Transferring technology: costs and benefits

Abstract

The cost of transferring technology within and among firms participating in the global marketplace is a topic of considerable and continuing interest to business. Two dominant themes in the literature — the economic environment and the cultural environment — are brought together in a conceptual model. In this paper, the economic environment is cast as the nexus of market structure and government intervention. Market structure includes consideration of the number of competitors, the extent of the market, and the cost structure of the industry. To market structure is added the consideration of government intervention. Such intervention, once negligible, has become a major factor in some industries and now includes voluntary quotas, punitive tariffs, and intervention on behalf of an industry to balance biases imposed by other governments. The second theme, the cultural environment, highlights the differences in culture among firms that desire to transfer technology. These differences can impede or encourage the transfer. When formulating strategy, consideration of these two themes simultaneously can aid in improving competitiveness which, more and more, is driven by the dynamics of technology transfer.