The knowledge based economy is an economy based on innovation. Implementing innovation requires acquiring new technology, using the technique of technological transfer. The problems and the timing for implementing an emerging technology are under discussion in this paper.knowledge based economy, innovation, technology transfer, emerging technology

FRASINEANU Corina

FRASINEANU Ioan

HÎNCU Daniela

English

Research Papers in Economics

Management Management Management Management    
 
 
 
 
 
Economia. Seria Management        Vol.12, Nr. 2/2009 
 
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The role of technological transfer 
 in the societies based on knowledge economy 
 
                                                 
                                 
 
 
              
The Bucharest Academy of Economic Studies, Romania 
e-mail: daniela.hincu@man.ase.ro 
    I             
The Bucharest Academy of Economic Studies, Romania 
e-mail: frasineanuc@yahoo.com 
    I      I    
The Bucharest Academy of Economic Studies, Romania 
 
 
Abstract 
The knowledge based economy is an economy based on innovation. Implementing 
innovation  requires  acquiring  new  technology,  using  the  technique  of  technological 
transfer. The problems and the timing for implementing an emerging technology are under 
discussion in this paper. 
 
Keywords: knowledge based economy, innovation, technology transfer, emerging 
technology 
 
Rezumat 
Economia bazată pe cunoaştere foloseşte intens inovaţia. A introduce o inovaţie 
presupune  dobândirea  unei  noi  tehnologii,  utilizând  tehnica  transferului  de  tehnologie. 
Articolul  abordează  problemele  şi  momentul  optim  de  transfer  al  unei  tehnologii 
emergente. 
 
Cuvinte-cheie: economia bazată pe cunoaştere, inovaţie, transfer de tehnologie, 
tehnologie emergentǎ 
 
JEL Classification: O14 
 
Introduction 
 
e  are  living  now  in  a  society  characterized  by  a  new  kind  of 
economy:  the  knowledge  economy.  It  is  defined  (Knowledge 
economy, n.d.) as an economy based on creating, evaluating, and 
trading knowledge. In a knowledge economy, labor costs become progressively  W Management Management Management Management    
 
 
 
 
 
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less  important  and  traditional  economic  concepts  such  as  scarcity  of  natural 
resources and economies of scale cease to apply. The main technologies valued 
here are the information and communication technologies, known as ITC, but, in 
fact, all the structures of the economy are affected (Powell and Snellman, 2004). 
The economic competition, whose effects cover now the entire world, due to the 
high speed and accessibility of information, is one of the most important changes. 
Another  definition,  largely  used,  defines  the  knowledge  economy  as 
production and services based on knowledge-intensive activities that contribute to 
an  accelerated  pace  of  technical  and  scientific  advance,  as  well  as  their  rapid 
obsolescence  (Popescu,  Meghea,  and  Pincovschi,  2006).  Maybe,  here,  the  key 
word is rapid obsolescence. That means that products and technologies, from all 
fields, are continuously changing. As  change  is  brought  by  innovation,  we  can 
conclude  that  innovation  plays  an  essential  role  in  the  knowledge  economy. 
Perhaps, the change has always been wanted by the people, as shown by the Kano 
diagram  (Figure  1).  Studying  the  customer’s  satisfaction,  Kano  (What  is  Kano 
Model, n.d.; Kano model, n.d.) finds that a product having the same performances 
but that is obtained in a new way offers much more satisfaction, just because it is 
new.  
 
 
 
Figure 1. Kano’s diagram  
(Source Kano Model, n.d.) Management Management Management Management    
 
 
 
 
 
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Of course, this has always been true. But, in the knowledge economy, the 
information goes very fast, so do innovation, which always implies something new, 
thus imposing itself easily. 
 
