Farhang’s Model

Farhang (1997) in his study of ITT to China presents a four-stage inter-organizational TT process that views the TT process as a bilateral dynamic relationship which includes the decisions of both the supplier of technology and the recipient of the technology. The process model has been developed based on the previous literature and includes the following four stages: the pre-negotiation stage, the negotiation stage, the TT and start-up stage, and the long-term development stage (Behrman and Wallander, 1976; Ford, 1980; Teece, 1976; Thunman, 1987). In the pre-negotiation stage, the primary long-term strategy of the multinational firm in the developed country is to increase its revenue and profit. The aim of the recipient party in the developing country may include acquiring advanced technology and up-to-date technical and/or managerial know-how, and developing R&D capacity. In the negotiation stage, issues differ from case to case, but usually both parties inform each other of their capabilities and resources, select and evaluate technology, and reach an agreement on price. The negotiation stage is influenced by the cultural, political, and technological diversity of the parties. The third phase consists of three types of activities: dissemination of documentation, transfer of technology, and training of the recipient country’s

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employees. The long-term development stage differs in terms of the perceptions of the technology donor and recipient and their criteria for success. Normally, both parties’ long-term mutual interests should overlap in such a way that both feel their long interaction has led to mutual gain (Farhang, 1997). Farhang’s ITT model fails to address the adoption and absorption stages of ITT – which are of great importance especially in ITT to developing countries – as well as the process of evaluating this mechanism. However, this model has some distinctive advantages, such as recognizing the bilateral dynamic relationship between the technology donor and the technology recipient, and recognizing many detailed multidimensional aspects of the ITT process at the operational level.

Baark and Heeks’ Model

In an analysis of the information TT process in Chinese firms, Baark and Heeks (1999) present a five-stage process model of information TT from the donor’s perspective. According to this model, the information TT process can be summarized into the following stages: choice of technology, purchase and installation, assimilation and use, adoption, and diffusion and innovation. During the first phase the technological requirements are identified, the various alternatives for a new technology are surveyed, and the decision for obtaining a new technology is made. The second phase involves the actual purchase of the hardware and software technology. This phase often includes some training and consulting in the installation. The main activity in the third phase is to ensure that people who work with the new technology fully understand how it works and how they can maintain it on a regular basis. In the fourth phase, the recipient alters the transferred technology. The reasons may be to improve existing functions, to add new features, or to match local conditions and needs. After the recipient organization masters the transferred technology, it can undertake the diffusion process to other organizations. This model has a unilateral view of the ITT process; specifically, the model is presented from the technology donor’s perspective. Therefore, it is not surprising that in the beginning of the ITT process there is no emphasis on negotiation and bilateral decision making. Also, the model takes into account few dimensions of each stage of ITT. For example, in the assessment stage the focus is merely on the assessment of the technology. In addition to the negotiation process, Teece and Heeks’ model of ITT fails to address the absorption and evaluation activities during the ITT process. However, one of the strengths of this model is the attention it gives to training and skill development during the implementation phase of the ITT

Kathuria’s Model

Kathuria (2002) has provided a seven-phase process model of TT to India as a developing country. According to this model, the various steps involving TT to developing countries are: 1. assessing needs 2. selecting technology 3. selecting the appropriate entry mode of TT 4. utilizing technology to its designed capacity and performance 5. adapting technology to specific local conditions 6. improving technology beyond its designed performance (e.g., capacity stretching and quality improvement), 7. developing new technology. It is important to note that in this model the selection of technology is a function of the resource endowments of a country. Kathuria (2002) emphasizes the importance of the fourth stage – utilizing technology to its designed capacity and performance – since empirical evidence shows that firms in developing countries do not tackle this issue seriously. The main strength of this model is the attention towards optimal utilization of transferred technology, technology adaptation – which is one of the main activities of technology adoption – and long-term development of technology; which are the main milestones in TT to developing countries. In this model, technology implementation and technology adoption are not distinguished as two separate stages of ITT, and, therefore, there is relatively less attention to the multidimensional aspects of these activities. However, the major drawbacks of this model are little attention to the technology absorption stage, and the absence of an evaluation mechanism in the proposed model.

