Unit 5final

Technology Management Unit 5

Sikkim Manipal University Page No. 80

Unit 5 Technology Adoption, Diffusion and Absorption

Structure:

5.1 Introduction

Objectives

5.2 Technology Adoption

5.3 Technology Diffusion

Importance of technology diffusion

Perspectives of innovation diffusion process

Activities necessary for diffusion process

5.4 Technology Absorption

Role of technology absorption

Benefits of technology absorption

Constraints in technology absorption

5.5 Technology Package and Technological Dependence

5.6 Indian Experience in Technology Absorption Efforts

5.7 Issues Involved in the Management of Technology Absorption and

Government Initiatives

Issues involved in the management of technology absorption

Government initiatives for technology absorption

5.8 Summary

5.9 Glossary

5.10 Terminal Questions

5.11 Answers

5.12 Case Study

5.1 Introduction

By now, you must be familiar with the concepts of technology strategy and

competitiveness. In the previous unit, we discussed about the technology

strategy and elements of accessible technology strategy. We studied about

the innovation management. We also discussed about the components of

competitive advantage and analysed how to create competitive advantage

using value chain, and how to evaluate the technology management.

We know that the technology adoption, diffusion and absorption help in

acquiring the new technologies. So, in this unit, we will study about them.

We will also learn about the technology adoption plan that is needed for the



implementation of the technology plan. We will discuss about the technology

absorption and constraints in the technology absorption. We will also

understand the issues related to technology absorption and the experience

of India in technology absorption. We will also study about technology

diffusion. Without proper management no technology can be absorbed so at

last we will study about issues related to the management of technology

absorption and government initiatives for technology absorption.

This unit will enable us to understand that without the use of technology

adoption, we cannot get any of the technologies and without the diffusion,

technology cannot spread. Finally the technology absorption helps us to

absorb the technology.

Objectives:

After studying this unit, you should be able to:

Explain the technology adoption and technology adoption plan.

Explain the technology diffusion.

Explain the technology absorption.

Summarise the technology package and technological dependence.

Describe Indian experience in technology absorption efforts.

Discuss the issues involved in management of technology absorption

and government initiatives.

5.2 Technology Adoption

As we are familiar with the term adoption that is nothing but taking full

control of the thing when you have adopted that thing. In the same way, we

can define ‘adoption of technology’ or ‘technology adoption’ as the

successful implementation of technology, and deriving the full potential of

the technology. Adoption is relatively easy in a new enterprise as compared

to an ongoing firm. Adoption of technology requires gearing up of all the

resources such as internal and external infrastructure, human resources,

raw materials, and even marketing. As there is no existing system in a new

enterprise, it is easy to adapt to the acquired technology. Whereas, in an

ongoing enterprise, the prevailing systems have to modified and the existing

work processes, working environment and culture may have to be changed,

which makes it more difficult.



The concept of technology adoption has attracted much more attention in

recent times, due to the explosive growth of new technologies worldwide.

From the last few years, business and consumer marketplaces have been

exposed to the widespread use of the personal computer, the Internet, ever

present wireless communications and broadband communications.

Simon (1978) opined that many technologies that were transferred from

developed to developing countries were not successfully adapted, because

of the inappropriateness of those technologies for developing countries. He

studied the causes for inappropriateness of various technologies that were

transferred from developed to developing countries, and identified the

following as specific causes:

Missing preferences of local markets and consumers.

Technology is based on imported raw materials.

Insufficient skills of local labour.

Not scaled down to local market.

Insufficient use of technology caused by the local labour, and

Excessive usage of capital goods and imported equipment.

Other general reasons that he identified were:

High cost of transfer.

Environmental pollution problems.

Impact due to plant location, and

Impact due to energy inputs.

Technology adoption plan

Till now we have learnt about the concept of technology adoption. Now, let

us learn about the technology adoption plan.

As we know that planning is needed before implementing any process. Also,

before adopting the technology we need to plan for the process of adopting.

Planning for the implementation of the new technology should be thorough

and should encompass a relatively long time horizon to assure the stability

of the new system. The complex process of introducing a new technology

necessitates a practical plan which will focuses on employees’ needs and

deals with issues of concern to them. Key steps in this process of

technology adoption plan include some of the steps shown in figure 5.1.