Innovation in knowledge economy 
 
The knowledge economy, imposing innovation, new technologies, much 
more  informatics,  changed  the  structure  of  all  economies,  in  practical  all  the 
countries (OECD, 2004; Economic Forum, 2006). Only the innovative companies 
can resist on the market, so one of the main tasks of the organizations is now to 
manage knowledge and people able to create and use it. Also, all organizations, big 
or small, have to protect innovations or new ideas, by patents. An invention can be 
protected by a patent if it fulfills three conditions to be protected by a patent. It 
must be of practical use; it must evince an element of absolute novelty, that is, 
some new characteristic which is not known in the body of existing knowledge in 
its technical field and it has to be able to be put in practice (Jaffe and Trajtenberg, 
2002). 
The economies who are able to valorize the innovation faster and  very 
efficient are the first to obtain a good position in the very competitive world that 
appeared due to the very fast circulation of information. Here, the most important 
are  the  innovations  concerning  new  products  or  services  but  also  these  who 
enhance  the  productivity.  Information  and  communication  technologies  (ICT) 
allow large increases in productivity, e.g. in retail and wholesale activities (Nayak, 
2007).  The  aim  of  implementing  new  innovations  can  be  different  in  different 
countries: for the high developed countries, it is important to create new products, 
services  and  technologies:  for  less  developed  economies,  improving  the 
productivity can be the best solution.  In both cases, adopting innovations supposes 
a sustained investment in R & D activities, a good partnership between industry, 
research institutes, universities and government as well as a  good protection of 
intellectual property. Governments have to sustain a specific policy of innovation, 
adapted  to  each  country.    Of  course,  small  and  poor  countries  are  not  able  to 
sustain large R & D projects, but they can encourage small innovative increments, 
which can be applied in small organizations without serious difficulties. Such small 
innovations, cumulated, can improve considerably the economic performances of 
the  country  (Torun  and  Cicekci,  2007).  But,  here  is  another  condition:  new 
innovations have to diffuse in an efficient mode. At first, the diffusion takes place 
in the economic field where it was created. In the second step, the innovation can 
pass to other sectors, bringing here considerable advantages (Shaffer, Deller and 
Marcouiller, 2004). 
The diffusion of innovation in the economic field where it was created can 
be illustrated in Figure 2. 
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Figure 2. Different types of adopters of a new technology 
(Source: Bǎloiu, and Frăsineanu, 2004) 
 
The innovators are few and daring. The early buyers have a solid position 
and they can influence the decision of the others. The late buyers are companies 
with a low mobility and probably they will not resist very long time in the market. 
The majority will adopt the new technology when their old technology is no more 
competitive. The no buyers will probably never adopt the new technology and will 
disappear soon. An example of such no buyers was the steel mill in Reşita. They 
keep using the Siemens–Martin fours, much more expensive that the technology of 
oxygen converters and finally, in the early 2000-th, were eliminated.  
A  technology  passing  from  an  economic  field  to  another  can  bring 
considerable  advantages.  The  testing  of  cars  in  aerodynamic  tunnel  was  first 
adopted by Citroen in 1950 due to the fact that his chief engineer was an expert in 
aviation before coming to Citroen. Another example is the technology of distance 
measurement of biologic parameters. It was used initially in astronautics to follow 
the state of astronauts but now it can be found in all hospitals. A particular field of 
inspiration for technology transfer is the nature, whose systems can be converted in 
technologies. The sonar is probably one of the first such examples.  
Probably, the technology who influenced the most the economy in the last 
period was the informatics. The way it acted can be illustrated in Figure 3 (Génélot, 
1998). 
 
First PCs    Internet    Multimedia   
                 
  Higher productivity    Distance working    Major changes in 
management 
 
Figure 3. Example of interactions between PC technology and economic environment 
 
Another  point  to  discuss  here  is  the  transfer  between  science  (represented  by 
universities and research institutes) and industry. A good example is the field of Management Management Management Management    
 
 
 
 
 
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bio-technology, where the border between research and industrial applications is 
really blur. The same thing is true in what nano-technogies are concerned. As the 
knowledge economy develops, the number of such examples increases rapidly. As 
a consequence, the structure, organization and management of companies have to 
change too.  
 
