Category Archives: Innovation

Thailand’s Vision on R&D

Just outside of Bangkok, I had the pleasure of meeting Dr. Pramote Dechaumphai, Deputy Executive Director of Thailand’s National Metal and Materials Technology Center (MTEC) along with U-sarat Bunnag, the Senior Division Director of the Thailand Science Park (TSP), both of which are under the National Science and Technology Development Agency NSTDA. These two people were able to relate some of the most interesting aspects of research & development happening on the scientific frontier of Thailand.

Thailand’s Science Park is a huge complex that includes more than  sixty companiesfour research institutesthree universities, one medical school and two nearby universities. The facility supports 2500 full-time researchers, of which around 1000 are Ph.D. scientists. This facility is really ground-zero for Thailand’s R&D efforts. When you hear the deal they offer, it quickly becomes apparent why.

If you join the TSP, you enjoy the following incredible benefits from the Thailand Board of Investment:
• Import tax exemption for machinery
• Corporate income tax exemption for 8 Years
• 50% Corp. income tax reduction for 5 more years after tax exemption period ends (a total of 13 years of tax breaks)
• Work permit and visa facilitation for foreign specialists and researchers

The Thailand Revenue Department further sweetens the deal by offering:
• Accelerated depreciation rate for R&D machinery and equipment
• 200% tax deduction for R&D expense

The 320,000 sqft facility is modern, well-outfitted and includes:
• Wet Laboratories
• Dry Laboratories
• Pilot Plant
• Retailing Area for projects
• Land for special-build premises
• Seminar rooms
• Auditorium with 380 seats
• Outdoor meeting spaces
• Food courts, restaurants and retail shopping

One of the aspects I really enjoyed was an R&D Gallery which showed off successfully commercialized projects. One of the examples was how sludge from water treatment is now pelletized and turned into filler aggregate for construction concrete which reduces costs and eliminates a significant waste product.

In fact as you walk into the facility you are greeted with a touchscreen presentation that not only gives the visitor a view of what is there, but actually promotes the local network, knowledge and capital resources available.

I was also interested in a project that Dr. Dechaumphai had spearheaded for the Small Medium Enterprise (SME) market. His group identified a transportation need for small trucks in rural Thailand. Beyond this need, they focused on being able to make the truck with local resources and to run on local fuel. The result is a small biodiesel truck that works for passengers or freight. It features:
• being able to run on locally-produced palm oil biodiesel
• chassis, steering, braking, suspension and powertrain all made in Thailand
• only the engine is imported due to significant missing infrastructure

They then created 10 vehicles and sent them to villages around Thailand to study how they are used, and what improvements will be needed. Not only does this have merit in meeting needs, but developing the precursor to a domestic car industry.

Certainly the Computer Hard Drive industry in Thailand dominates the global scene. In fact, a recent flood in Thailand affected worldwide computer supply. What was shocking was that when I asked how the rest of R&D was going in Thailand, I was given a mediocre response. Despite all of this financial support and intra-agency efforts, they are not yet happy with the state of R&D in Thailand and think it has a long way to go. But if I look at the incentives and structure of their offering, I don’t think this situation will last very long.

In fact U-sarat’s marketing background is a great asset for the TSP, not only to fill it with great tenants and talent, but then to assist colleagues in rolling our multiple versions of the TSP all over Thailand. That’s when I realized, this was not a cool concept, but a massive federal commitment.

Lessons from the visit:
1. It has become increasingly apparent that R&D has been identified as a key sector for many developing economies.
2. R&D is part of the global marketplace, and world-class facilities with tantalizing incentives are becoming the ante to play.
3. However facilities and incentives are not enough. As we’ve learned at home, the key to success is developing a vibrant community, and this gets into thinking about the bigger ecosystem of complementary factors surrounding R&D, and why workers prefer to work at one place versus another. Frequently this gets into cultural influences like the arts, independent business and inclusivity.
4. Too often, our R&D efforts in the USA are so locked up in proprietary secrecy, that we fail to share our achievements with the greater community. NSP’s exhibits and information sharing was an inspiration on connecting R&D to the community.
5. I was inspired by MTEC’s desire to connect community needs to community resources with a special focus on SME development. This was a dominant theme expressed in Thailand, and consistently neglected in the USA.
6. And from U-sarat: try the mango with sticky rice!

Special thanks to Dr. Chadamas Thuvasethakul, Executive Vice President of NSTDA, for arranging this visit – and for ultimately helping me take U-sarat’s advice!

Innovation Beyond Borders

The last thing I expected in Singapore was to debate the American presidential election. Yet Philip Yeo pressed me for my views. His table was filled with laminated articles and print outs abut what is happening across the world. With his secretary repeatedly running in print-outs for our building discussion and a humming ipad sending me references in real time, I realized that Phillip is a dedicated student of the world and an innovation tour de force.
A program of the Ministry of Trade and Industry, SPRING is an acronym for it’s Standards, Productivity and Innovation for Growth. With this program Phillip has become a powerful mover for Singapore’s entrepreneurial community and given it a global context. Part of his efforts have been to take Singapore’s innovation efforts beyond its borders. Philip explained that with a local workforce of 419,000 people, the local manufacturing economy currently generated SGD273 bn (US$220 bn) in 2011, but by expanding their base internationally, Singapore can have a much bigger impact.

