At the edge of innovation

COVER STORY AT THE EDGE OF INNOVATION

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AT THE EDGE OF INNOVATION SCIENCE AND TECHNOLOGY PARKS: CONNECTING PUBLIC SECTOR, PRIVATE ENTERPRISE, EDUCATIONAL AND RESEARCH INSTITUTIONS

BY AYSWARYA MURTHY

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COVER STORY AT THE EDGE OF INNOVATION

Q "THE CULTURE AND COMMUNITY WE HAVE DEFINED AT THE PARK AMONG STAFF, TENANTS AND QATAR’S WIDER ENTREPRENEURIAL ECOSYSTEM IS EXCELLENT." HAMAD AL KUWARI

Managing Director Qatar Science and Technology Park

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atar Science and Technology Park (QSTP) may seem abandoned to the uninitiated, but the air is unmistakably thick with electricity. Even if you don’t realise that it is at the very core of the country’s push forward into a knowledge economy. Even if you don’t know that five years since it began operations, the tech park now hosts 40 local and global companies carrying out disruptive research in the fields of energy, health, sustainability and information and communication technology (ICT). Even if you are not aware that after 30 odd years, QSTP was instrumental in making the world sit up and notice the new age of innovation that is silently taking root in the Arab world. The aura is unmistakable; it’s that of change and new horizons.

At the recently concluded International Association of Science Parks (IASP) conference in Doha, which attracted more than 500 delegates from 50 countries, Qatar Today got an opportunity to chat with science and technology parks (STPs) from nearly every continent of the globe to figure out

how they were effecting change in the their little corners of the world. Irrespective of whether they were government supported or non-profit, confined to a campus or spread out over a city, promoted local small and medium enterprises (SMEs) or coveted foreign multinational companies (MNCs), were engaged in reviving their economy or kick-starting a new one, the underlying agenda was common – to drive innovation by effectively connecting the public sector, private enterprises, universities and research institutes.

In an earlier interview, Managing Director of QSTP and Head of the IASP 2014 Doha Organising Committee, Hamad Al Kuwari, had said that hubs like QSTP and its counterparts around the world play a critical role in sparking meaningful collaboration across sectors, ensuring that historic investments in education and research pay off in the form of skills, intellectual property and viable technology businesses. QSTP itself is still in expansion mode, Al Kuwari says, outlining the hub’s future plans. “We are at 95% occupancy and on track, having officially started design work on the next phase. The plan is to have two more buildings within the park and free zone – a technology building similar to Tech 1 and Tech 2, which incorporates feedback from

BOTSWANA our members, enhancing functionality and further supporting their work; and Tech 4, which is going to be more of a workshop where tenants who require heavy-operation testing will be housed,” he said.

Speaking about the draw of QSTP, he said, “Companies are attracted to QSTP’s model, notably because we offer world-class infrastructure that supports complex technology research projects. Additionally, we offer freedom operating as a free zone, meaning we can license companies that are 100% foreign-owned, with no taxation on their income or on imported goods used for technology development.” But he says he is equally proud of the non-tangible benefits of being a part of QSTP. “The culture and community we have defined at the park among staff, tenants and Qatar’s wider entrepreneurial ecosystem is excellent. We regularly bring local and global industry figures in the health sciences, energy and ICT sectors to QSTP for our TECHtalks series, which has grown into a sought-after knowledge forum. Increasingly these are the types of programmes and services that add value for tenants and entrepreneurs while increasing the attractiveness of the cluster itself.” This, he says, is the trend that is emerging and what his counterparts around the world – from Brazil to Muscat – are implementing

TAKING BOTSWANA TO THE WORLD

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hough it might not seem obvious at first glance, Botswana and Qatar have much in common. Their wealth is primarily buried underground – LNG here and coal and diamonds over there. And in both the countries, the governments are keen on channeling income from these non-renewable resources into diversifying their economies and finding local solutions to address their national challenges. Speaking with Tshepo Tsheko, Program Manager at the Botswana Innovation Hub (BIH), it is crystal clear that their push is in finding a lasting place for Botswana’s companies and people in the global value chain. BIH is new to the scene too; they are in their second year of operations and are the newest member of IASP. The flagship technology entrepreneurship development programme that Tsheko heads, which is essentially an incubator/accelerator, is the biggest one yet for BIH. “In commercialising innovation, one of the strongest components is entrepreneurship and at BIH we bring mature companies and startups together to collaborate,” he says. The government-funded STP actively seeks players in four critical sectors – ICT, biotech (focusing on medical research and food security), clean tech and mining. “Considering the relevance of these four sectors to the African agenda, our vision is to apply and leverage what’s already there and localise it to solve African challenges,” he says, supporting it with an example. “One of our startups is a company that had designed the world’s first solar-powered hearing aid. Over 200 million Africans suffer from hearing impairment. People were donating hearing aids but the batteries were expensive or difficult to charge because electricity was often unreliable. They took an African problem and solved it and now those hearing aids are being used in places as far flung as China and Brazil,” he says. So their challenges, though local, have the potential to be scaled up and applied to other middle- and low-income economies in the world.