Figure 5.1: Steps in Technology Adoption Plan

Let us now briefly discuss the steps involved in the technology adoption

plan, as per the figure 5.1.

Identify the target group: For any project, the target group signifies the

customers. This process involves the identification of the customers. The

plan can be implemented very well if we know the view of the customers.

Locate and analyse the resistance to change: The introduction of the

new technology in the organisation cause the change process in the

organisation. It is the human tendency to resist the change, when they

are very comfortable with the old values and beliefs. They locate and

analyse the resistance to change, which involves the identification and

analysis of the resistances to change.

Assess actual ability to change: We have to check whether ‘we’ as

the organisation, are capable to introduce the technology and undergo

change process.

Assess capacity and resources to change: We even have to see

whether we have sufficient resources to undergo the change process.



Access perceived priority of change: We have to prioritise the

activities of change process.

Specific planning should include:

Identify the division(s), section(s), and individuals involved in the

change.

Specify the extent of changes.

Develop a change plan which embraces timing, communication

methods, involvement of individuals, and responsibilities of individuals.

Self Assessment Questions

1. Adoption of technology can be defined as the successful implementation

of technology and deriving the full ________ of the technology.

2. Before adopting the technology we need to plan for the process of

adopting. (True/False)?

3. Adoption is relatively easy in a ________________as compared to an

ongoing firm.

Activity 1:

Suppose that you are working in the company as a project manager and

you are given in charge of the technology adoption. List out the steps that

you would carry out for the technology adoption.

Hint: Identify the target adoption.

5.3 Technology Diffusion

Previous section familiarised us with technology adoption, so let us now let

familiarised ourselves with the concept of technology diffusion.

In general, we know that diffusion is the process of spreading. The process

of adopting the new technology by the customers who came to know about

the technology from other customers is called as the technology diffusion.

Diffusion involves special types of communication methods or system to

help diffuse changes in practice, as well as changes in knowledge or

attitudes. Thus, we can say that diffusion is the process of closing the gap

between what people do not know and what they can effectively put to use.



5.3.1 Importance of technology diffusion

After defining the technology diffusion, now let us study about the

importance of technology diffusion.

Technology diffusion plays a major role in most of the countries today. The

barriers to technology diffusion help us to determine the magnitude of

technology diffusion. These barriers determine the volumes of diffusion.

Diffusion enlarges the set of available technologies and increases the

productivity of the country. In case of diffusion, productivity is determined by

the domestic technology in the production country and the diffusion

technology from other countries. The technology diffusion plays more

important role in the sector of goods that are not tradable, than the sector

with the tradable goods. The free technology diffusion generates more gains

compared to that of the free merchandise trade. We can increase the

merchandise trade by removing the diffusion barriers since the countries

achieve higher productivity by taking the technology from the diffusion

process.

A well-managed technology diffusion system enables an organisation to

plan its technology development projects in a more meaningful manner as

well as transfer the technologies more successfully. Such an approach

results in better returns for the investments made in R&D and technology

development systems.

5.3.2 Perspectives of innovation diffusion process

After the importance of technology diffusion, we will now study about

different perspectives of innovation diffusion process.

Traditional perspective: Technological innovation and diffusion have

traditionally been viewed as separate processes. This view treats

diffusion as the marketing efforts required to expand the acceptance of

the technology beyond the markets initially targeted.

Adoption perspective: The adoption perspective is most often used to

describe the diffusion process. This perspective focuses on how the

various channels and modes of communication (media, interpersonal

etc.) can be used to influence a diverse group of potential customers to

adopt a technological innovation.

Infrastructure perspective: The infrastructure of the region in which the

technological innovation is targeted is an important factor in diffusing the



innovation. Infrastructure aspects that affect diffusion include

transportation, terrain, weather, availability of energy, communication,

etc. Poor infrastructure development can constrain some innovations.

Diffusion will occur only if the necessary facilities exist.

