Technology transfer vs. diffusion: A conceptual clarification

Technology transfer and diffusion are often used interchangeably and applied to diverse phenomena. Policy needs to distinguish between them. Transfer of knowledge and legal rights to produce a new product is constrained by the owner's concern for a return on innovation; diffusion of use is restricted by willingness and ability to adopt it. Speedy diffusion of use rewards the innovator; premature or inadequately rewarded transfer undermines incentives to innovate. The conflict occurs with product innovations, but may not arise with process innovations, whose diffusion is also contrary to the interests of the innovator unless compensated. Factors favoring and hindering technology transfer, and conditions affecting the rate of diffusion of use, are briefly considered.