That is why although Tsheko considers Botswana, with its extensive investments in infrastructure and one of the most stable political climates in the continent, as a “no-brainer” when it comes to attracting MNCs looking for a foothold in Africa, it doesn’t end there. “So if an QATAR TODAY > NOVEMBER 2014 > 45

COVER STORY AT THE EDGE OF INNOVATION

“DID YOU KNOW THAT TECH STARTUPS AROUND THE WORLD USE AFRICAN PROBLEMS TO INNOVATE? AND OUR MOST POWERFUL VALUE PROPOSITION IS A DEEP UNDERSTANDING OF THE AFRICAN CHALLENGES AND ACCESS TO THE BEST TOOLS TO SOLVE THEM.” TSHEPO TSHEKO

Program Manager Botswana Innovation Hub

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MNC is only looking at Botswana as a potential market, that’s not what we are doing anymore. We are challenging overselves to look at the rest of the world and our goals at the STP reflect that.”

Their focus on local companies is understandable. “SMEs run economies because they can take the risks where the big players are stagnant,” Tsheko says. “Historically we have had the limitation of being a small country and that has left a lot of companies that could have gotten big at the SME stage. At the hub we are saying, there is no ceiling. We want to take these SMEs and make them bigger.” And these are knowledge-intensive businesses that can be valuable players in the global value chain. “But we do need big guys; we look at what they are doing that the smaller companies can offload and develop. By beginning to deliver finishing touches or ancillary products and services, local companies will start to cut deeper and deeper into the value chain.

It not only builds trust and credibility but also allows us to showcase African innovation and knowledge systems. It’s not about bringing the world into Botswana but owning our success and taking Botswana to the world,” he declares. Currently, out of the 50 members in the hub and, around 20 are born-in-Botswana companies.

Also at BIH are facilities like a solar testing lab being set up in association with Lund University in Sweden for the benefit of companies involved in clean tech innovation. Be it post-mining diamond operations, or HIV research, the vision is to have more and more of the knowledge-

intensive and value-added work done in Botswana. “We have doctoral candidates in universities working on AIDS research but because their funding comes from outside, they don’t have a free hand and are often reduced to just collecting and sending the data. This has to stop,” he says. BIH now has a state-of-the-art wet lab for biotech research.

To be relevant as an STP, Tsheko says they have to address gaps in the skills of the local population. “In Bostwana, there is a lot of work but not many jobs,” he says wryly.

“Right now we graduate thousands of ICT students every year but I’d be the first to admit that many of them are not employable,” he says. But they are starting to engage the universities in how things are getting done.

“We are challenging training people on skills and career paths that are dead ends given the local climate and guiding them to manage output by developing relevant skills. Because at the end of the day, the real diamonds are our people,” he says.

Tsheko is emphatic about one thing: “As much as the rest of the world can solve our problems for us, we need to be a part of that.

We need to invest in people and they need to be part of the vision. We can’t move forward and leave them behind. And we know it takes time and, unfortunately, no matter how much money you throw into these projects, you need to go through development stages. That’s what we have learnt from people who have done it before. It could take ten years or more for anything significant to come out of an STP. We are prepared for that.”

BRAZIL

A LIVING LAB

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orto Digital is deeply invested in Brazil’s IT and creative economy. One of the biggest tech parks in the country, supports many sectors within the economy, thanks to the scale of IT services that is being exported out of the park. Situated just off the coast of Recife in northern Brazil, the STP has a whole island to itself, where it routinely rolls out and tests projects under development in its companies. For everyone who works there, it’s like living in an “uber” lab.

Guilherme Calheiros, Director of Innovation and Business Competitiveness, and his colleague and Project Manager Cidinha Gouveia explain that Recife was a natural choice for a digital STP and it all happened quite organically. “The city has very good academic institutions and houses one of the most important public universities reputed for its IT courses, in particular. And though some of the most brilliant IT engineers were being nurtured there, the students would head to the more developed south after graduation in search of better jobs.

