International manufacturing and technology transfer: The benefits and risks of knowledge sharing

The transfer of technology is increasingly becoming an important aspect of companies’ international manufacturing operations because they often need to best use their technological resources by sharing proprietary knowledge through some form of technology collaboration. By facilitating joint use of technology, future benefits can be generated that will provide a return to the owner in exchange for transfer. However, since technology is a key business asset that provides distinctive capabilities and competitive advantage, it is only when the perceived transfer benefits outweigh the costs and risks that owners will wish to share their technology with others. On the other hand, acquirers will also bear their own costs and risks to obtain a share of the technology in anticipation of future returns. This paper focuses on how to improve the possibility of greater joint returns through understanding the close link between technology transfer arrangements and the benefits and risks of sharing knowledge. The benefits of transfer are analysed together with the means of realising returns to the owner and for judging the contribution of knowledge to generating benefits for the acquirer. Empirical research data were collected from the machine tool industries in the UK and China. The evidence presented derives mainly from three questionnaire
surveys and is supplemented by explanations drawn from case studies.