How To Understand International Technology Transfer
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1 A Study on International Technology Transfer Critical Factors in Hong Kong / Pearl River Delta Manufacturing Industries DONG Qiuling MASTER OF PHILOSOPHY CITY UNIVERSITY OF HONG KONG JULY 2008 i
2 CITY UNIVERSITY OF HONG KONG 香 港 城 市 大 學 A Study on International Technology Transfer Critical Factors in Hong Kong / Pearl River Delta Manufacturing Industries 對 香 港 / 珠 三 角 地 區 製 造 業 於 國 際 技 術 轉 移 中 的 重 要 因 素 之 研 究 Submitted to Department of Manufacturing Engineering and Engineering Management 製 造 工 程 及 工 程 管 理 學 系 in Partial Fulfillment of the Requirements for the Degree of Master of Philosophy 哲 學 碩 士 學 位 By DONG Qiuling 董 秋 玲 July 2008 二 零 零 八 年 七 月 ii
3 Abstract International Technology Transfer (ITT) has been increasingly an important issue in technology diffusion, and has accumulated a vast body of research over past years. ITT is a process by which a technology supplier communicates and transmits the technology through multiple activities to the receiver, across national borders. Successful ITT provides benefits for all parties including suppliers, technology supplying countries, technology receivers among others, and its importance for economic development can hardly be overstated. ITT has become more and more important in Hong Kong / Pearl River Delta (HK/PRD) region over the past two decades. However, ITT project is complex and risky. As transferees, those companies are often confronted with technological or managerial problems which hinder the success of ITT. This makes the technology strategy and management more essential in implementing ITT. This study aims to improve the strategic decision making process and enhance effectiveness in managing ITT projects for manufacturing companies in HK/PRD region from transferees perspective. Through intensive literature review, the study identifies a series of ITT critical factors which are categorized into a 3-stage framework, namely, Setting objectives, Evaluating partners, and Managing implementations. During the first stage, companies decide whether to launch an ITT projects by considering incentives related to financial benefits, market & competition, and technology & skills. Once the initiatives of ITT project are confirmed, evaluations are conducted upon country-level, organization-level, and technology-level factors for choosing the right technology suppliers in the second stage. In the third stage, an appropriate transfer i
4 strategy is necessary to encourage the assimilation of the new technology, more importantly, to enhance the transferees technology capability in the long run. Effective management and control systems are required to ensure the smooth ITT project execution in this stage as well. This study also includes industrial surveys and company interviews, conducted mainly in electronic/electrical industries in HK/PRD, for factor verification and up-to-date insights on the ITT issue. The results from 110 valid survey responses and 5 expert interviews confirm the significances of the proposed ITT factors. Besides, managerial implications have been found in the following aspects: i). Hong Kong and other businesses in the Pearl River Delta can better integrate themselves to create a seamless technology network; ii). Hong Kong companies should emphasize their strengths in areas that favorite the transfer such as the IPR trading services and legal protection etc.; iii). Competitive technical edge and in-house capability should be built for smooth transfer process and effective transfer outcomes; iv). Companies should take every possible opportunity to seek for ITT cooperation by showing their own strengths. The established 3-stage framework together with managerial implications found help manufacturing companies in HK/PRD to improve their strategic decision making and enhance effectiveness in the ITT projects. On the other hand, the study also provides the ITT transferors in the western countries useful information to understand the thinking of their counterparts so as to enhance the success rate of ITT between the East and the West. ii
5 Table of Contents Abstract... i Acknowledgement... iii Table of Contents... iv List of Tables... vi List of Figures... vii CHAPTER 1 Introduction Background Project Justification Aims and Objectives Aim Objectives Scope of the Research Research Methodology Outline of the Thesis CHAPTER 2 Literature Review Background of International Technology Transfer (ITT) The Nature of Technology The notion of International Technology Transfer (ITT) The Process of ITT Projects Trend of Technology Imported by Chinese Enterprises Hong Kong/Pearl River Delta based Chinese Manufacturing Industries Prior ITT Models & Theories Concluding Remark CHAPTER 3 Critical Success Factors for ITT Categorization of ITT Critical Factors Setting Transfer Objectives Increase in Profits Market & Competition Acquisition of Technology Evaluating Transfer Partners Country-level Factors Company-level Factors Technology-level Factors Managing Transfer Implementation Transfer Strategy iv
6 3.4.2 Transfer Control & Monitoring Concluding Remark CHAPTER 4 Survey on Current Situation of ITT Questionnaire Survey Design Target Population Questionnaire Design Pilot Study Survey Analysis Tools Survey Results and Discussion Respondent s Background Information ITT Practices in Hong Kong Industries Verification of ITT Critical Factors Discussion on the Survey Results Evaluation on Critical Factors Differentiation among Companies Implications from Industrial Survey CHAPTER 5 Expert Interview on Current ITT Practices Expert Interview Objective of Expert Interview Expert Interview Methods Questionnaire Design of Expert Interview Analytic Hierarchy Process (AHP) AHP Methodology Expert Choice Software Expert Interview Results The Profile of the Experts The Prioritization of ITT Critical Factors The AHP Hierarchical ITT Framework Expert Interview Discussion The Discussion of Factors Prioritization Comparison between the Industrial Survey and Expert Interview Implications from Expert Interview CHAPTER 6 Conclusions Achievements Limitations and Suggested Future Work References Appendices v
7 List of Tables Table 2.1: Index of China s Technology Import Table 2.2: Percentages of different types of technology import (%of project numbers) Table 2.3: Management Decisions during ITT Projects Table 2.4: Decision Criteria Relevant to ITT Projects by Wagner Table 2.5: Learning Processes in Technology Transfer by Claude Table 3.1: Summarization of ITT Critical Factors Table 4.1: Companies Competitive Advantages and Strengths Table 4.2: The Application and Effectiveness of the Imported Technology Table 4.3: The Extent of Difficulties in Handling ITT Projects Table 4.4: The Scores of the Critical Factors of ITT Projects Table 4.5: Mean Comparison between Companies with Different ITT Background Table 4.6: Mean Comparison between Companies with Different R&D Conditions Table 4.7: Mean Comparison between Companies with Different Profit Changes Table 4.8: Mean Comparison between Companies with Different Revenue Ranges Table 5.1: Verbal Judgment or Preference Numerical Rating Table 5.2: The Profile of the Experts in Expert Interview Table 5.3: The Inconsistency Indices of the Expert Interview Table 5.4: The AHP Results for the Expert Interview Table 5.5: Normalized Priority Weights of ITT Critical Factors Table 5.6: Comparison of Factor Prioritization between Experts and Industries vi
8 List of Figures Figure 1.1: Flow Chart of Research Methodology Figure 2.1: 13 Dimensions and Development Cycle of Technology Figure 2.2: The Strategic Approach to Technology Transfer Figure 2.3: Possible level of alliance of technology transfer Figure 4.1: ITT Conditions Figure 4.2: Respondents Experience in ITT Projects Figure 4.3: Location of the Factories Figure 4.4: Years of Establishment Figure 4.5: Companies Sales Range in 2006 Figure 4.6: Changes in Sales in Past 5 Years Figure 4.7: Primary Business Activities Figure 4.8: Main Business Market Figure 4.9: Companies R & D Activities Figure 4.10: Main Challenges Facing by the Companies in the Foreseeable Future Figure 4.11: Companies Experience in ITT Projects Figure 4.12: The Main Transfer Mode Adopted by Companies Figure 4.13: The Nationality of the Transferors Figure 5.1: The AHP Hierarchical Framework of ITT Critical Factors vii
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