Technology transfer
Topic: Globalisation and MNCs · NCERT: Class 10, Ch 4 "Globalisation and the Indian Economy"
Meaning
Technology transfer is the movement of technology, know-how and skills from one firm or country to another. MNCs often bring the latest production methods when they work with local companies. This helps local firms make goods faster, with better quality and at lower cost. It is one of the main benefits a developing country hopes to get from foreign investment.
Example
When an MNC sets up joint production with an Indian company, the Indian partner gets the latest production technology as well as money for new machines. Ford's partnership with Mahindra and Mahindra near Chennai in 1995 is an example of this kind of arrangement.
Don't confuse with
- Foreign investment: money spent by MNCs on assets such as land, buildings and machines. Investment is about capital. Technology transfer is about knowledge and skills, although the two often come together.
Related concepts
- Multinational corporation
- Joint production
- Acquisition of local companies
- Outsourcing to small producers
- Glocalisation