Regulatory /Societal perspective: The regulatory / societal perspective

looks at the effects of government policies, regulatory requirements, and

bureaucratic processes, and the development stage of the area in which

the technology is to be used. This perspective is particularly important

for diffusion of technologies in developing countries.

Models perspective: The models perspective looks at the development

of models that management can use to predict the behaviour of potential

users of a technological innovation and, consequently, develop

strategies for diffusing an innovation. To model a diffusion process, an

analyst works with a few variables to fit a curve that describes the

spread of innovation over time.

Comprehensive perspective: The comprehensive perspective uses all

the perspectives discussed so far in developing a diffusion strategy. It

views the diffusion process as part of a total innovation process.

5.3.3 Activities necessary for diffusion process

In this section, we will have a brief discussion on the activities necessary for

diffusion process. We can say that diffusion is a multi-faceted activity.

Let us have a look at its main activities.

Individual action: The diffusion process begins with this activity. During

the individual action activity, the inventor proceeds (sometimes without

even realising it) through a series of steps that result in practical use of

an innovative idea.

Creation of favourable conditions: The leadership in the organisation

must establish the expectation that everyone will take some

responsibility for generating innovations and make some contribution to

their diffusion. In return, the people in the organisation should expect

that they will be rewarded for their efforts.

Applying basic research: This activity represents the translation of the

findings of people who have done the basic research (people) into

applications. The application of basic research is a more organised effort



than individual action. In this activity, diffusion involves linking the basic

scientist's work to the applied scientist's work and the world outside the

laboratory through the comprehensive diffusion perspective.

Industrialisation: This activity of diffusion process focuses on

developing a practical and profitable application of the technology .It

links customer demand with technical opportunities and out of this

emerges a design concept for evaluation. Linking technical opportunities

with market demand requires coordination and cooperation among

applied scientists, engineers and marketing personnel, especially market

research personnel.

Commercialisation: After initial development of the technology

concept, commercialisation receives the major emphasis. The boundary

between the industrialisation and commercialization activity is hard to

define exactly. Commercialisation includes finding solutions to all the

problems of defining the technology, organising trials, mechanisms for

transfer of technology and expanding and managing the technology life

cycle.

Communication: Communication activities are the next major activities.

The marketing department develops a description of the attributes of the

new technology, selects channels for its marketing message, and begins

development of a promotional programme. Marketing next assesses the

target market segment to identify the potential adopters that should be

influenced first. The firm next develops the corporate capabilities for

managing the diffusion, setting pricing policies and selecting and

segmenting the market as a whole.

Full Scale Diffusion: This is the last activity of a comprehensive

diffusion process. It includes a search for a wider range of potential

markets, new industries, new geographic regions, new market segments

that have not been explored, and new ways to couple the innovation

with other innovations.


4. The ___________department develops a description of the attributes

of the new technology.

5. The free technology diffusion generates less gain compared to that of

the free merchandise trade. (True/False)?



6. The diffusion of technology to the late majority and laggards are more

direct than that of the_________ and early adopters.

Activity 2:

Consider that you are working in the company as a team lead and you

want to carry out technology diffusion process for the well spread of the

technology. List out activities that you will carry out for the same.

Hint: Individual action

5.4 Technology Absorption

As we have already discussed about technology diffusion in the previous

section, so let us now have a discussion on ‘technology absorption’. We

know that the term ‘absorption’ is nothing but the process of absorbing

something.

We have to acquire technology from sources within or outside the country,

and one of the ways to acquire technology is, by the process of technology

absorption. Once a technology is imported from another country, it needs to

be absorbed and updated in accordance with the local requirements.

Foreign technology may have been developed keeping in view different

parameters relating to scale of production, raw materials and components,

quality standards, costs, levels and types of production techniques,

maintenance requirements, social aspects including environmental and

pollution aspects, employment, so on It is common in many developing

countries (such as South Korea, Taiwan, Thailand, Indonesia, India,

Pakistan, Sri Lanka, Bangladesh, Philippines and including our own country)

to import technology as a package.

