Technology Transfer Structures - Decision supporting questions the management must itself first.

To help management arrive at a decision when considering what are the right structures for introducing their technology to a new market, the management could take help of the Technology-Transfer Decision Support System (TT-DSS) ©.

Some of the questions that the TT-DSS will prompt to the management, which it must answer to the best of their abilities when considering the appropriate structure for their market entry, are listed below. These are in four broad categories: 

·        Market

·        Technology & Industry

·        Management capacity and readiness

·        Resource availability and risk appetite.

A. Market

1. What is the size of the market and how big is the potential of it for my business? The higher the potential for the business, the higher up you want to go on the complexity curve.
   

2. Is the market in the same economic/trade zone with little barriers to entry? For instance, if the business is in the EU single market or in any other such trade partnership, then it is possible to have a centralised presence and with a network of sales agents/agencies.
   

3. Can you service the market from your current base, or do you need a full-fledged presence? A range of issues may require a company to establish an in-market presence such as regulatory compliance, need for rapid response after-sales service, or even language.
   

4. What is your competition doing in the proposed market? Are you ceding control or market-share to your competitors, as once clients commit to technology platforms the switching costs are too high.
   

5. What are the commercial pricing benchmarks? Are the pricing benchmarks same as your home market or are they radically different such as those in emerging markets. If the latter, then you will need to first understand the prevailing market structures. Furthermore, if there is a major price differential, then you will also need to assess on how to localise the supply chain to be able to serve the particular market or region.

B. Technology & Industry

1. Whether the technology is just a component, a consumable or the complete-system If the technology is a complete-system in its own right, then the level of technical sales efforts required will be high, and would warrant a structure that requires a strong partnership or a significant local presence. For solutions that are mere components or consumables, basic structures such as exporting or having a local distributor would suffice.
   

2. Do you need local manufacturing or supply chain? Technologies that require adaptation to local pricing conditions, would need to establish local supply chain and systems integration. This definitely makes sense if the target markets are large and growing.
   

3. Does your technology have a significant Intellectual Property in form of patents and know-how? If the technology is protected through patents and strong in-house know how, and the company wants to carry on protecting that position, then it must look to opt for structures that are wholly-owned.
   

4. How long and complex is the sales cycle? If the sales cycle is complex and long, then the local structure would require a strong and permanent presence in the market. This is even more pronounced for business-to-government (B2G) segments.

C. Management Capacity and Readiness

1. How aware is the management of the market dynamics? Is the management fully aware of the complexities of the market, the regulatory requirements, conformance to local standards, competition, market-growth, segment economics, tax-compliances, capital controls and how to create a vantage position for the technology.   The Technology-Readiness Level (TRL), Commercialisation Readiness Level (CRL) and Impact Readiness Level (IRL) scores can help management assess where they stand and the level of distance they need to travel to be successful in the target market.
   

2. Have you decided what are the rules of engagement with the partner and what the partner expectations are? Going into a collaboration will require clarity of purpose and how the partnership will evolve during the lifetime of the collaboration. Does the partnership have the aspiration for a dominant market position, or is the goal just to service and hold the current position. A critical decision the management has to make when going into the partnership, is whether it is fit-for-purpose for to grow the market share. Do both partners have what it takes to grow the business, and are both being rewarded fairly for their contributions in all stages of the alliance.
   

3. Are you willing to hire local senior managers and empower them in decision making? As companies grows its presence in a new market, it will have the need to put in place a senior management layer to deliver its stated goals. Controlling the managing remotely through headquarters is a complaint heard far too often and one that demonstrates lack of confidence in the local team. Similarly, the local team cannot and mustn’t use the “market complexity” as a bogey to hide behind the lack of delivery. Therefore, establishing trust on both sides is essential to the success of achieving results in the target market.

D. Resource Availability and Risk Appetite

1. Do the management know all the risks inherent? Risks could manifest in many ways ranging from systemic risks to industry and value-chain risks. The risks are not uniform across markets, and the management must have a clear understanding of what these risks are before attempting to initiate a technology-transfer process.
   

2. Does the management have the resources to deliver to see through to the point of success? Introducing technology to a new market will most definitely require committed and ring-fenced resources on part of the management. If the management do not have access to adequate resources, then it must search for a partner that is able to make that investment, for which it needs to be compensated. Additionally, the management must set-aside adequate capital to withstand delays, set backs and costs related to compliance and conforming to regulatory standards. There is no greater threat to the technology introduction in a new market, than it getting classed as one unfit-for-purpose for that market. More often than not, this is due to a prolonged period of first-time technology introduction.