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Rolle and Satin’s Model

Rolle and Satin (2002) have proposed a TT model for developing countries. Their model consists of five phases: assessment of the country situation, selection of an appropriate scale and level of technology, implementation, demonstration and dissemination of the technology, and facilitation of access to the technology. According to this model, in the first phase and prior to the transfer of any technology to a developing country, the capacities of the country must be thoroughly assessed. Items to be assessed are: 1. technical ability of the country (e.g., current processing and manufacturing practices within the host country, available supporting infrastructure, and the availability of transportation and road networks) 2. socioeconomic ability of the country (e.g., evaluating the level of management stability in organizations within the recipient country, cost and availability of labor, and consumer purchasing power) 3. institutional conditions must be determined (e.g., an evaluation of the level of education within the country, locally available skills and technical support services, and an assessment of the capacity for research and development within the country). These evaluations will determine the level and scale of the technology to be introduced.

In the second phase, attention must be given to the selection of an appropriate scale and level of technology within the context of the social and cultural practices of the country. Once an appropriate level and scale of technology is selected, it is usually essential to improve the technical, marketing, and business skills within the country in order to facilitate implementation and absorption of the technology and its products. Improvement in technical, marketing, and business skills of recipient firms can be accomplished by training through workshops, short courses, and demonstrations of the technology. Once the technology is adopted, it may be necessary to assist entrepreneurs in acquiring the technology and in developing both technology and product marketing plans. This model is one the most comprehensive ITT models in the literature. The main weakness of Rolle and Satin’s ITT model is the absence of an evaluation mechanism. Also, little attention is paid to the adoption and long-term development stages of the ITT process.

Putranto et al. Model

In a case study of ITT and distribution and development of local technology capabilities in Indonesian firms, Putranto et al. (2003) proposed a transfer model that focuses on upgrading the technology capability of the recipient firm in the developing country. The model encompasses four stages: the preparation stage, the production stage, the operation stage, and the evaluation stage. The preparation stage includes determination of the goals, identification of strengthens and weaknesses, assessment of managerial resources and infrastructure, specification of the technologies needed, search for and selection of the alternatives, evaluation, and negotiation. The second and third stages of production and operation are often considered as implementation stages in other models. According to Putranto et al. (2003), the production stage includes the activities linked to design and engineering, while the operation stage includes use or operation of the products resulting from the transfer process. The fourth stage – the evaluation stage – creates a feedback loop in a transfer process. In the preparation and production stages, the investment capabilities of the recipient firm can be upgraded. Subsequently, in the operation stage, the operational capabilities can be accumulated. Finally, in the evaluation stage, the dynamic learning capabilities of the receiver of the technology can be expected to increase. Although Putranto’s ITT model is one of the few models that recognizes the importance of an evaluation mechanism for a successful ITT process, this model fails to consider the assessment and negotiation stages of ITT model from both donor and recipient perspective. Moreover, in this model little or no attention is paid to the adoption, absorption, and long-term development stages of the TT process.

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Di Benedetto et al. Model

In their exploratory study of ITT to China, Di Benedetto et al. (2003) built and empirically tested an extension of the technology acceptance model (TAM) applied to the study of international product TT. The extended TAM21 is driven from the TAM of Davis et al. (1989), which has been used extensively in information technology applications to describe the antecedents to the adoption and use of information technology. The extended TAM in this study was built on the basis that a person’s attitude toward a behavior influences his or her intention to perform that behavior, and behavioral intentions influence the actual performance of the behavior. In their study, Di Benedetto et al. (2003) operationalized the concept of perceived ease of use employed in the TAM as two independent variables: technological compatibility and ease of adoption. Ease of adoption is operationally defined as the perceived effort required for adoption of technology, and technological compatibility is defined as the compatibility with the adopting firm’s existing conditions.

Di Benedetto et al. (2003) also operationalized the anticipated benefits of adoption in terms of the economical and technical benefits to the adopting firm. The authors conducted an exploratory empirical test for the extended TAM using a sample of respondents from different industries in China. They wanted to discover the direct and indirect effects of the above mentioned antecedents on attitudes toward the adoption of foreign-developed technology, and on behavioral intentions to adopt such technology by managers in developing countries. The findings of this study reveal that TAM is a useful model for understanding ITT, managerial attitude formation, and behavioral intentions leading to this transfer. The results also highlight the importance of perceived ease of use on managers’ behavioral intention to adopt new technology (as perceived by the extended TAM), rather than the significance of the perceived usefulness (as predicted by the original TAM). Ease of adoption and technology compatibility not only indirectly influence managers’ behavioral intention to adopt a new technology by influencing their attitude toward adoption, but also directly increases managers’ behavioral intentions. According to the findings of this study, when managers in overseas markets make decisions about adopting a new technology they are more concerned about their firm’s ability to learn and use the new technology than the actual benefits of that technology . Benedetto’s ITT model is, to some extent, different from the other ITT presented in this study, because it is merely concerned with the technology adoption aspect of ITT. As a result, little attention is paid to the assessment, negotiation, absorption, long-term development, and evaluation stages of the TT process. Also in this model the implementation and adoption stages are combined as a single stage.

