TECHNOLOGY TRANSFER BASICS

Technology transfer is an important tool for economic development. Although the concept is well known and quite mature in the advanced economies of North America, Europe and East Asia, it is still not well understood in developing economies. However, if practiced properly, technology transfer can contribute significantly to those developing economies, not just in job creation and increased gross domestic product, but also in promoting innovation to make those economies more competitive globally.

So what is technology transfer anyway? Well, the Association of University Technology Managers defines technology transfer as:

… the process of transferring scientific findings from one organization to another for the purpose of further development and commercialization.

This definition is properly board, because technology transfer can occur between any two organizations, whether they are government, university or private entities.

The process of technology transfer starts with identifying new technologies that are developed as a result of research activities. Particular attention is paid to research activities that result in new technologies that can be commercialized by being developed into products to be sold in the marketplace. Such technologies are valuable, because once a product idea has been developed, it is easier to commit the required investment funds to develop the product. Early stage research that is still far from commercialization is more challenging, since there is more risk involved. However, it can also be successfully transferred in some cases.

Once a candidate technology has been identified, it is protected through the use of Intellectual Property protection tools such as patents and copyrights. Such IP protection gives a much greater value to the technology, since it confers upon the owner of the IP the right to prevent others from making, selling or importing the technology. The resulting IP can then be sold or licensed resulting in economic benefits to the researchers who developed it, and at least partially covering the costs of developing the technology.

Of course, many companies that develop new technologies do not transfer the resulting IP, but rather commercialize the technology internally and develop competitive and innovative products. Another option is to create a new spin-off company to pursue commercialization of the IP. However, in some cases, companies determine that at least some part of their IP portfolio is underutilized or not utilized at all. This could be for a number of reasons, such as the lack of funds to commercialize the IP, or simply because the company had changed its focus and is pursuing a different field of technology. In such cases, companies can monetize this idle IP by either licensing or selling it to other interested parties.

In the case of government research labs and universities, the case for technology transfer is even greater, since they typically do not develop and sell products. Commercialization of their IP is done through marketing the IP to interested private companies, and then selling or more typically licensing it. Another option is to encourage the creation of new start-up companies that can take the IP and commercialize it.

In summary, technology transfer unlocks a huge amount of economic potential, by facilitating the transfer of IP between entities. Rather than IP remaining idle, it enables it to be put to good use in creating new and innovative products. Companies developing these products benefit economically by putting these new and competitive products on the marketplace. Research labs, whether government, university or private, benefit by recouping at least some of the costs of their research, which enables them to be involved in further research. All these activities create new jobs and stimulate the economy, as well as promoting innovation, which makes an economy more advanced and competitive.