TRAINING PROGRAMME ON TECHNOLOGY DIPLOMACY

1. TRAINING PROGRAMME ON TECHNOLOGY DIPLOMACY JAIPUR 16 November 2011

2. TECHNOLOGY SOURCING AND ASSESSMENT BY Dr. Vinay Kumar Former Advisor/Scientist G, Ministry of Science and Technology 16 November 2011

3. MAJOR ISSUES CONCERNING INDUSTRY • Shorter life cycles of technology • Intense national and international competition • Global markets • Quality, cost, delivery, after-sales service, international standards • Intellectual property rights • High risks in investment

4. MAJOR ISSUES CONCERNING INDUSTRY (Contd.) • Shorter time between innovation and commercialization • Research and development important • Energy efficient technologies • Environment friendly technologies • Information and communication networks • Socio-economic and socio-political factors • Movement of capital across national boundaries

5. SCIENCE AND TECHNOLOGY DIPLOMACY It refers to provision of science and technology advice to multilateral negotiations and the implementation of the results of such negotiations at the national level. It thus covers activities both at the national and international levels pursuant to international commitments.

6. WHY SCIENCE AND TECHNOLOGY IMPORTANT IN INTERNATIONAL RELATIONS? • Emerging issues – infectious diseases, environmental concerns, ICT, Biotechnology, use of electronics in crimes.. • International trade in commodity and technology • International standard setting in the field of health, safety and environment

7. WHY SCIENCE AND TECHNOLOGY IMPORTANT IN INTERNATIONAL RELATIONS? – Contd. • International cooperation in manufacturing and Research and Development • Foreign Direct Investments • Intellectual Property Rights Issues

8. Receipts (R) and Payments (P) of Royalty and Licence Fee in US $ million(Source World Bank –World Development Indicators 2008 and various Issues)

9. Receipts and Payments (Contd.) 2008

10. Licensing Receipts and payments for Japan1950-1974 (in million US $)Source: 1950-1970- Lyn (1985)-Contractor 1981

11. Number of technology licensing agreements in Japan (1981-2001)Source: Japanese Statistics Bureau 2004

12. CHANGING PARADIGM IN R&D NOTHING IT IS SAID, IS CERTAIN EXCEPT DEATH AND TAXES – YET ANOTHER INESCABABLE CERTAINITY IS CHANGE • Market and buyers driven – organizations can get more out of their research by linking it more closely to market need and customers requirements rather than increased spending elsewhere • R&D on ‘business like’ footing

13. Changing paradigm in R&D (Contd.) • Time and cost of R&D is important • Expectations from R&D increased manifold • R&D is getting increasingly more multi-disciplinary in nature • Team orientation • Creativity and innovativeness of considerable significance

14. Changing paradigm in R&D (Contd.) • Managerial skills in R&D personnel increasingly required • Borderless laboratories • Intellectual property rights issues • Changing from a strategy of ‘hope’ to a strategy of a more ‘systematic, disciplined and accountable’ R&D

15. Changing paradigm in R&D (contd.) • Impact of Information and Communication Technologies. These are impacting R&D management systems and practices in numerous ways, creating new threats and opportunities. • Increased expectations of Head of the Institution

16. Changing paradigm in R&D (Contd.) • Success now requires strong competitive advantage in the form of innovation, quality, agility, and or productivity – cost leadership alone is not sufficient • Measurement of performance is being emphasized for every organizational activity. Individuals are required to add value at every level. • Demographic shifts in customer and employee base has directly or indirectly influencing the way managers think and act.

17. INDIA AS GLOBAL R&D PLATFORM

18. WHY INDIA ? • Large number of R&D Laboratories and centers • Wide technological institutional network • Qualified and skilled manpower • Proximity to a large Indian market • Well established corporate infrastructure • Strong expertise in information technology

19. WHY INDIA ? - Contd. • Growth in health sector • Heterogeneous population mix • English is widely spoken • Strong design and manufacturing base

20. BENEFITS TO HOST COUNTRY • Employment • Arrest and reverse brain drain • Encourages S&T as a career • New R&D culture • Encourages commercial culture amongst scientist and technologists • Companies move up the value chain

21. Contract research to local bodies Collaborative research with Universities, R&D Institutions and industry New curricula development Positive impact on country's innovation system Global market for R&D capacity BENEFITS TO HOST COUNTRY

22. A FEW EXAMPLES • Over 700 MNCs with R&D Centers in India • Tier II locations emerging as growth centers. Offer up to 40-50% savings on cost • MNCs are changing their focus from cost to innovation, competency creation and leadership roles in R&D