Awny’s Model Awny (2005) provides the following steps for the effective transfer of technology: needs assessment, needs specification, technology selection, procurement, negotiations, implementation, and adaptation. However, Awny (2005) introduces additional steps recommended for the transfer process in developing countries: absorption of technology and development of technology. Absorption of technology includes understanding and absorbing hidden details of the technology (e.g., the know-how, tacit knowledge, and experience). Development of technology by developing countries means further modifying and developing the TT. Awny (2005) emphasizes the importance of the last two phases in ITT to developing countries. Awny’s ITT model is one of the relatively more comprehensive models of ITT. The main strength of this model is that it identifies different aspects of the assessment and negotiation stages. However this model fails to address the activities involved in the implementation, adoption, and evaluation stages of the ITT process.

21 The TAM model drives from the theory of reasoned action (TRA), a general model that describes the psychological antecedents of behavior.

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In summary, based on the process models of TT discussed in this section, it can be concluded that the TT process in developing countries is a continuous process that starts with the firm’s needs for technology and continues with achieving long-term development goals. Out of the 14 ITT models presented in this section, 12 models view the TT process from the operational perspective and describe a number of stages involved in the process of TT. However, only two of the 14 models presented in this section provide a more discrete approach than the other 12. The innovation view of the TT process is mainly focused on a single stage involved in the process of TT (e.g., the innovation and technology diffusion associated with ITT), rather than concentrating on all the stages of the ITT process. This model helped us to identify the diffusion of technology as one of the activities within the long-term development stage, which is the last stage in our proposed comprehensive model of the ITT process. The second of the models presented in this section, similar to the innovation view of technology, only concentrates on a single stage of the process model of TT (i.e., technology adaptation). This model is the technology acceptance model of ITT proposed by Di Benedetto et al. (2003). Another conclusion that can be drawn from the models presented in this section is that, except for a few models, almost all other models failed to recognize the absorption and long-term development of the technology as crucial stages in TT to developing countries. In addition, most of the models paid little or no attention to the importance of establishing an evaluation mechanism in the process of TT.

Proposed Comprehensive Model

After carefully reviewing the strengths and weaknesses of the models presented in the previous section, a comprehensive process model of ITT with a special focus on developing countries was developed. The following section describes the development and typology of our proposed comprehensive model.

Systematic analysis of the ITT process models

For a comparative analysis of the models that were discussed and to build the comprehensive process model, two factors were used: the stages of TT proposed in each model and the order of the stages. Many similarities among the previously mentioned models can be observed; however, considerable differences exist in the stages and also in the order of the stages. To provide a thorough comparison of these models, they were put together in a table to better show the similarities and differences that exist among the models. However, a common stage among all of the models was required as a base for comparing the models. A thorough review of these models shows that the implementation stage is a common stage among all of the models. In this comparative analysis, the point at which the implementation stage begins in each model was identified. This point was found to be after the assessment and negotiation for finalizing the agreement, and right before initiating the TT implementation stage. Therefore, in the proposed comparative approach of the previously discussed models, presented in Table 1, the activities are divided into two phases: Pre-Agreement Activities and Post-Agreement activities. The first column of the table represents the name(s) of the author(s) of each model. The key to Table 1 is provided after the table. The codes in alphabetical order represent the first letters of the author or authors’ name(s). The numerical order of the codes refers to the order of stages of a particular process model that was discussed. For example, Ho represents Holiday as an author, and Ho1 and Ho2 represent the stages of the model that he offers: initial planning and purchase of technology and the absorption of technology. Based on the definition of each stage, the stages of each model were assigned to the relevant category in the table (either pre-agreement activities or post-agreement activities).

