The Importance of Efficient Management of Technology
The Importance of Efficient Management of Technology
International technology transfers are growing at a great speed as many trade barriers lowered. Especially, in recent years the volume of inward FDI into China has been second only to that into the U.S.A. During this technology transfer procedure, what is the most obvious feature that deserves our attention? Are there any risks for both parties? And how to work it out more efficiently? Concerning the above questions, I chose the article of “Technology transfer to China: a study of strategy in 20 EU industrial companies” to review.
The information in the article was based around a detailed questionnaire designed to obtain an understanding of the views, experiences and strategies of European firms that had transferred technology to China. Information was provided by senior management directly involved in strategic decisions relating to their company’s technology transfer to China. The sectors and companies were chosen to represent different technological and competitive situations.
In my opinion, this article has the following valuable findings:
First, the author contributed the reasons for foreign companies investing in China into three main ones including: access to the Chinese market; access to cheap labor and raw materials and the globalization strategies of large multinational companies, therefore, we can say market access is the most frequently cited reason for technology transfer to China. The gains from market access and the other benefits have to be balanced against the risks to companies of creating competitors and the potential implications for their market prospects.
Secondly, the author shows us through different tables the mode for foreign companies investing in China. Compared to licensing, which occupies 21% of technologies, the joint venture dominates with up to 58% of the technologies associated with this form of transfer. By contrast, only 6% of the technologies involved a one-off sale. Besides, the author made a study concerned the transfer of “ key” part of technologies and got the answer that a dominant 75% of companies had retained key parts of their technologies. A main reason for this appears to be fears concerning the protection of intellectual property rights. At the same time, the author also conducted the question relating to the transfer of R&D capacity to China and plans to transfer such capability in the future, revealed that most the firms, 75% had not transferred R&D and of these slightly over a half had no plans to do...