23. A FEW EXAMPLES (contd.) • Over 2,00,000 engineers employed in such centers • Operating cost for MNC R&D Centers increased by 9% in FY 11 • Samsung spends over 8% of its global spends in R&D every year, a significant part of which comes to India • AMD has R&D team of 1,100 people in India, nearly 10% of its global workforce. Has hired close to 300 people during 2011 and plans to recruit another 150 in 2012

24. A FEW EXAMPLES

25. SOME OUTPUTS (Source: IIFT AND DSIR Study 2006)

26. OPTIONS FOR TECHNOLOGY • Acquisition • In-house development • To get developed • Joint development

27. Acquisition preferred where • Too expensive/ too long to develop or get developed • New technology on attractive terms • Customers preferences • Many technology gaps

28. In-house development preferred where • In-house capability exists • Time and cost effective • Technology not available from outside sources • High cost of technology acquisition

29. A manufacturing or service Unit An R&D Organisation A Technical Institute/University A Consultant TECHNOLOGYSUPPLIER A manufacturing or service Unit An R&D Organisation A Technical Institute/University A Consultant TECHNOLOGYRECEIVER TECHNOLOGY SUPPLIERS AND TECHNOLOGY RECEIVERS -A FEW EXAMPLES

30. TECHNOLOGY SOURCING • Exhibitions and Conferences • International Organizations • Industry/Technical Journals • Directories • Industry Associations • Government Sources • Patent Literature

31. TECHNOLOGY SOURCING (Contd.) • International Agreements • Foreign Embassies/ High Commissions in India • Data banks/ bases • Experts and consultants • Informal meets • Indian Embassies/High Commissions

32. Assessment of technology supplier/partner • Manufacturer/R&D organization/Technical institute • Market share – National and international • Financial health • R&D set up • Ownership of technology • Authority to transfer • Reputation amongst other technology acquirers

33. Assessment of Technology • Suitability to locally available raw materials • Skill levels required • Stage in Technology life cycle • Input-output ratios • Laboratory scale, pilot plant or commercially proven • Safety considerations

34. Assessment of Technology (Contd.) • Environmental aspects • Status of IPR, Trade Marks etc. • National Policy Issues • Quantitative Approach

35. Capacity building for identification of technology sources • Awareness of new technologies • Identification of technology needs • Evaluation of technology and technology supplier/ partner • Net working • International Agreements

36. Advantages of new technologies • High financial returns • Can stay longer in market • Name recognition • First mover advantage • Enhanced value for customers • Leveraging organization's capabilities • ---

37. Disadvantages of new technologies • May not be commercially proven • Normally not market tested • Risks of failure and commercial returns • Safety risks in operation • IPR related risks • Competitors may bring better products after watching the performance of new technology • ----

38. TECHNOLOGY ACQUISITION

39. TECHNOLOGY PACKAGE • Specifications of the product/output • List of components/parts • Details of each component/part • Details of assemblies and subassemblies • Operation process parameters • Quality parameters

40. TECHNOLOGY PACKAGE – Contd. • List of purchased items • Details of Plant and Machinery • Plant Layout • Plant Maintenance Guidelines • Safety Precautions • ---

41. Technology Acquisition Process – Complexities • Technology package has many components • Not like buying equipment or raw materials or components • Technology has cost and prices • Generally no price list • Long term relationship • Technology absorption

42. Technology acquisition Process – Contd. • Technology Assessment and Evaluation • Negotiations • Agreement • Implementation • Technology is very dynamic • Intellectual Property Rights Issues

43. INFORMAL General Hiring of Engineers Reverse Engineering FORMAL Licensing Outright purchase Joint Ventures Turnkey Projects Acquisition of the company Training and Experts Consultants Purchase of equipment with embodied technology MODES OF TECHNOLOGY ACQUISITION

44. Price variance – technology life cycle

45. Price variance – technology status

46. FACTORS FOR SUCCESSFUL ACQUISITION OF TECHNOLOGY • Good Agreement and Documentation • Mutual Trust • Competence of Technology Supplier • Competence of Technology Acquirer • Training • Mutual Interest

47. FACTORS FOR SUCCESSFUL ACQUISITION OF TECHNOLOGY – Contd. • Planning • Appropriate channel • --- • ---

48. WHAT IS A GOOD AGREEMENT • Should be comprehensive in point of substance and content • Should be written in simple language with short sentences • Ambiguity and multiple interpretations to be avoided • Should be in conformity with law

49. WHAT IS A GOOD AGREEMENT (Contd.) • Should avoid disputes • In case disputes arise, should provide for a satisfactory settlement mechanism

50. Important clauses in Technology Transfer Agreements • Definitions • Coverage • Territory and Exclusivity • Scope of documentation • Language • Training • Terms of Payment • Currency of Payment