We wanted to keep those people in the region and that’s how Porto Digital was born,” Gouveia explains.

Recife Center for Advanced Studies and

Systems, known by its Portuguese acronym, CESAR, their first company and the core of their R&D strength, was born out of supporting projects of university students after they graduated. In 2001 Porto Digital was born and the many companies that were starting to spin off from CESAR came under its umbrella. Government funding and tax benefits soon started attracting other tech companies, both from within and outside Brazil. While most of these companies deal in software services, CESAR continues

“TECHNOLOGY IS CONSTANTLY EVOLVING AND UNIVERSITIES OFTEN DON’T FOLLOW THE SAME RHYTHM. WE AT PORTO DIGITAL FILL THIS GAP WITH FREE COURSES ON SUBJECTS HIGH ON MARKET DEMAND FOR OUR EMPLOYEES AND STUDENTS FROM OUR PARTNER UNIVERSITIES.” CIDINHA GOUVEIA (right)

Project Manager Porto Digital and

GUILHERME CALHEIROS

Director of Innovation and Business Competitiveness Porto Digital

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COVER STORY AT THE EDGE OF INNOVATION to remain a powerhouse of innovation and is often contracted by companies to develop projects from them. “Recently CESAR was contracted to develop drones that can monitor electric lines and transmit data of disruptions and maintenance needs.”

Gouveia says. “The contractor is now looking to manufacture those drones on a large scale.” If the contract stipulates so, CESAR will hold partial ownership of the intellectual property (IP) and choose to further improve on that technology, churning out more companies. “More than 30 companies have come into existence this way,” Calheiros says.

Porto Digital’s job is to support the companies to become more competitive and break into markets in Brazil and abroad.

And this is a tough job. Because, though the Brazilian market for IT is very big, almost 70% of it is being served by international companies and local companies find it hard to compete with them, says Calheiros.

Many of those tech MNCs like Accenture, IBM and, Microsoft have a presence in Porto Digital and, though they make up only a third of the companies there, they employ a large chunk of the people working on the island. “They share space with growing Brazilian tech firms like Stefanini and Serttel,” he says. Serttel is one of the STP's better known success stories. The mobility solutions provider began operations in Porto

Digital and now earns an annual revenue to the tune of $100 million (QR365 million).

“Their first product was a public shared bike system,” Gouveia remembers. “They first rolled out ten stations within the island to test the product and iron out the glitches. As a tech park, we love to contract these technologies as it improves the environment of the STP and benefits other employees of the 250 companies working there.”

With a solid product in hand, Serttel sold the technology first to the city of Recife, setting up 70 bike stations, and soon expanded deeper into the country, in cities like Sao Paulo and Rio de Janeiro .

It was the first-of-its-kind solution in the country and the residents of Porto Digital got a taste of it before anyone else. And this is not an isolated case either; rather it’s the norm. Right now a car sharing system, a parking space locator and public transport information software are all being tested on the island. The employees are constantly exposed to new innovations being developed by their neighbours, before they are fixed and implemented in the outside world, and this has an energising effect on the whole community.

While these stories are evidence of what a valuable jumping board Porto Digital can be, the trials don’t stop here. “The first problem in trying to take our companies international is the language,” Calheiros

says. “It’s not like in India where everyone speaks English. Our engineers have to learn it and then translate their solutions to that language. This involves a lot of training (which Porto Digital provides). The other problem is funds. Brazil, and especially our region, doesn’t have strong funding mechanisms. We give funds during the early stages but our companies face problems when they need more to scale up.”

But Porto Digital’s IT incubator is always fully occupied and its other one - focusing on creative technology – is starting to find big name partnerships.

In its efforts to stimulate a creative economy in the region, the STP is supporting artists and engineers who are into design, gaming, filmmaking, etc. Gaming is one of the key fields with a lot of traction; there are companies working alongside Microsoft on Xbox games. “We created Proto Media where we invested in a state-of-theart studio that’ll help filmmakers create high-quality movies. This kind of equipment is available at only one other place in Brazil, within the confines of the country’s largest TV network. But now, for a nominal price, anyone can use the facilities to create pieces with international quality audio and video,” Gouveia says. “It’s been very popular with students and amateur filmmakers and 27 films and documentaries were made here in one year alone.”

THE NETHERLANDS

WHICH CAME FIRST:

THE ECOSYSTEM OR THE STP?

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ou’d think a country like Holland didn’t have any pressing national challenges that needed to be tackled. But Floris de Gelder, Managing Director of the Utrecht Science Park in the Netherlands, puts us straight. “We do have several looming challenges to address.