In the next step of our analysis we explored the pre-agreement and post-agreement processes of ITT. Comparative review of the TT models presented in Table 1 shows that pre-agreement activities

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mainly focus on the assessment stage and issues that must be finalized in the negotiation process before starting the implementation stage. The main concern of post-agreement activities is on the implementation, adoption, absorption, and development of the technology. The comparison of models in Table 1 helps us to better understand the variations in the TT models that were previously discussed. For example, while Teece’s (1976) process model is mainly concerned with the post-agreement activities, Rouach and Klatzmann’s (1993) process model focuses mainly on pre-agreement activities. Although Rouach and Klatzmann (1993) acknowledge some post-agreement activities, the focal point of their model is on pre-agreement activities.

For building the comprehensive model, all of the identified process stages of the previously discussed ITT models were first combined in respect to their order. Then they were integrated into six stages based on the two main criteria we discussed previously: the ITT process stage and the order of stages (Figure 1). The following section will present the detailed explanation of each stage of the proposed comprehensive model. Since each stage of the proposed comprehensive model. Since each stage of the proposed model is designed based on the combination of a number of stages from the previously discussed models, each stage and its sub-stages in the comprehensive model are marked by alphabetical codes. These codes indicate how many other authors have also considered that particular stage or sub-stage in their models. The codes, in alphabetical order, represent the first letter of the author or authors’ names. The numerical order of the codes refers to the order of stages of a particular process model that was discussed. The key of alphabetical codes used in the following section is the same as that in Table 1.

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Table 1: Models of Technology Transfer

Assessment. The process of TT starts with assessment and negotiation, or what Holliday (1979), Szulanski (1996), and Putranto (2003) call the initial planning. However, assessment and negotiation each have different goals. In the work of Awny (2005) and Farhang (1997), assessment and negotiation are treated as two separate stages in the proposed comprehensive model. The first stage of the TT process – assessment (A1, K1, R&K1, R&S1, R&G1) – starts with self-assessment (R&K1). Based on the needs discovered (A1, K1, A2, M1) in the assessment stage, the first question that needs to be answered by the management of the organizations is whether to engage in technology exploitation (R&K2) or not. When the management of an organization comes to a positive decision about technology exploitation they then engage in specifying needs (A2). The next decision that should be made in this assessment stage is the selection of the type of technology (A3, K2, M3, B&H1) based on the evaluation of the existing technology and its limitation (M2). Here the parties involved in TT could decide on two aspects of the technology: scale and level (R&S2). The last step before starting the negotiation phase is the finalization of the assessment documentation (A4).

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The second stage of the assessment process is negotiation (F2, A5, P1). The goal of this stage is to achieve agreement (R&G2) on several topics: 1. more detailed assessment of the technology (R&K3) 2. assessment of the countries (R&S1) and selecting the target countries (R&K4) 3. selection of the appropriate mode of entry (R&K5, K3) 4. finalization of the choice of a host country and agreement (R&K6) 5. definition of standards to measure the success or failure of the transfer process (M4). Parties initiate the transfer (R&K7) by finalizing the negotiation and drawing up a contract (R&K8). As Holliday (1979) indicates, the assessment and the negotiation stages, which he refers to as initial planning, are tightly interrelated with the next stages of the TT process, which he refers to as the absorption stage. According to Holliday (1979), solutions that are provided to the problems discovered in the assessment and negotiation stages to a large extent predetermine the kinds of policies and instructions that must be employed in the following stages of the TT process.

Implementation. The next step in the process of TT is the implementation of transferred technology (B&H2, B&H3, F3, S2, A6, R&S3, P2, R&G3, M5). In this stage, the technology will be put into operation (P3) based on the assessment and agreement negotiated in the previous stage. Among the previously discussed models, Teece (1976) specifically deals with the engineering of implementation of the TT process and explains a four-step implementation process (T1, T2, T3, T4). The implementation stage will be complete when parties start providing products and services, which is the goal of this stage. According to the model presented by Teece (1976), the implementation stage ends when the manufacturing (provision of products and/or services) is begun, or, as Teece (1976) describes, when the plant is brought on stream.