Most of these countries have developed indigenous R&D capabilities of

varying order to absorb and upgrade the imported technologies, and to

achieve technological self-reliance. While some countries, such as South

Korea, Taiwan and Singapore have absorbed technologies predominantly

from exports, India has done so predominantly for local markets. The

concept of technology absorption differs from country to country, and even

from firm to firm. In India, absorption is generally considered as the capacity

to reproduce or manufacture products according to the "know-how" supplied



by the licensor of technology, without really understanding the "know-why"

of the technology. In a country like South Korea, know-why exercises to

understand the "black-box" of technology have been emphasised at the firm

level without which exports are difficult. In fact, there are only a few

countries which have attempted to provide incentives to industry to

undertake technology absorption exercises, with a view to reducing-imports

and enhancing exports. India is one of them.

5.4.1 Role of technology absorption

Till now, we have seen the meaning and concept of technology absorption.

We will now study about the important role of technology absorption in

project implementation.

Let us have a look at the technology absorption in the project

implementation process in figure 5.2.



Figure 5.2: Role of Technology Absorption in Project Implementation

As per the figure 5.1, technology absorption plays an important role in

project implementation. It is clear that the project absorption occurs after the

project implementation, in any project. Figure 5.1 also depicts the tasks that

are associated with the each phase of the project implementation process.



5.4.2 Benefits of technology absorption

After the role of technology absorption, we will now study about the benefits

that we get from technology absorption exercises, as evidenced by

Government and industry experiences so far. These benefits are:

Repeated collaborations for the same product/ process are avoided.

Acquisition of further technologies becomes selective.

Ability is developed to unpackage the technology.

Savings can be affected in foreign exchange due to indigenisation /use

of indigenous alternatives.

Effective utilisation is made of available indigenous research expertise

and facilities to achieve the desired results.

Know-why and technology upgradation capabilities are built-up.

Exports are increased.

Technically competent groups of scientists and engineers trained in

technology absorption get matured and strengthened.

The base for technological self-reliance is enhanced.

We gain the benefits of technology diffusion, ranging from R&D services to

the larger sales. Technology diffusion helps in sustaining the growth of the

company through technical strength. Many developing countries, including

India, have liberalised their industrial policies in the recent past. In the wake

of the liberalised nature of New Industrial Policy and other policy measures

in Trade and Finance, it has become imperative for industry to accelerate its

R&D efforts to meet the emerging competitive environment.

While acquisition of technology is now easier, commensurate R&D efforts

will simultaneously be needed to absorb and upgrade the acquired

technology in order to become internationally competitive. The thrust as

underlined below need to be ensured for effective implementation,

absorption and upgradation of imported technology.

Industry should attempt to obtain best available technology closest to

international trends and provide R&D at the stage of project planning.

Speedy indigenisation of raw materials and components.

Efforts for unpackaging and indigenisation of tailor-made equipment in

the acquired technology.

Enhancing exports of products based on absorbed and upgraded

technology.



Continuous training of research personnel in India and abroad.

Use of national and international research facilities and expertise.

Involving users, suppliers of components and materials, research

organisations in undertaking absorption exercises.

5.4.3 Constraints in technology absorption

There are some constraints associated with the technology absorption. We

will now discuss about these constraints of the technology absorption.

We know that improved productivity and quality as well as reduced costs

lead to higher efficiency in industrial operations. In labour intensive

industries, these can be achieved from optimum man/machine utilisation,

lower overheads, use of versatile machines and quality control measures

and industrial engineering techniques. In capital intensive industries

involving sophisticated operations to manufacture products which are in

continuous demand or which command large markets, these can be

achieved by higher automation and by organising the operations on larger

scale. In hazardous industries, safety and pollution control measures

necessitate higher capital investments in sophisticated equipment based on

latest technologies.

We will now have a quick overview of factors, which are important in

achieving higher productivity, quality and reduced costs. These factors are:

Optimum utilisation of capital equipment to bring about maximum

production leading to better capital-output ratio.

Adequate investments for quality control, material and energy

conservation/ recovery, elimination of hazards which would necessitate

use of sophisticated equipment.

Minimum economic scale of production, particularly in industries where

scale factor is important in optimising the operations, especially if in

larger quantity of critical production equipment is employed.