Other countries seem to think it should be the rising sea levels, but we have 800 years of experience in water management in a country below sea level,” he laughs. “It’s important, of course, and it's expensive and we have a lot of wonderful knowledge which we use in our own country to showcase.

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Another important challenge is the aging population. The mix is changing very fast and maintaining the price of healthcare is becoming a priority. We need to take steps now to make sure that when we have more of the elderly and less of the working population, we can still keep healthcare standards high,” he says.

At Utrecht STP, incidentally, life sciences and sustainability are two prominent areas of focus. Like many instances in the Netherlands of sector-specific STPs evolving in certain areas, de Gelder assures us this is not by design but is something that just transpired organically. “No STP is

directly owned by the government so there is really no overarching mandate dictating the sectors and areas that we should focus on,” he says. For a sophisticated society like Holland’s, it’s neither necessary nor good for the government to be on the front line of the STP business, de Gelder says. “We can act much faster and be more dynamic the farther we are from government oversight. What we have, and prefer, is a small government working at the highest level of abstraction and people on the ground working with the businesses.” By and large, all STPs in the Netherlands are centred on universities and the ecosystems that evolve around them are understandably linked to the university’s specialisation. “In the case of Eindhoven, the STP was influenced by the environment Phillips had created over the decades and also the Eindhoven University of Technology,” he says. Similarly, Delft University of Technology, with its expertise in typical Dutch ingenuity in water management and civil engineering, led to the spawning of similar companies around it, and the Wageningen University spawned Food Valley which is regarded as one of the largest food, nutrition and food security clusters in the world. “The stronger and better focused your ecosystem is, the more business it attracts,” he says.

De Gelder believes that their capability around life sciences probably started with a small group of professors and scientists with the right kind of entrepreneurial spirit. “They were a small part of a large

“OUR AGENDA NOW IS TO TELL A GOOD DUTCH STORY. THE NETHERLANDS IS PRACTICALLY ONE LARGE CITY – WE ARE 17 MILLION PEOPLE, HOME TO FIVE OF THE WORLD’S 100 BEST UNIVERSITIES, HAVE ONE VERY BIG AIRPORT AND ONE HARBOUR. WITH INCREASINGLY BIG CITIES BECOMING SUCCESSFUL PLACES OF INNOVATION, WE CAN TELL OUR STORY BETTER IF ALL THE STPS IN THE COUNTRY SAID IT TOGETHER.” FLORIS DE GELDER

university but they had great relationships with the business community. Soon the businesses around life sciences picked up the fastest, attracting more companies,” he says. This way the companies and ecosystem were feeding into each other and it is difficult to say which came first, only that they can now offer one of the best and stimulating environments for research in that area. Also, because over 2,500 students live on the STP campus, there is an air of constant activity, no matter what time of the day, he says.

Though Utrecht Science Park is situated on the campus of the University of Utrecht, it is not formally connected to the

Managing Director Utrecht Science Park

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COVER STORY AT THE EDGE OF INNOVATION

TURKEY

university. This was a conscious decision made during its formation, according to de Gelder. They chose be a non-profit organisation which works for the provincial government, city council, the universities in the area, and the business community. “Though the land is owned by the university and it is part of our board of directors, the science park is independent. For the university, the core business is education and research and this is something else altogether. To run a good STP, you need excellent hospitality skills, be outgoing and speak the language of entrepreneurs; knowledge that the university by definition doesn’t have.

Now, all of us are part of the ecosystem, on an equal basis and fulfilling different roles. So with a small, dynamic, credible and independent organisation leading development within a university campus, we have managed to combine the best of both worlds.”

Most of the 82 companies at Utrecht are Dutch and a majority of them specialise in life sciences research. The year 2009 was a turning point for the STP with the entry of its first MNC, the French company Danone. “Danone decided to establish the research headquarters for Europe in medical and baby nutrition in USP. Before this

we too were grappling with questions like should we have large companies in our STP and, if so, do we need to impose special conditions on them to ensure they don’t become too dominant. For us it was an important development. We had small companies emerging from our incubators, we had medium-sized, fast-growing companies, but the big MNCs were good for reputation and creating volume. They also have larger research budgets and attract international scientists. That year was also when we were thinking about our value proposition, whether we were telling a good story and delivering something the world was waiting for.

But being able to attract a company like Danone, which believes in open innovation, showed us we were on the right track,” he says. Utrecht doesn’t want fences. When you stand outside Danone, you can see what’s happening in the building. You can see the pilot plans, look into the rooms where the new products are tasted, de Gelder says. “And a company with a great reputation and high level of knowledge is always great for a science park.