Singapore’s companies leads many overseas efforts, but one of the most compelling is their acquisition of property abroad to set up manufacturing parks to help create jobs for the host countries. Naturally their projects are distributed throughout the ASEAN region, (Vietnam and Indonesia), China and India. But their reach is much broader as well, with projects all over the world, including a massive airplane maintenance facility in the USA.On the floor of one of his conference rooms is a stack of topographic photos and development plans. He showed me that in some cases, he’s even filling land in to achieve enough land for these projects. Given their massive scale, they become mixed-use facilities as well, bringing housing, banks, restaurants, and shopping all integrated together.

I asked about the mechanics of running something of this scale. Typically the ventures are floated on the Singapore Exchange (SGX) to raise the starting capital. The local players get involved and normally take a majority ownership share with Singapore’s companies retaining a minority share. Then key tenants are recruited if not already targeted. In terms of operations, Singapore’s companies populates the majority of the decision making team. He says that normally the vast majority of the labor force is from the host country.

In many places they go, others were not able to invest. Corruption was many times the biggest barrier. As a condition of Singapore’s companies involvement, he insists that their projects be free and clear of these issues. I know there was much more to this then he led on. Of course I had to ask Phillip when he was going to do a project in North Carolina. He quickly responded, “Actually the USA is a good place to start manufacturing right now but we won’t invest there because when we do, the lawyers will come.” Without capped settlements for worker safety claims, Phillip says the risk is just too high.

Given the prowess Phillip demonstrated on our discussion of American politics, I realized I was not prepared to argue the point. However I was inspired to see how big ideas can transform a small country. Efforts like SPRING and Design Singapore show how the perceived weakness of the nation’s small size has been turned around into the strengths of being nimble and focused, thereby enabling Singapore to become a global design and innovation leader. Lots to learn here!


Tracking Innovation and Entrepreneurship


As an attendee of the Innovation and Entrepreneurship Conference in dazzling Singapore, I was fortunate to hear many academic papers on the many factors surrounding these two very big words. Papers were presented from all over the world: from Fiji to Iran to the UK. Topics ranged from Structural Equation Modeling (SEM) to reasons for collaboration. One German researcher sat next to me and asked what I was presenting. I said “nothing.” He responded “Oh I see! You are here to criticize! Yes that’s easy.” Point taken. I’ll present next time.

In particular I was drawn to a few presentations, and here are my *personal* take-aways:

1. The keynote presentation given by Dr. Farid Shirazi, PhD of the Ted Rogers School of Information Technology Management at Ryerson University in Toronto. He made a compelling presentation that despite common belief, the Information Technology Economy is creating a bigger environmental strain, not a smaller one.

2. The One Village One Product (OVOP) Approach was studied by Dr. Dana Santoso Saroso from the University of Mercu Buana, Indonesia. His case involved studying how a whole village could sell different value-added products from focusing on growing strawberrie. The increased profitability was impressive. He pointed to the way a village could rally behind the vision given by village mayors to instigate real change in SME development. Absent of the mayor’s dedication, change did not happen.

3. Dr. Nerisa Paladan of Ateneo de Naga University, Philippines presented “Leadership and Entrepreneurial Success of Bicolano Entrepreneurs.” By studying the most successful businesses, she demonstrated that successful leaders who were involved in community organizing and volunteering were able to develop the “transformational leadership style” which became a critical factor for SME success.

4. Prof. Jan van Den Ende of Erasmus University, Netherlands presented “To Ask, to Collaborate or to Propose? Contrasting Views on Customer Involvement in Functional and Experiential Innovation.” His team studied almost 700 design firms and how they interacted with the consumer market. He showed the different paths to commercial success of a new product. He focused on three specific approaches: being passively customer-driven (surveys), actively customer-driven (live interaction) or proactively customer-driven. In the latter he described this process as focusing on th latent needs of the customer, not their stated needs. He drove this home with the widely-attributed quote of Henry Ford: “If I had asked people what they wanted, they would have said a faster horse.” Specifically he attributed this proactive approach as a design-driven approach. From there he studied when each one has its best success rate. Ultimately it appears the customer-driven aproach was well-suited to funcational improvements, an the design-driven approach was better suited to more radical innovation than function.

5. The most charismatic award went to Prof. Alamuri Suryanarayana of Osmania University in India who passionately presented on “The Power of Collaboration in Innovation Management.” He talked about the next wave of globalization 4.0 is to no longer think about outsourcing white collar jobs, but to collaborate with an international talent base. His most salient and compelling argument for collaboration was that it was the fastest path for innovation and that “leaders who do not innovate quickly lose their innovative people.”

Of course my comments should be taken in context of the actual published work. I was able to follow up with a few of these folks already and hope to build on this eye-opening experience of applying measurable rigor to the loosey-goosey terms of innovation and entrepreneurship.

By this photo it looks like I take this topic pretty seriously!