1. Technology transfer refers to the transfer of information, human skills, technical know how and management techniques.
2. Technology transfers can be effectuated through FDI.
3. The share of technology transfer is determined by the willingness of the industrial country to transfer technology to a developing country and the latter’s capacity to acquire and adapt imported technology.
4. SMEs should develop a global orientation through adjustment of their business practices in tune with expectations and trends prevailing in the global market places.
5. SMEs can focus on subsidiary supplies for vertical integration process of FDI by developing their linkages with the main producers.
Globalisation: Implication of Technology Transfer:
1. Technology transfer has revolutionised world trade and dynamism of the global economy.
2. Proper identification of objective and knowledge of their development import eventually required for a developing host country for FDI inflow in establishing the appropriate transfer of technology.
3. The bargaining strength of LDCs is determined by the factors such as:
- Demand elasticity for the product reflects the significance of techno-logy or producer to the host country.
- Size of the market of the host country.
- Humler of alternative sources of supply.
- Infrastructural composition of the host country.
- Relative development and growth stage of the country.
4. Type of industry or activity in which the foreign investment is intended:
- Production related to the domestic market.
- Production related to the export market.
- Resource extraction.
- Domestic commerce/trading.
When a MNC finds that it is not worthwhile to invest directly in the country it may still sell the technology profitable through:
5. Licensing agreement
6. Turnkey operation
7. Management consultation package
8. Joint ventures