Though, broadly speaking, the `D’ of R&D covers Technology Development, the latter, has much wider connotation. Determine technology development is called for the latter has much wider connection. For better understanding, more elaboration of various factors that determine technology development is called for.

Determinants of Technology Development

Figure-1 : Determinants of Technology Development

Figure-1 shows the determinants and their inter-relationship in technology development from R&D to technology diffusion and substitution. Natural resources are mobilised and processed, through the succeeding stages. The supply factors include natural resources, human resources, fund allocation, and produced resources. The demand side factors include market potential venture capital and enterprise profitability. The coordinating organisations, supporting facilities and government policies and systems have a major role to play in the success of the technology development process. Figure-2 shows the various stages of technology development cycle, starting from the generation of ideas in the R&D department. It may be observed that this process is a tedious one and requires top management commitment and from outside. Risk factor is large and the success rate depends upon the quality of inputs provided to the R&D department.

Technology Development Cycle 

Figure-2 : Technology Development Cycle 


i) In-house R&D : Technology development activities are generally carried out through setting up of separate in-house R&D units within the corporation, managed and headed by a well qualified and experienced chief, directly reporting to the top management. However, this unit has close interactions with other departments within the company and there could even be exchange of personnel among the different departments. The strength and facilities in the in-house R&D unit would depend upon the technology policy of the company and the nature of the business. In large companies, there are sometime R&D labs for each department and a central R&D lab for major R&D projects. Industrial R&D is mostly product or process oriented with specific objectives and time schedule; and not basic research. Incremental developmental efforts or import substitution efforts are generally common in most of the industries in developing countries including India, while emphasis is on new technologies or new applications of technologies in advanced countries.

ii) Cooperative R&D : A group of companies in a particular industrial sector promotes an R&D centre as a society or a non-profit making company, the expenses for which are met from the contributions of the participating companies (as a fixed percentage of their turnover) as well as grants from the governments. This centre undertakes R&D as per the requirements of the companies in their larger interest, and sets up expertise and facilities of common nature and which are usually expensive. A company can also sponsor specific projects to this centre. Cooperative research facilities are normally utilised for the projects which are not of secretive nature from the business point of view or first substantial part of the R&D can be done at the centre and the remaining part involving finer details or critical technological aspects effecting the competitiveness is done at the in-house R&D division of the company. National Council of Building Materials (Cement) at New ‘Delhi, Textile Research Centre at Ahmedabad (ATIRA), are example of this type in India.

iii) Contract Research:  A company may contract components of technology development to suitable R&D organisations, academic institutions, or consultants or experts, and its in-house R&D unit may coordinate the progress of the activities, to develop the desired technologies. This approach usually requires considerable internal technical and managerial capabilities coupled with a strong S&T information base.

iv) R&D collaboration : A company may collaborate with another company in areas of common interest if costs of development are high. Such inter-firm collaborative R&D efforts are becoming common in developed countries mainly due to high costs and shorter technology life cycles, in areas such as micro-electronics, materials, information technologies, Ho-technologies, and so on. A firm may also collaborate with the public funded or privately funded R&D institutions on case-to-case basis where R&D results are shared mutually and so are the expenses. A company in India navy even collaborate with another company or R&D institution abroad, on mutually agreed terms. The Govt. of India encourages such collaborations. In such cases, relative advantages of the collaborative partners are the main guiding factors, and is one of the ways to avoid large technology payments in future.

v) Research Societies : Large corporations or industrial houses may set up independent research societies, in addition to their in-house R&D units. Such societies may undertake R&D activities mostly relating to the broad interests of the promoting companies in line with the national interests. They will also take advantage of those facilities for the activities/programmes in their in-house R&D unit. Governments usually encourage such societies and provide several tax concessions and fiscal incentives.

vi) Research Companies : Large corporations of technology innovative entrepreneurs may promote research companies, specifically for conducting research and development of technologies for others on commercial basis. The development costs and reasonable profits are recovered from the sale and transfer of technologies.  Such a concept is common in USA and other developed countries, while it is yet to gain recognition in developing countries such as India. A company may adopt any of the approaches or a combination of the approaches depending on its needs and resources. In all the cases, however, in-house technology development capabilities are essential to achieve optimum results with minimum inputs and enhance its competitive position in the acquisition of technology or in the market.

Generation and development of technology is a complex process involving several parameters and steps ranging from concept; and basic research to utilisation of technology, taking into account the social, economic and political environments or factors at national and international levels, as well as the business strategies of a corporation or a firm. A viable technology strategy is important for the continued competitiveness and growth of a firm. The product life-cycles, pricing, marketing strategies, funding, commitment of the corporate management, S&T manpower, are some of the factors that influence or guide the process of technology generation and development. An effective management of R&D and appropriate choice of technology development approaches are important for the success of the technological efforts. The technology development approaches and strategies are different in developed and developing countries as well as for large and small firms. Building of technological capabilities is important for sustained growth and need higher investments for firms, operating in emerging technologies, compared to those operating in areas of matured technologies. National policies and S&T infrastructures are also important ‘for the technology generation-and development policies at firm level.

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