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!

Welcome to Thailand

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With fantastic experiences already accumulated in Indonesia and Singapore, going to Thailand was like having a third dessert. And maybe a 7-layer cake at that. Beth and I were given a 5 star reception, with an attendant ready for us as we exited the plane, and the kind and diligent Sopida Weraklultawan waiting for us in the hotel with a full packet of printouts, maps, detailed schedule and even a SIM card for my travel phone.

All of this was the result of the concerted efforts of the Thai Eisenhower Fellows. In particular Supinya Klangnarong, Dr. Chadamas Thuvasethakul, and Dr. Somkiat Tangkitvanich dedicated time and effort to introduce us to a diverse yet highly targeted group of thinkers and Ieaders.

And then there’s the food. Lovers of Americanized versions of Thai cooking, Beth and I were in absolute heaven. Food was everywhere, frying on the street, cooking in the mega malls and in wonderful restaurants. Only in Italy have I felt food to be so integral to culture… and so good!

Although details of my visits will follow on this blog, I’m happy to report that overall this pioneering effort by the Thai EF group created a stunning program and I think future fellows will really benefit by coming to this proactive and talented country.

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Healthcare to Live For!

Sometimes its the unexpected events that reveal the most about a system.

Beth has been a stellar traveling partner, especially considering the hectic schedule and many early morning flights. Unfortunately this caught up with her in Singapore. Since Eisenhower Fellowships provided us with travel insurance, we were able to get some quick instructions.

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We left our hotel at 9:20 am and took a 10 minute ride to Raffles Hospital. We went through the marble lobby and upstairs to the glassed-in executive services room which had 20 or so people waiting comfortably in chairs. One of the attendants knew us by name and was expecting us.

A few minutes later, Beth was seen by a doctor. She emerged shortly thereafter and was escorted by the doctor to the pharmaceutical desk and had her prescription fulfilled. Total cash charges for the diagnosis of the sinus infection and 3 sets of meds was SG$125 (US$100). We jumped back in the cab and were back in our room by 10:20 am!

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I can’t imagine how many well-designed systems were put in place to make this happen – from great transportation, to scheduling doctors properly, to stocking pharmaceuticals and training incredibly friendly and efficient staff. The whole process was actually PLEASANT. It was stunning and something for which the rest of us should all aspire.

Best of all, Beth recovered quickly and was able to enjoy our following trip to Thailand!

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!

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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!

 

 

Design Singapore

The Eisenhower Network has proven itself again and again. Earlier this year I met 2012 EIsenhower Fellow Mean Luck Kwek, an incredibly smart and gracious leader in Singapore. He is currently the Deputy Secretary of the Ministry of Trade and Industry. When he heard I was coming he promptly put me in touch with a host of interesting Singaporeans, including Jeffrey Ho Kiat, Executive Director of Design Singapore.

Jeffrey was energetic, forthcoming and gave Beth and I a great introduction to Singapore’s efforts supporting design:
1. Design Capability Development: Developing capability for a globally competitive design cluster
2. Design for Competitiveness: Enabling enterprises to leverage good design for economic growth, quality of life, and the environment
3. Design Innovation: Driving innovation and design IP creation to stay ahead of the curve
4. National Design Centre: Offering a one-stop integrated design hub for designers and businesses.

He also made me realize that the grass is always greener in design. While he mentioned Singapore being a bit behind other countries on certain design initiatives, I couldn’t help but admire the singular power of focus that his office at Design Singapore held and what they could achieve so quickly once empowered.

Jeffrey mentioned that design in Singapore represents a SGD 3.6 billion (US$2.9 bn) industry and that their goal is to grow it to 6+ bn (US$4.8 bn) in the next few years. Here is why this blew me away:
1. The government of Singapore actually tracks the economic impact of design (see detailed comment below).
2. Jeffrey says its “very easy” to get these numbers and track progress.
3. Design Singapore is a governmental institution charged with encouraging local creative talent to prosper.
4. Design Singapore is under MICA, the Ministry of Information, Communications and the Arts.
5. Fine Art is under a completely different ministry.

Here are some of the initiatives Design Singapore has underway:
1. $70k grant to help fund local design consultancies through the Design for Business Innovation Grant.
2. They help match clients to design firms, and sometimes share costs.
3. Up to 400% tax rebate for those that hire design consultants from the Productivity & Innovation Credit for Design. That’s not a typo. If you invest $1 in local design you are eligible for $4 off of your taxes.
4. Singaporean designers are promoted through an Overseas Promotion Partnership Programme.
5. They also offer scholarships relating to design.
6. Recognizing Singaporean design excellence through the President’s Design Award.

The most interesting goal to me was Jeffrey’s vision to convert their OEM factories (Original Equipment Manufacturers for other brands) into ODM factories (Original Design Manufacturer for their own brands). This is certainly not the easiest way to go. There is a lot more consistent work out there for contract factories than for dedicated brands, but Design Singapore sees this as a strategic opportunity to grow the importance of design in Singapaore. In fact this is part of an overall mission to create OSM (Original Strategic Manufacturers that can usher in the future wave of Singapore’s business.

