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PRESENTATION ON TECHNOLOGICAL ENVIRONMENT

Ketan bhateja Kumara swamy

Technological environment
Technology is the tools and way of thinking to solve the problems and promote progress between the societies. UNCTAD describes it as the systematic knowledge for the manufacture of product for the application of a process or for the rendering of a service and doesn't not extend transactions involving mere sale or lease of goods.

Technology also includes improvements in existing production or distribution of goods and services and entrepreneurial expertise and professional know-how. Innovation is the technical ,industrial and commercial steps which lead to the marketing of new manufactured products and to commercial use of new mechanical processes and equipment.

Different types of innovation


Radical innovation-basic technological innovation that establishes a new functionality.eg .(steam engine) Incremental innovation-change in an existing technology without change in functionality but improves performance, features etc.(improvement in steam engine) next-generation technology innovation-that does not change functionality but dramatically improves performance.( substitution of jet propulsion for propellers on airplanes )

Technology as a competitive advantage-if it lowers cost or enhances differentiation ,first mover advantage such as reputation, profits,favourble access to facilites . Factors of technological dynamics- innovative drive of the company ,customer needs, demand conditions, suppliers offering,competitve dynamics,substitutes,social forces, research organizations and government policy.

Impact of technology on organization


Use of technology to transform the organization . Use of information processing technology as a part of corporate strategy. Technology as part of work environment helps to reduce labor Improves quality, provide better customer service, change the way the firm operates. Factories use it to design parts and control production.

The use of personal computer as managerial workstations . The evolution of computers from a computational device to a medium of communication. Reduce inventories, delivery time,stockouts,rush orders,overproduction,paper work and plan production better.

Process of technology adaption and development


First product innovations than production innovations .The rate of product innovation peaks about the time of introduction of a design standard for the new technology product.Then the rate of improvement for the product declines and the rate of innovation to improve production increases.After the key technologies mature the market will saturate and become obsolete.

All new technologies are awkward to use, costly to produce. The inventors work on improving the original invention. As improvement in new technology slows down new technology or alternative technology will emerge and be adopted.

Time lags in technology introduction /absorption


Many countries in developed world consider developing countries as a market for their obsolete technology. There is time lag between countries in adoption and diffusion of technology. The developing countries lag behind in technology absorption.

Appropriate technology and technology adaption


The technology appropriate in one environment may not be suitable in another. Due to natural conditions like climatic changes or differences in income levels ,scale of operations, demand conditions ,use of customers characteristics. Japan has been successful in technology whereas some developing countries have not been able to adopt to technology.

The latest or highly capital intensive technology in the developed country may not be appropriate in developing country. Many situations require adaption or modification of technology .Modification will enable a company to do better than the users of the technology in its original form.E.G. Washing machines.

Technology transfer
It is the process by which commercial technology is disseminated. Internalized form of technology transfer holding majority or full equity ownership. Externalized form of technology transfer-joint ventures ,licensing, strategic alliances and international subcontracting.

Methods of technology transfer


Training or employment of technical expert Contracts for supply of machinery and equipment. Licensing agreements Trunkey contracts.

Technology licensing to Indian companies is permitted and encouraged under Indian exchange control regulations. Payment of royalties up to certain limits is permitted without any prior regulatory approvals. These limits are lump-sum royalties of US$2 million, and recurring royalties of 5 percent on domestic sales and 8 percent on export sales, based on the net ex-factory sales price of the products. The lump-sum royalties are payable in three installments of one-third on signing of the technology transfer agreement, one-third on transfer of technology, and the balance one-third on commencement of commercial production. These royalty payments may be grossed-up for withholding taxes. For hiring of foreign technicians, no permission is required from the RBI even if it is not explicitly mentioned in the approved agreement.

Technology transfer/licensing agreements falling within the above payment limits do not require any prior regulatory approvals. These agreements would only need to be registered with the Reserve Bank of India. Under Indian tax laws, tax is required to be deducted at source from the gross royalty payments.

Trademark License
The Government of India has allowed payment of royalties towards use of trademarks. Royalties of 1 percent on domestic sales and 2 percent on export sales may be paid towards use of a trademark without any prior regulatory approvals. Payment of royalties in excess of these limits would require the consent of the Reserve Bank of India.

Technical services
In general, the transfer of technicians to India and the payment of technical services fees are permitted without any prior regulatory approvals. Payment could be made for technical services rendered in or outside India. The quantum of fees should be reasonable and relative to the type and extent of technical services. The authorized dealer (i.e. bank) has the discretion to refer any application for remittance to the RBI for specific approval.

Patents
The Indian Patent Office is administered by the Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM). This is a subordinate office of the Indian government and administers the Indian law of Patents, Designs and Trade Marks. It is a legal protection for an invention that is new ,useful to society and is non-obvious to a person possessed of average skill in the art. The patent holder has the exclusive right to make use or sell the patented products or process. It provides an opportunity to recoup the cost of invention ,encourage research and development.

Exclusion of an invention from patentability for commercial exploitation is permitted if it is necessary to protect human ,animal or plant life. Indian Patent Law-The Indian Patents Act lays down :the eligibility ,procedures and conditions for grant of patents; inventions and other subjects not patentable; rights and obligations of patentee; grounds for revocation of patents; matters relating to working of the patent and compulsory licensing; rights of government regarding patented products.

There is provision for grant of patent in addition to the patentee. The patent gets revoked if the grant of patent is found to be invalid. Items not patentable- an invention which is frivolous , which causes serious prejudice to human, animal or plant life or health or to the environment; a method of agriculture or horticulture , any process for the medicinal, surgical, curative, therapeutic or other treatment of human beings or any process for a similar treatment

Product Patent Patent period-20 years from the date of application. Rights and obligations of patentee-the patentee is obliged to make the benefit of the invention available to the public at reasonable price. Working of the patent-means that a product is produced in India and made available at a reasonable price within reasonable time.

Compulsory Licensing-the act provides for compulsory licensing of the patent and revocation of the patents if it is not worked in the country. This means to grant of license to the third party to work the patent in the country. Parallel import-so that the patented product can become available at the lowest international price. Exceptions-any patented product can be imported or used by or on behalf of the government for its own use or purpose. Any person can use a patented process for the purpose of experiment or research.

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