(GIST OF YOJANA) ENHANCING COMPETITIVENESS THROUGH TECHNOLOGY UPGRADATION -JANUARY-2018

(GIST OF YOJANA)  ENHANCING COMPETITIVENESS THROUGH TECHNOLOGY

UPGRADATION -JANUARY-2018

ENHANCING COMPETITIVENESS THROUGH TECHNOLOGY UPGRADATION

Micro, small and medium enterprises have as strategic appeal globally to policy makers in view of their magnitude in terms of number of enterprises, and contribution in terms of employment, production and exports, among others. They promote inclusive and sustainable economic growth,generate employment, encourage sustainable industralisation, foster
innovation, and reduce income inequalities (OECD, 2017). In the current globalized word, it is imperative to enable MSMEs to adapt and thrive in more open environment and participate more actively in the digital growth and deliver a more inclusive globalization (OECD, 2017).

In the global economy, India occupies a unique status in a view of its long standing policy for the promotion of MSMEs since its independence in 1947. The general merits as well as constraints observed in the international context are applicable to India MSMEs as well. MSMEs contribute significantly to the Indian economy. In 2015/16, he sector comprised
more than 51 million persons and accounted for more than Rs. 8492 billion worth of exports (at current prices): procured about Rs. 18100 billion worth of output (at constant prices in 2012/13) (RBI,2017). In 2014/15, MSMEs accounted for 30.74 percent of the Gross domestic product (GDP); of which manufacturing sector MSMEs accounted for 6.11 percent of theGDP (Ministry of MSMEs, 2017). Thus, MSME sector has grown to be one of the important pillars of Indian economy.

Technology Transfer: Meaning and Importance

In the narrowest definition, technology includes patentable blueprints, plans mechanisms, formulae, and the like (Enos, 1989), and transfer can be limited to the new use of such technology either within a particular firm or by a host country firm or organization (Smith, 1980). Technology can perhaps be better defined as the knowledge whereby economic
efficiency can be improved. Hence, it includes not only the “hard,” possibly patentable, aspects of production, like the specifications of goods and the mechanistic details of their manufacture, but also the “Soft” aspects of business processes, such as organisation, marketing, and other types of managerial knowledge and skills.

Transfer: Objectives, Achievements

The long run competitive position of most individual firms depends on how well they learn to manage and 9ncrease their technological asset bases. The objective of a technology strategy is to guide the firm in acquiring, developing and applying technology for a competitive advantage. A firm’s options range from ‘hightechnological risk decision’ to develop the
needed technology internally, to ‘low technology risk decision’ to acquire a fully functioning technology from another firm. It is the high cost of conducing internal R&D that has resulted in a growing trend towards acquiring new technologies by some other means (Noori, 1990). In general, it is argued that the decision to purchase a fully functioning and a widely used product technology from another firm could result in a superior product quality.

There are various sources through which MSMEs can acquire external technologies. Some of them are as follows:

• Sponsoring a research in a University,
• Supporting employees, education and thereby access candidate technologies,
• Making use of an external R & D centre,
• Employing consultants to help them access the new technologies available in the market,
• Going for licensing, one of the widely utilize methods of technology acquisition,
• Using technical meetings, technical journals and trade shows for assessing alternative technologies,
• Purchasing existing technology either through the vendor/supplier or from any commercial channel.

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The channels and achievements of technology transfer would depend on the source of technology chosen by a firm.Transfer of technologies from the noncommercial to the private sector is increasingly regarded as playing a significant role in tech start-ups, growth of existing business, and new job creation. The majority of empirical literature describes the process of technology transfer as:

(i) Transfer from universities to private enterprises (Parker and Zilberman, 1993; Proctor, 1993),
(ii) Transfer from government promoted labs/support agencies to private enterprises (Code, 1992), and
(iii) Transfer between and within private enterprises (Chakkrabarti, et al, 1993; Palaniswami and Biship, 1993).

Technology Transfer and MSMEs: A Conceptual Framework Technology development is of paramount importance of Indian MSMEs, if they have to remain competitive in the domestic market and penetrate the international market steadily. This assumes significance because technological obsolescence has been one of the most serve problems identified with the Indian MSME sector time and again. That is why technology development has been considered the foremost factor for enhancing the global competitiveness of the Indian SME sector.

Sources and channels of technology transfer: MSMEs technology transfer :MSMEs have multiple sources for technology upgradation through technology transfer , such as:

(i) Technology information and technology assistance are provided by mens of a technology bank maintained by the development commission for micro, small and medium enterprises in the ministry of MSMEs, government of India
 (ii) A university or an engineering institution (such as IITs/ NITs/ IISc or other engineering colleges), can provide lab developed technologies to MSMEs through contract research or
which emerged out of their basic research. TIFAC-MSME programme facilitates such interactions.
(iii) An R & D establishment promoted by the government such as a technology research centre (TRC), which can enable a MSME to source and acquire a technology either locally or from abroad.
(iv) National Research Development corporation (NRDC) which commercializes technologies, developed in council for scientific & industrial research labs located across the country, primarily helps MSMEs in technology transfer.
(v) Cluster development programme of national manufacturing (DCMSEs, 2014).
(vi) A large enterprise (it would be a domestic private enterprise, a public sector enterprise or a Multinational Corporation) with which MSMEs have sub-contracting relationships. To
facilitate MSMEs to produce highquality parts and components, the former will provide technical information assistance and core technology to the latter.

 Achievements of Technology Transfer: MSMEs generally are able to accomplish multiple outcomes through technology transfer. Some of them are:

• Increase in productivity

• Reduction in costs

• Expansion of scale of production

• Diversified produce range

• New product development

• New design products

• Better quality of products

• Penetration of international markets

• Increase in sales and market share

To conclude, technology upgradation (through diverse sources and channels of technology transfer) is desired by MSMEs to achieve multiple objectives such as overcoming technological obsolescence, scale/scope expansion, and/or entering the international market. To achieve technology upgradation, MSMEs go for
technology transfer by scouting for alternative sources. Once a certain source is identified, the channel of technology transfer is finalized and pursued. The accomplishment of technology transfer would enable MSMEs to realize some or all of the objectives leading to an overall enhancement of economic performance and competiveness. In the current era, it is imperative to enable and increasing number of MSMEs to realize technologyupgradation through technology transfer, for the benefit of the sector as much as for Indian economy.

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