With the door open to talking about new design and manufacturing initiatives, I shared with Jeffrey our new on-demand manufacturing effort called LYF Shoes. He immediately understood the concept, how it would affect manufacturing, and was quitre supportive. He then passed on some great people to talk with about our intentions. Then he turned to me and asked “how do you learn to think like you?” That’s a surprisingly difficult question to answer! But it made me realize that during this fellowship that in good conversations, there is a constant exchange where both parties can learn from each other.

Overall I was really impressed that Singapore has in place a design vision with real teeth and a strategic thinker at the helm. I look forward to see their success unfold.

 

On Indonesian & Singaporean TV

MNC Business is a news channel broadcast in Indonesia and Singapore, similar to the USA’a MSNBC. As a result of Eka Soerbakti’s prodding, I was invited to speak with host Elmo Hakim for a one hour segment on innovation and the creative economy. Although the questions emailed ahead of time were a bit dry, I appreciated Elmo’s ability to roll with the discussion and take it into some interesting areas. I was given some time to talk about our emerging theory on Inventive Culture. I was then allowed to reframe Innovation as something that requires a benefit to all strata of society, not just certain players. Finally I was able to give some exposure to those who had helped and inspired me along the trip, including Eka, Laretna Adishakti of Center for Heritage Conservation, Svida Alisjahbana at Femina Group and Singgih Kartono of Magno Radio. Once the interview ended, Elmo turned to me with a big smile and said, “this was interesting and so much more fun than reading the numbers!…which I have to do next.”

As an added bonus I was asked to demonstrate our Teastick on air!

I should be able to post the show once we navigate the legal mumbo jumbo…

Fusing Heritage with Modern Design

La Spina Collections exemplifies many of the things I am encouraged about in Indonesia – all coming together into a line of shoes.

Here’s my reasoning:
1. The shoes are beautiful and inventive.
2. The collection embraces Indonesian heritage.
3. The products uses batik fabrics from villages to promote and help its artisans (mostly in Java).
4. The shoes also use wood carving as we saw in Bali.
5. The business is a pure start-up, starting from a group of three highly skilled shoemakers.
6. La Spina received entrepreneurial coaching and international exposure by the Femina Group.
7. The collection is now growing rapidly with exposure at Tokyo Fashion Week and previews in Europe.
8. Established local companies who embrace the heritage batiks are now contracting La Spina for some special collections.

All of this is the product of the efforts by design entrepreneur, Lianna Gunawan. Lianna was gracious enough to give me a full tour of her operations – from back office and retail store in Jakarta to her factory in Bandung. Her operations are growing and her staff will need to expand to keep up. It was refreshing to see in Bandung how shoemaking really starts and the craft involved to make beautiful shoes. It will be an interesting challenge to see how Lianna can keep up with growing demand and maintain her vision to use heritage fabrics and techniques and fuse them with her flair for contemporary style. If anyone is up for it, it’s Lianna, and I think we’ll be seeing a lot more of her as an icon of new Indonesian fashion design.

Growth by Respect

Eka Lorena Soerbakti is a powerhouse. The 2012 Eisenhower Fellow from Indonesia, Eka was the deciding factor on why I came to Indonesia. We had met in Philadelphia for our EF orientation sessions and we hit it off immediately. I think we were two of the louder laughs at the improv comedy theater where Andrew Stober was performing.

When I asked Eka about her home country, she came at me with full force enthusiasm and terrific contacts on what is happening with creative culture there. With a laser focus on results and touching generosity, she was indispensable part of the entire trip. It’s hard to believe that someone who afforded me so much time and energy is a key mover for the transportation industry in Indonesia.

 

Eka remembers when her father, G. T. Soerbakti, started Lorena Group in 1970. After leaving the military, her father purchased two buses to start a transportation service from Bogor to Jakarta. “We didn’t even have the land for the buses, so we rented the front yards of people in town so we could park them.”

It’s a little different operation now: Lorena executive class buses, Karina coach class busses, ESL logistics, cargo and courier services, with projects extending into air and water transport. Now their integrated transportation service moves millions of people. The buses are all Mercedes vehicles and are equipped with GPS and a dedicated driver training program. As a result this company is held in high regards and G. T. Soerbakti was given a “life time achievement award”  by Ernst and Young in 2003. Having grown up working with their father, the next generation of Soerbaktis are taking leadership roles with Lorena. But with careful maintenance Mr Soerbakti has maintained the very first bus – and pointed it out to us in the depot in Bogor.

Lately Eka is also getting involved with larger transportation issues. Organda is an organization of land transportation owners that is pushing the government for transportation reform. The traffic throughout Indonesia appears to be in need of better planning, and Jakarta’s traffic jams are almost comical. On one memorable night it took us 1 hour to move less than half a mile. Eka is leading the charge in trying to get things unjammed, but it is a massive job. Eka is also leading Organda with many charitable activities. This sensitivity to people around her clearly came from her family.

