In diverse developing countries, including Peru, it is thought that fomenting trade and commerce will automatically cause foreign corporations and free markets to spontaneously transfer technology. This paper shows this is not true. Technology transfer is a complex issue that requires strategic determination, public policies, intermediary institutions and capacities at the levels of the company and of the individuals involved. This study reviews the literature about technology transfer from the viewpoints of the companies and the government, and analyzes eleven case studies about technology transfer and innovation in Peru. Eight major categories of problems to be confronted in the processes of absorbing and transferring technology were detected: 1) individual capabilities; 2) entrepreneurial capabilities; 3) information, cooperation and coordination failures; 4) external connections; 5) infrastructure; 6) funding; 7) institutions; and 8) the existence of systemic and propagating forces. The government should articulate and make the national technological system coherent and seek to comply with the technology transfer agreements established with multilateral international organizations.