Targeting and achieving, international levels of performance and

operating parameters.

These factors invariably require use of contemporary technologies needing

larger capital investments, and/or accompanied by sizeable domestic

demands and satisfactory absorption of technology. In scale sensitive

industries, lower the scale of operation, lesser is the level of technology.



Level of technology is also reflected by the use of less productive and

sometimes second-hand machinery from abroad. In mass consumption

industries such as petrochemicals, man-made fibres, organic chemicals,

electronic components, so on lower the initial installed capacity, lesser is the

technological level. In such cases, modernisation /R&D costs would be

heavy in order to jump to the next generation of technology.

Some of the major constraints in absorption of technology are:

Choice and use of imported technology by most Indian industries have

not been at international levels. This is an important factor while

establishing scale sensitive, high technology industries.

The demand of products whose production is influenced by scale factors

of latest technologies is generally not very large in our country. Presently

these are being met by a number of units of sub-optimal sizes as

compared to international levels. This constraint increases the gaps to

be bridged through technology absorption. Industry would not be in a

position either to invest similar R&D resources in comparison with

international units, or even to improve the products/processes.

Expanding the existing units and establishing new units with larger

capacities tend to minimize this gap.

In general, industry has not given adequate attention to absorption of

technology. In such cases, the firms have usually approached the

collaborators once again for renewal of earlier agreements or for new

collaborations for improved or new products and processes. There are

instances where existing items made with marginal process or product

improvements have continued to be supplied even after extensions of

collaborations. In the absence of a competitive domestic market, or

where industrial users are dictated by equipment/products based on

imported technologies, the inherent tendency to supply the same

product hits continued, till the users' requirements change or substantial

imports of a new product take place.

Till now we have studied about the technology absorption and the

constraints in technology absorption. Let us now move on to the topic that is

the Technology package and technological dependence.




7. The technology absorption plays an important role in the project

_____________.

8. Industry should attempt to obtain best available technology closest to

international trends and provide R&D at the stage of project planning.

(True/False)?

9. The demand of products whose production is influenced by scale

factors of latest technologies is generally not ______________ in our

country.

Activity 3:

Suppose that you are working in a company and you have to see the

benefits of the technology absorption that you will get and then make the

decision whether to carry out the technology adoption or not. List the

benefits of absorption of technology.

Hint: Exports are increased.

5.5 Technology Package and Technological Dependence

In the previous section, we studied about the technology absorption. In this

section, we will learn about the technology package and technological

dependence.

We know that the technology is imported from other countries in the form of

hardware, software and related services. In some instances, it could be only

for using foreign brand names. It could be for a grass-root project or for

further technological requirements of an existing plant, or for modernisation

or enhancement of a product capability. A foreign technology package may

consist of all or many of the aspects, such as product design, process or

production know-how, systems engineering, application information, tailor-

made equipment and/or their designs, technical services regarding

maintenance/ safety / continued improvements/international experiences,

so on

Technological dependence on foreign know-how can be in any of the

following areas such as:

Product designs/ standards/ specifications.

Know-how for assembly of products.



Licensing for the use of patents/ trade marks.

Process know-how designs and basic engineering, detailed engineering,

production technology.

Quality control, safety, pollution control and continued assistance in

improvements of technology used in the existing manufacturing facilities.

Supplies of hardware and proprietary equipment and their designs.

5.6 Indian Experience in Technology Absorption Efforts

In the previous section, we have studied about the technology package and

technological dependence. In this section, we will study about the Indian

experience in technology absorption. An in-depth assessment of absorption

efforts of over 50 major industrial units in different sectors has brought out

some of the constraints of Indian industry, as given below:

Lower scales of production compared to international levels, even in

areas that are agreeable to scale sensitive sectors/use of latest

technologies.

Lack of attention to absorption of technology in the absence of any

compulsion to be internationally competitive.

Continued access to collaborators on nominal payments, assured

market and inadequate allocation of resources for R&D has resulted in

insufficient attention for effective absorption and improvement of

imported technology.

Minimal involvement of R&D personnel in assessment of technology,

further negotiations and transfer, and transfer in implementation 'Of

technology.