With the unpredictability of Jakarta traffic on the beginning of Ramadan, we left an hour earlier than advised, just to make sure we weren’t late to another appointment. That morning Ramadan was declared to be one day later, so traffic proceeded and we ended up significantly early. Mr Soerbakti saw us in the waiting room and immediately invited into his office to fill us with cakes and coffee. To our surprise, he was already meeting with a vendor. The room was full and we were graciously introduced to all parties and even had a lengthy chat about our Eisenhower Fellowship experience. Although we tried to excuse ourself from the ongoing meeting, Mr Soerbakti insisted that we stay as negotiations rejoined. Honestly I was shocked. Subsequently I realized that this was a deliberate management style of openness. I was never asked to keep anything confidential from this meeting. He didn’t have to, and I learned a lot about kindness and respect.

We took a tour of the Lorena group’s depot, and this is where the story began to unfold: apparently some people liked to board the bus before it got to the first station, so rather than deny them, Mr Soerbakti made a nice station for them, complete with TV, shower, prayer room and even clean sleeping quarters. All the oil disposal is cared for, the engines are maintained with top notch equipment, and between the parking areas are fruit and vegetable trees. Mr. Soerbakti cares for the trees himself. “He’s a very detailed man,” one of his staff explained.

Eka introduced me to the key personnel in each department – all people she had known for more than 20 years. But the real touching moment was when we toured the bus driver waiting area. The drivers saw him coming and with eagerness and earnestness all lined up to shake his hand. It was a compelling and silent moment that spoke volumes to me. I realized the kindness and respect he showed to me was something he regularly did with his customers and employees, and it appears that it remains Lorena’s biggest key to success.

 

 

 

Design for Community Advancement

Within 10 minutes of having arrived at Singgih Kartono’s studio in Desa Kandangan, I turned to Beth and said “This alone was worth the whole trip.” She responded, “this feels like you.”

Designers create their works for different agendas: to win awards, to innovate, to make money, etc. But Singgih designs to empower his village in Temanggung and thereby sustainably advance Indonesia. His plan is really that big, and he plans on doing it with some simple and small items, starting with the Wooden Radio. These products are sold in fine design establishments around the world.

Singgih originally conceived the idea while in design school in Bandung. After some refinement and mentorship for the acclaimed concept he decided to not only bring his design to market, but to create the factory that would make it in his hometown. So starting from very meager beginnings (he rented a desk in a neighbor’s apartment), he began the enterprise with stunning focus.

Now when you come into his compound you are greeted with two well designed modern structures – his house and his factory. His factory is a split level structure filled with open space and glass walls to the outside. “People spend a lot of time in here, and I wanted it to feel like home to them.”

Likewise his house doubles as an office and his living room a conference room with moving glass walls that brings the outside in. When fully opened up he can have large gatherings there – whether for design workshops or celebrations.

The wooden radio is of course not 100% wooden. It uses electronics from abroad to make the sound. These are simply assembled into the beautiful wooden cases. Singgih explains that he always prefers the back of his designs than the front. A tour of his delightfully lit and airy split-level factory gives the air of people doing projects rather than a factory. It felt like a factory i wanted to work in.

The heart of Singgih’s method is “New Craft,” a system that mentor Surya Pernawa encouraged him to develop. But this name is misleading. The goal is to transform design from a tool for commerce into a means for empowering a village. New Craft combines the benefits of skilled workmanship of traditional craft industries in rural villages with the modern perspective that results from a design and manufacturing process. Social responsibility and sustainability can then become key differentiators.

Outside of Singgih’s multipurpose room is a hydroponic system growing vegetables which circulates through a fish pond. But this is just a clue to his efforts. Behind the workshop he has a courtyard filled with composts and saplings. He explained “we pay employees but we never think to pay nature.” He went on to explain that Magno could make products because someone planted trees years ago. “So we have to pay nature back too.” His website adds “The amount of wood replanted and selected is based on our yearly wood consumption, suitable age for wood to be grown and cut, and the requirement of land per tree.”
This plan for sustainable design goes much further. In addition to planting to replace the trees he uses, he also has an organic farm in the works that further synergizes fish, fruit trees and vegetables. He was not planning to do this but when the new tract of land was being opened up to housing he decided to buy it to preserve it and do something more sustainable. This farm now produces income that provides jobs and sustains expansion. Ultimately he hopes to re-inspire a new generation of agricultural workers in his village who have been fleeing farming for years. Now Singgih is turning his attention to moving his factory closer to the new farm. That would allow his existing factory to become a community center.
What results from all of this is perhaps the best living example of “think global, act local.”  He has drawn a circle around his community and used design as a path to address the needs of that community. The many layers of happiness and beauty that has resulted is unmistakable. But Singgih’s work is not done. Exciting new products are forthcoming, and he is also thinking a lot about education.
As if on cue, neighborhood children came to say hi while we took our parting photo with he and his wife.