Commercial assets are system specific and owned by a legal entity and may be specific to certain firms,

Transfer costs; the costs involved in transferring this from one entity to the other may be high as
compared to non-commercial assets in technology which is commonly available and incur low
transfer costs (Booth, 2000; Carr, 1999; Russell, 1997; Sahlman & Haapasalo, 2011).
However, we cannot limit ourselves only to defining technology but also need to expand
the scope to management of technology, since that will also help us understand how technology
is transferred across organizations. Today’s competitive environment is constantly seeing rapid
change in technological, social and economic scenes. The management of technology therefore,
is an important ingredient for sustainable competitive advantage.

Companies in want of technology can chose to acquire another firm, go for a joint
venture where the interests of the parent firms result in the formation of a new distinct
organizational entity where profits and losses are shared in the proportion of the equity
investment that has far reaching consequences or go for licensing arrangements that regulate
transfer of technology in return for a fee, which has lesser consequences than the more committal
agreements

Joint research pacts and joint development programs are arrangements which are largely seen
and documented in alliance literature as vehicles of reducing cost, minimizing risk and allow for
synergy between partners (Hagedoorn, 1990b; Young-Ybarra & Wiersema, 1999). In licensing
there are two types the standard licensing , where the proprietary rights of one company are sold
to another in exchange for a payment, however papers covering this theme have constantly
argued that such an arrangement serves as a conduit of older technology from the donor to the
recipient firm.
However in recent decades with the gap in the technology coming closer a research on the
concept of cross-licensing or mutual second sourcing is gaining momentum. Here companies
swap technology licenses so as to avoid patent infringements. This type of licensing agreement is
seen to foster a more advanced form of technology reallocation as compared to the traditional
licensing route. Studies have shown that such licensing agreements are having a positive
implication when it comes to reducing technological hassles and time to market. Mutual
Licensing agreements also result in economies of scale since two firms now engage in the same
kind of technology and therefore give an incentive for increasing the scope of suppliers in an
industry.

cost of technology is therefore defined as the total cost of payments of proprietary and non-
proprietary technology, assets, technicians, training expenses and machinery. Cost of technology
transfer on the other hand deals with cost of transferring and absorbing the unembodied
knowledge, costs of performing various activities which have to be conducted to ensure the
transfer know how is the true cost of technology. The cost of peripheral support is also included
in the cost of technology transfer (Baldwin, 1994; Teece, 1977). Also the cost of communication
or information transfer is a crucial factor in influencing the diffusion of technology in global
markets (Arrow, 1969)

Technology is information that is put to use in order to accomplish some task. Transfer
is the movement of technology via some communication channel from one individual or
organization to another. Technology is the useful application of knowledge and
expertise into an operation.
Technology transfer usually involves some source of technology, group which posses
specialized technical skills, which transfers the technology to a target group of receptors
who do not possess those specialized technical skills, and who therefore cannot create
the tool themselvesThe first requirement for an organization to transfer a technology is
to establish legal ownership of that technology through intellectual property law. There
are four generally recognized forms of intellectual property in industrialized nations:

 patents, dealing with functional and design inventions

 trademarks, dealing with commercial origin and identity
 copyrights, dealing with literary and artistic expressions
 trade secrets, which protect the proprietary capabilities of the firm

Most technology transfer takes place because the organization in which a technology is
developed is different from the organization that brings the technology to market. The process of
introducing a technology into the marketplace is called technology commercialization. In many
cases, technology commercialization is carried out by a single firm. The firm's employees invent
the technology, develop it into a commercial product or process, and sell it to customers. In a
growing number of cases, however, the organization that creates a technology does not bring it
to the market.

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