User's preference to imported technology-based products and

collaborator's guarantees.

Other reported constraints impeding technology absorption include delay in

clearances, project overruns in turnkey jobs, difficulties in translation,

inadequate training/ expertise, incomplete documents, lower volumes than

planned, lower initial investments to play safe, delay in import of

equipment/components, delayed market response, and bottlenecks without

adequate assistance by collaborator.



Suggested measures

Some measures are given for the Indian industries for improving the

technology absorption. We will now have a brief discussion on these

suggested measures.

Indian industry has been expressing its views on various matters connected

with absorption through press, seminars and representations to the

Government from time to time. Let us have a look at the summary of their

views and suggestions.

The units should have their own technology policy for its acquisition,

absorption and adaptation, on long-term as well as short-term basis.

The travel grants and incentives need to be considered for participation

in international seminars/ symposia as well as for training abroad to

keep abreast with the latest development in their fields.

The R&D personnel from in-house/national laboratories should be

involved intimately in the transfer of technology from the conceptual

stage itself.

Incentives and support should be given for prototype development and

testing facilities, pilot studies for adaptation, absorption and up-gradation

of imported technologies. Also, support for using the services of experts/

consultants on short -term basis may be considered in specific cases.

There needs to be a closer interaction amongst in-house R&D units,

national R&D laboratories, academic institutions, design organisations

and consulting firms. Also, international R&D collaborations can be

encouraged.

The particular Information about the acquisition of foreign technologies

should be widely disseminated with a view of making R&D personnel

aware of the needs of the industry. It enables them to formulate the

programmes accordingly.

The tax benefits and fiscal incentives may be considered for investments

made in absorption and upgradation of processes/ products.

In case of fast changing technologies such as electronics, foreign

collaboration agreements should be of shorter durations.

R&D expenditure should be generally 5 to 10% of the annual turnover of

the company, particularly in areas of high rate of obsolescence.



An information base for modern available technologies on global basis

should be set up.

The development of new products is very expensive and time

consuming. It is generally not economical for the industry because of the

low volume of manufacturing and fragmentation of capacity. Small/

medium industries are not able to do any significant technology

absorption exercises since most of them do not have their own R&D

facilities in a meaningful way.

Import of technology and know-how is limited to product design in most

of the cases and manufacturing processes are directly related to the

volumes of production abroad. They are uneconomic for the Indian firm

and need be scaled down to meet the local demands. Consequently,

quality and finish may often suffer.


10. Technology is imported from other countries in the form of hardware,

software and ______________.

11. The development of new products is very expensive and time

consuming. (True/False)?

12. R&D expenditure should be generally 5 to 10% of the _____________

of the company.

5.7 Issues Involved in the Management of Technology

Absorption and Government Initiatives

In the previous section, we have studied about India’s experience in

technology absorption efforts. In this section, we will learn about the issues

involved in the management of technology absorption and the measures

taken by the government for technology absorption. So, let us now learn

about the issues involved in the management of technology and the

initiatives taken by the government for the technology absorption.

The Indian industry, on the whole, has achieved a good capability in

implementing and adapting foreign technology as seen from the various

experiences in different sectors.

5.7.1 Issues involved in the management of technology absorption

The Indian industry has to concentrate on some issues in technology

absorption. We can explain them as the issues involved in management of



technology absorption. We know that the Indian industry needs to focus its

efforts in filling up of the gaps in technology absorption and upgradation of

some areas. Let us have a look at these areas given below.

Accelerated indigenisation and improvement of raw materials/

components/ sub-systems through speedy R&D efforts with vendors/

ancillaries.

Basic investigations and projects in research, design and engineering,

encompassing process/ product design analysis/ optimisation/

improvement, product designs for higher ranges/ new applications,

exports, process design and engineering for higher volumes and

exports.

Analysis and improvement of designs and development of tailor-made

production equipment.

Demonstration of improved/higher range of products/ equipment of the

users.

The technology absorption projects need to be organised or established

on two ways. The two ways are explained as follows:

Individual unit basis.