Figure 1: Comprehensive Process Model of Technology Transfer

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Adoption. Adoption of the technology is the next step in the process of TT (A7, B&H4, S4, K5). After the initial implementation, the parties should focus on utilizing the technology for achieving its highest performance (K4) and demonstrating the dissemination of technology in the organization (R&S4). It is important to note that in some of the models, implementation and adoption of technology are put together as a single stage (e.g. Awny, 2005; Madu, 1989). In other models, the authors (e.g. Szulanski, 1996; Baark and Heeks, 1999) have differentiated the adoption of the technology from the implementation of the technology in the process of TT. In the comprehensive model proposed in this study, the adoption and implementation of the TT process have been differentiated. The implementation stage is the beginning of the provision of products and/or services. However, the adoption stage is the maximization of the performance through integration of the TT into the organization’s activities so that the TT becomes part of the routine in the operation of the firm (S4) and also becomes adapted to the local conditions (K5).

Absorption. The next stage of TT, based on the proposed comprehensive model, is the absorption stage, which deals with the understanding of the hidden “details of the technology including the know-how, the tacit knowledge and experience” (A8). While adoption of the technology can be gained by learning, training, understanding the ways technology works, and adaptation to local conditions, the absorption can be gained by a combination of knowledge and experience. As a result, absorption of the technology will be gained after adoption of the technology.

Long-term Development. The last stage of the TT process is the long-term development (F4), which focuses on facilitating the development of the technology and products and/or services (R&S5). The objective of this stage is achieving a number of activities such as diffusion of the technology (B&H5), “improving technology beyond its designed performance” (K6), development of the technology (A8), achieving innovation capability (B&H5), and achieving the capability for development of new technologies (K7).

Evaluation Process. The importance of an evaluation system as a central element in the transfer process has been explained in a number of TT models (Madu, 1989; Rogers and Gibson, 1994; Putranto et al. 2003). This evaluation system can ensure that the TT process is conducted appropriately and will help the organizations to adjust the process of TT, if required. According to Sedaitis (1996), to have an effective TT process it is necessary to have feedback loops at each stage of the process to monitor and, if needed, refine the direction of the transfer process.

In summary, this section provided a historical evolutionary perspective of the ITT process models. A comprehensive process model of TT was developed based on the strengths and weaknesses of the models of TT presented in section 2 of this study. The proposed comprehensive model explains the major stages necessary for an effective transfer of technology to developing countries. Absorption and long-term development are considered to be the most important stages in the transfer process for developing countries. A detailed and thorough comparison between all 14 models discussed in section 2 and the proposed comprehensive model presented in section 3 is provided in Table 2. This graphic demonstration is based on the main activities in each stage and sub-stage of the previously discussed models. As shown in Table 2, the proposed comprehensive model of ITT covers the activities and stages of all the ITT process models presented in section 2.

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Table 2: Comparison of Models of Technology Transfer

Conclusions and Future Research

The purpose of this study is to shed light on the process of ITT from developed to developing countries. Based on an extensive literature review of more than 250 scholarly articles, 14 models of ITT with regards to the transfer of technology from developed to developing countries were identified. After describing these models, 12 of these models were identified as presenting process models of ITT at the operational level. Based on a systematic comparative analysis, the differences and similarities among these models were identified and, finally, a comprehensive process model of TT was developed that takes into account the critical steps necessary for an effective TT to developing countries. The literature suggests that the last three stages of our proposed comprehensive model of the ITT process – adoption, absorption, and long-term development – are the most influential stages in the successful transfer of technology from developed to developing countries (Cannicea et al., 2003; Saad et al., 2002; Sinani and

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Mayer 2004; Ruffin and Jones, 2007). Yet, the review of the models presented in the literature, ironically, shows that these three development stages of the ITT process are the most neglected stages by scholars in this field.

After carefully reviewing the available literature on ITT from developed to developing countries, the most common shortcoming of the literature, which needs further research and study, was found to be the reliance of the scholarly articles on the case study-oriented approach. This approach limits the generalization of the findings to specific sectors, firms, or countries. Also, the available literature overemphasizes transfers from developed to developing countries, while neglecting the transfers that happen from developing to developed countries (e.g., the leading position of Indian software exports), and among developing countries (Elshout, 1995, and Ganesani and Kelsey, 2006). Moreover, ITT literature has focused excessively on commercial transfers and has significantly neglected the TT aspect of bilateral or multilateral educational, scientific, and training exchange programs. Furthermore, there exist very few empirical studies of the impact of TT on the innovation performance of firms in developing countries (Guan et al. 2006; Wong et al. 2003). All of these provide opportunities for future research in this area.

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