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Technology absorption :refers to the acquisition, development, assimilation, and utilization of technological knowledge and capability by a firm from an external source. The transaction occurs between transferring and receiving organizations.

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1.Adoption

2.Adaption

3.Absorption

4.Optimisation

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ADOPTION: Technology absorbed without changing the parameters of acquired technology is called technology adoption.

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ADAPTION: It is a phase that takes place after

a technology has been adopted and put into use in production activities/facilities. The process under which the various features of the technology which is the subject of transfer are suitably modified, changed or altered keeping in the view the needs of the buyer. During this stage, a number of alterations and modifications to suit the indigenous conditions are made and they may relate to the use of raw materials/components manufactured. It covers both product modifications as well as production technology changes, using indigenous skills as well as local materials.
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ABSORPTION: It involves Know-why exercises, basic investigations into the product and or process and or systems. This will require unpack aging of a technology package. It requires R&D projects in know-why, optimization and improvement of product/process/systems and related equipments.

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OPTIMISATION:t is the effective savings in the use of material and energy consumption both in product and processes which constitute optimization of technology

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Technology Absorption involves following four basic components: Hardware refers to particular physical structure of components & also their logical layout which are subject matter of absorption. Software - refers to Know-how of carrying out tasks to achieve goals & objectives. Brainware - refers to application & justification of hardware, software development, know-what & knowwhy of technology. That is what to employ, how, when, where, and why. Support Net - refers to complex network of physical, informational and socioeconomic transformations that support the proper use and functioning of given

technology.

PROJECT FORMULATION

TECHNOLOGY IMPROVEMENT AND UPGRADATION

PROJECT EXECUTION

TECHNOLOGY ABSORPTION
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Prefeasibility report/project report Technology negotiations Approvals/clearances with Government Foreign collaboration agencies Funds from financial institutions Land Acquisition Clearances from State Govt. and other bodies for power etc

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Technology Transfer. Design/know-how, experts, training Use of Indian consultants Procurement of equipments, components and materials. Payments for technology, RM, and equipments. Project implementation.

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Trial runs Debottlenecking /rectifications Production based on selective imports of components/RM Indigenization of RM/ components, equipments. Adjust product/process technology to suit local conditions.

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Analyze and unpackaged technology Investigate product/process designs and technology. Optimize technology for higher quality and performance. Design; develop components/raw materials/equipments. Use research linkages.

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Improve product/process designs and technology for better performance/utilization. Use Research linkages. Upgrade product/process to reach larger scales/capabilities. Benefits of technology Absorption and up gradation Repeated collaborations for the same product/process are avoided. Acquisition of further technologies becomes selective. Ability is developed to unpackaged technology.
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Savings can be affected in foreign exchange. l Effective utilization can be made to achieve desired results. l Exports are increased. l Know-why and technology up gradation capabilities are built up. Technically competent groups of scientists and engineers trained in technology absorption get matured and strengthened. The base for technological self-reliance is enhanced. Product and Process cost saving can be done. Increase in sales and profits.
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Industry should attempt to obtain best available technology closest to international trends and provide R&D at the stage of project planning. Speedy indigenization of raw materials and components. Efforts for unpack aging of tailor-made equipments in the acquired technology

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Diffusion is the process by which a new idea or new product is accepted by the market. Technology Diffusion means the spread of applications / usage of a new technology and its related products, services or processes from one nation to another; from one entity to another; from one industry to another; from the owner entity to user or supplier; and from current user to the prospective user. Technology Diffusion means the study of how, why, and at what rate new ideas and technology spread across the economy.

According to Everett M Rogers theory, the diffusion takes the shape of bell curve in terms of number of adopters over the passage of time and takes the shape of S-curve or Logistic curve in terms of cumulative number of adopters over the passage of time. Various studies show that with the passage of time, technology and innovations get diffused from innovators to followers; and lastly to laggards. the trend of the percentage of organizations that adopt a new technology and innovations over a period of time - in cumulative terms takes the shape of S Curve; also called Logistic Curve. It is shown in the figure as follows:

Performance Characteristics

Technology Progression
Technology Regime 2

Technology Regime 1

Laggards

Technology Follower

Technology Leader/ Innovator

Time

During the intial stage i.e. innovation stage, technology and innovation gets diffused within the innovative organizations. Such organizations usually follow technology leadership strategy. During next stage i.e. consolidation stage, diffusion takes place amongst major competitors. During the last stage, i.e. mature technology stage, diffusion spreads to laggards. These laggards are, usually, risk-averse and small organizations or small market players. The rate of learnings / spread amongst various entities is influenced by profitability and investment required.

Product diffusion is a case of innovation diffusion. According to Everett M. Rogers, for any given product category, there are five categories of product adopters: Innovators venturesome, educated, use multiple information sources, possess greater propensity to take risk (2.5%), Early adopters social leaders, popular, educated (13.5%),. Early majority deliberate, many informal social contacts (34%),. Late majority sceptical, traditional, lower socioeconomic status (34%) Laggards neighbours and friends are main information sources, fear of debt (16%).

Product diffusion takes the shape of bell curve in terms of number of adopters over the passage of time and takes the shape of S-curve in terms of cumulative number of adopters over the passage of time. This is shown in the figure as follows.

Diffusion is not one-way traffic. The innovator can also learn from imitator. Diffusion is not once- for-all occurance. It is cyclical in nature. Diffusion can take place in varying degrees: IntraFirm - diffusion of lowest degree ; InterFirmdiffusion of medium degree; Economy widediffusion of highest degree. Diffusion can take place in variety of forms viz product , service or a process: use & production; stock of technological knowledge

The pattern of diffusion i.e. shape of S-curve is Influenced by profitability and investment required,

Prior to 1990, rate of technological change has been slow due to cold war between USA & USSR, restriction on MNCs, existence of high trade barriers across countries. Since 1990s rate of technological change has become faster. This increased rate of technological change is noticeable in following areas: Most of nations have adopted formal technology development policy and aim at gaining technological progress / advancement.

Innovations (new product / process developments) are no more confined to developed world. They can take place anywhere, anytime.

Contd Globalisation of technology is taking place at a faster pace due to variety of factors Technological development is becoming highly customer-oriented. As the customer needs & tastes are increasing and changing, technological changes are increasing. Decreasing payback period to derive benefits of technology development Time compression decrease in time available in various activities / phases of technology development There is faster movement of products and services from Research & Development center to markets (reduction in lead times).

Contd There is increasing focus on simplification of products viz journey from earlier big computers to modern portable computers; emerging nano-technology. There is more focus on ergonomics (human convenience to use) Technology life cycle is getting shorter due to fast technological changes or technological discontinuties. Product life cycles are decreasing due to fast changes in consumer needs, increasing awareness about new or improved technologies. Technological change may occur not only due to development of improved / hybrid / new technology but it can occur even due to some development in unrelated technology.

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