Collaborative or cooperative basis, i.e. 'club' projects involving users,

manufacturers, national research laboratories or institutions. At

present there is a need for stronger linkages in research and

development work between manufacturers and users and between

institutions/ national laboratories and industry.

5.7.2 Government initiatives for technology absorption

After studying about the issues involved in the technology absorption

management, we Our Indian government over the years has directed the

industry to take necessary steps to set up R&D units for up-gradation and

absorption of imported technology. There is also a stipulation with respect to

this in the terms and conditions of foreign collaborations. However, it has not

been very effective. While formal extensions of collaborations have not been

numerous in comparison to the number of new collaborations. Indian

industry has quite often gone in for further collaborations to avail the

technologies for higher ranges/ capabilities or improved process/ production

techniques. The newer grass-root plants have used later technologies, but

they are also likely to become out dated as the years pass by unless

necessary efforts to catch up with technical changes are made. Industry, in



general, stays at a particular level for a number of years and then considers

a jump in product range or volume of production through further technology

induction. Pursuant to the Technology Policy Statement, the Government

had stipulated that industries using technologies costing more than a

payment of Rs.2 cr. should bring out comprehensive Technology

Absorption, Adaptation and Improvement (TAAI) plans. Government has

also directed industry to submit annual returns for technology

implementation and absorption. Now let us learn in detail about the

Technology Absorption and Adaptation Scheme (TAAS).

The Technology Absorption and Adaptation Scheme (TAAS)

The Technology Absorption and Adaptation Scheme (TAAS) initiated by the

Government (DSIR) as a pilot scheme during the 7thplan. TAAS aims at

stimulating and accelerating the efforts of Indian industry in technology

absorption and up gradation. About 30 public and state sector units have so

far been partially supported for undertaking identified RDDE (Research,

Design, Development and Engineering) projects to absorb and upgrade

specific elements in imported technology. The support is for accelerated

indigenisation /import substitution/ know-why exercises/ product

improvement and optimisation. An amount of over Rs.20 cr. has been

marshalled through a partial support in various major sectors such as

electrical /electronics, metallurgy, industrial machinery and chemicals. The

projects are overviewed by Evaluation Committees. Under the scheme,

other initiatives such as workshops, technology absorption/ profile studies of

different states and technology evaluation studies of critical sectors have

been undertaken. All these have encouraged the participation of industry,

national institutions/laboratories and Government in dealing with issues of

technology absorption.

TAAS activities have resulted in stimulating and speeding up the R&D work

in absorption of technology. The scheme, therefore, is in a good position to

encompass larger areas, to demonstrate the beneficial effects of organised

and target-oriented absorption of technology projects. TAAS has brought out

the need for enhancing the activities to catalyse and assist the industry in

technology absorption.



TAAS is expected to extend partial support to the following:

Core sector users in absorption and upgradation of products/ equipment

from ancillaries /equipment manufacturers/vendors whose technologies

are based on foreign collaborations.

'Cub' or co-operative projects of interest to the sector, involving a group

of manufacturers, users, and national institutions, in identified areas of

technology gaps.

Industry-sponsored projects with national laboratories/institutions.

Projects of small and medium enterprises, in priority areas such as

energy saving, accelerated indigenisation, efficiency and technology

upgradation.

Skill utilisation in technology absorption projects by hiring of research

experts and NRI specialists as well as training in national

laboratories/institutions/ international organisations for identified areas of

absorption.

After studying about the absorption and adaptation scheme it will be

incomplete if we do not study about the evaluation of technologies so now

let us move on to the topic technology evaluation studies.

Technology evaluation studies

In order to assess the performance of technology in the major sectors of

Indian industry, and to assess the gaps in technology and to suggest

possible programmes for R&D and technology upgradation, the Government

has initiated studies in various important areas such as fertilisers, steel,

cement, mini steel, forgings, foundry, aluminium, so on Over 50 sectors

have been identified and in about 30 sectors, studies have .been

commissioned. The reports, whenever they come, are widely discussed in

industry, government departments and other concerned organisations, and

circulated. The reports bring out the need for accelerated effort in

technology generation and absorption. 'Technology demonstration' is also

envisaged in some important identified areas in order to speedily introduce

new technologies. These studies bring out technology gaps and needed

thrusts for technology absorption.