Emerging technologies transfer 
 
A  process  innovation  frequently  consists  of  implementing  a  new 
technology for a new product. Once created, the emergent technology as well as 
the new product has to be imposed. The problems (Peppard and Ward, 2004) to be 
considered here are: 
o  Market is new and unproven, the results of marketing inquiries about 
the future of the new product are highly uncertain. Information about customers 
and market conditions are hard to obtain and test. 
o  Buyers are first-time users, and the time to impose the product on the 
market can be long. 
o  Marketing  task  involves  inducing  initial  purchase  and  overcoming 
customer concerns; the advertising has to be more elaborate as usual. 
o  Technological  know-how  is  not  mastered;  it  will  probably  change 
several  times  before  stabilization,  following  an  Abernaty  type  schema 
(Christensen, 1997) as first-generation products improved rapidly 
o  Uncertainty about how fast demand for product will grow and how big 
market will get.  
o  Entry barriers tend to be low but problems can appear in securing raw 
materials as well as in implementing distribution channels.  
o  Experience  curve  and  scale  effects  often  permit  significant  cost 
reductions as volume of production becomes larger. 
o  Firms run frequently short of funds for R&D & start-up. 
 
In the second step, the new imposed technology has to widespread and this 
is realized by technological transfer. Technology transfer is defined (Technology 
transfer, n.d.) as the process of sharing of skills, knowledge, technologies, methods 
of manufacturing, samples of manufacturing and facilities among governments and 
other  institutions  to  ensure  that  scientific  and  technological  developments  are 
accessible to a wider range of users who can then further develop and exploit the 
technology  into  new  products,  processes,  applications,  materials  or  services. 
Another  (Chambers,  2005)  definition:  Technology  transfer  is  the  process  of 
developing practical applications for the results of scientific research. It is a term 
used  to  describe  a  formal  transfer  of  rights  to  use  and  commercialize  new 
discoveries and innovations resulting from scientific research to another party. 
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An organization intending to acquire a new technology by technologic transfer has 
to answer to questions such as: 
o  What are the steps in the transfer process?  
o  What barriers exist?  
o  How the potential of emerging technology can to be measured?  
o  How should be shared the value creation along the fabrication chain?  
o  What  is  the  contribution  of  the  new  technology  on  the  organization 
economy and development? Can it induce further innovations? 
o  Is  the  organization  prepared  to  adopt  the  new  technology  (people, 
logistics, etc.)? 
 
The main problem consists of knowing how extensively or how quickly 
can the new technology be adopted in applied contexts and what value does it add? 
The outcome measure of our research is a continuum running from ‘a little’ to ‘a 
lot’. A successful new technology has an evolution as presented in Figure 4. 
 
 
 
Figure 4. The time evolution of a disruptive technology 
Source: (Bower and Christensen, 1995) 
 
If we shall enlarge the perspective, the evolution of the new technology has 
the trend presented in Figure 5, trend known as the S curve (Slocum, 1999). The 
question is: when is the best moment to acquire the new technology? 
The  OA  zone  is  very  risky:  The  technology  is  not  yet  accepted  and, 
statistically, there are 90% chances that it will never be accepted.  
The AB zone is the best, though the cost of its acquisition is the highest. 
So, we have to act quickly, immediately after the point A (Freeman, 1992).  
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Figure 5. Life cycle of a technology. 
Source: (Slocum, 1999)  
 
If the technology is already in the zone BC, i.e. a mature technology, it can 
no more offer a competitive advantage. May be, twenty years ago, it would be a 
good policy for countries less developed. But today, in the globalization era, it 
became useless to come to the market with a non-competitive product or service.  
The  S  curve  is  discussed,  in  terms  of  knowledge  economy,  by  Handy 
(1994) who takes explicitly in consideration the innovation (Figure 6). This is true 
also for the technology transfer: a new technology has to be acquired as soon as 
possible. 
 
 
Figure 6. The S curve proposed by Handy (1994) 
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Handy suggests also that a successful new technology has to start when the 
curve of the old technology is nearing the peak but yet evolving.  
 
Conclusions 
 
In the knowledge based economy, due to the very fast speed of circulation 
of the information, continuous innovation is the main condition of success. That 
means also a continuous transfer of new technologies. This transfer has to be done, 
for each specific technology, in a specific moment.  
 
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The role of technological transfer in the societies based on knowledge economy

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