13. Our Indian government has directed the industry to take necessary

steps to set up R&D units for up-gradation and absorption of _______

technology.

14. The Technology Absorption and Adaptation Scheme (TAAS) initiated

by the Government (DSIR) as a pilot scheme during the 8thplan.

(True/False)?

15. The reports bring out the need for accelerated effort in technology

__________ and absorption.

5.8 Summary

In this unit, we made an effort to learn about the technology adoption,

diffusion and absorption. We learnt that technology adoption is the process

of successful implementation of technology and taking full control of the

technology. We also discussed about the technology adoption plan.

We also studied about the technology diffusion, which includes the process

of adopting the new products in the market place. The barriers indicate the

volumes of diffusion.

This unit also familiarised us with the technology absorption, which play an

important role in the technology acquisition when we acquire technology

from outside and within the company also. We noticed that improved

productivity and quality, as well as the reduced costs are leading to high

efficiency in industrial operations.

We also described about the technology package and technological

dependence. We also saw some constraints in the Indian industry, and the

measures for improving the absorption of technology in the Indian industry.

We also analysed the issues involved in management of technology

absorption. The Indian industry focuses on filling the gaps in the technology

absorption. We have seen that TAAS aims at simulating and accelerating

the efforts of Indian industry in the technology upgradation and the

absorption.



5.9 Glossary

Term Description

Barriers The structure that separates anything.

Collaborations The act of working with one another.

Obsolescence The process of being out of state or no longer useful.

Technophobia This is the dislike for new technology.

Turnkey jobs The jobs those are ready for the purpose.

5.10 Terminal Questions

1. Write a short note technology adoption.

2. What is the importance of technology diffusion?

3. What are the benefits of technology absorption?

4. Explain the suggested measures in Indian experience in the technology

absorption efforts.

5. What are the government initiatives for technology absorption?

5.11 Answers


1. Potential

2. True

3. New enterprise

4. Marketing

5. False

6. Innovators

7. Implementation

8. True

9. Very large

10. Related services

11. True

12. Annual turnover

13. Imported

14. False

15. Generation



Terminal Questions

1. Refer section 5.2 Technology Adoption.

2. Refer section 5.3 Technology Diffusion.

3. Refer section 5.4 Technology Absorption.

4. Refer section 5.6 Indian Experience in the Technology Absorption

Efforts.

5. Refer section 5.7 Issues Involved in Management of Technology

Absorption and the Government Initiatives.

5.12 Case Study

Case Study On Technology Adoption and Diffusion

This case study deals with the technology diffusion through the agent

technologies in the ABC company. There is a need of supporting tools

and methodologies for the software technologies before the adoption of

the process that takes place. The agents play an important role in the

adoption of the technologies. Though there are many agent systems,

barriers are present for the adoption of the agent technologies. The

company decided to go for technology diffusion, since there was a need

for spreading the information. It also focussed on adopting the new

software technologies. For this, the employees were supposed to learn

the new technologies and improve the skills, but there was lot of

resistance to change since the employees were very comfortable with the

old skills and were not interested in learning the new skills. Even the new

technologies were very costly, but also the company aimed at adopting

the new technologies because there were new tools and operating

systems involved in the adoption process. The technologies were

successfully adopted and came into existence, because of the good

leadership led by the general manager of the company. He managed to

convince the people in the company for the change process. He showed

the leadership by adopting the technologies that are very costly since he

analysed the technologies with his team before adopting the new

technologies.

Challenges

Whenever there were changes due to the introduction of new

technology, the employees resists to the same.



The new technologies were costly and needed lot of analysis before

adoption of technology.

Results

The company adopted the new technologies that were very costly and

useful.

Questions

1. What are the challenges faced by ABC company?

Hint: The resistance to change from employees.

2. How did the general manger overcome the challenges?

Hint: Convinced the employees for the change process.

References:

Lawrence A Brown, Innovation Diffusion.

http://www.learnthat.com/define/view.asp?id=294

http://www.au.af.mil/au/awc/awcgate/innovation/adoptiondiffusion.htm

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