They act as a magnet for other companies. Danone’s entry invigorated the stakeholders, made a real team out of us and helped accelerate the development of the next phase of the STP

FILLING THE RESEARCH DEFICIT

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urkey, which has for centuries been the gateway between Asia and Europe and has enjoyed the best of both worlds, continues to bring together Asian innovation and Western corporate ethos. Gökhan Çelebi, who is the Coordinator for Incubator Programs at Teknopark Istanbul, says it’s an exciting challenge to manage the needs and demands of these different entities. “Startups are more flexible and can be guided towards a certain direction in line with national priorities but they often lack focus. And while large corporates are more rigid, they have a clearly defined mission and vision which gives you are better picture of what you are getting into,” he says.

The Turkish government has mandated that 10% of all companies in STPs should be in the incubation programme. Teknopark Istanbul meets this quota some more, with 30 incubatees and 90 mature and major companies working alongside each other.

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Also, unlike most tech parks in the country which focus largely on ICT, Teknopark Istanbul “complements the economy by focusing on disruptive technologies and appointing companies that deal with hardware R&D. Energy (and clean energy), aviation, life sciences, maritime, and advanced electronics are some of the sectors we push for because, within the country and globally, this is where an innovation account deficit exists,” he says. “So if we don’t close this gap and create relevant skills, we’ll be more dependent on the outside.” He admits that these are investment-driven and says that his STP is prepared to put money into the critical research that is happening around these fields. “By 2023, we would have spent $4 billion (QR15 billion) and most of it would go towards cultivating entrepreneurship around these areas.”

While only a third of the startups have reached the prototype stage, Çelebi is excited about some of the work that they are doing. “One of the companies that is working on the Internet of Things is developing solar-powered smart bins. They can compress trash to up to 1/5th of their original size and the tech park is going to buy all our bins from them once they are ready. One of our more promising life science projects is being headed by a Harvard-returned researcher who is working on a microchip that can quickly and efficiently separate cancer cells from healthy ones,” he says.

While the incubated companies enjoy many benefits like various tax exemptions and free office infrastructure, Çelebi feels these are necessary but not sufficient. It’s the STP’s “360 coverage and value added services” that is a big draw for young entrepreneurs and makes them more productive.

Jointly owned by the Undersecretary for Defense Industries (public sector) and the Istanbul Chamber of Commerce, there is a

conscious push on entrepreneurship with the knowledge that the future lies here.

And it is exactly for this reason that attracting MNCs is also a priority. “We already have some big names like GE, Siemens, SAP and Accenture (and more are on the way) who are working out of the tech park. We carefully review and accept companies based on their total size and scale of operations and they do have some restrictions which Turkish companies don’t, but the benefit from MNCs is undeniably and closely linked to the development of our own companies. They often need qualified subcontractors to outsource certain operations and our smaller companies can help them out here. This is called clustering where we have one big guy and a group of small guys working around them, providing support in the fields of IoE, big data, etc.”

For the MNCs too, Teknopark Istanbul’s value proposition is inviting. “They don’t just come for the tax relief. One of the important reasons they do is because of the easy reach to qualified human resources through us. Our close relationship with universities means the best of PhD and Masters talent is just an arm’s reach away.

We have signed contracts with eight universities in Turkey and are helping them set up satellite campuses in our premises. One has opened their technology transfer office and another wants to set up their own incubation centre.” It is this self-sufficient environment that attracts some of the biggest players around the world.

And even though there isn’t often a tangible KPI that a tech park openly commits to, Çelebi says Teknopark Istanbul would be considered a successful national project by all accounts if by the year 2023 (which is the 100th anniversary of the Republic of Turkey) it was contributing to at least 1% of the country’s GDP.

“LESS THAN 5% OF STPS ARE USING SOCIAL MEDIA EFFECTIVELY TO MARKET THEMSELVES. THIS IS A GREAT TOOL FOR REACHING OUT TO YOUNG ENTREPRENEURS, HIRING THE RIGHT TALENT AND PROMOTING YOURSELF ON THE GLOBAL STAGE.” GÖKHAN ÇELEBI

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COVER STORY

HONG KONG

AT THE EDGE OF INNOVATION

A GATEWAY TO CHINA

H “IN THE FUTURE, INNOVATION WON’T BE ABOUT SHUTTING THE DOORS AND DOING YOUR OWN RESEARCH IN YOUR LAB OR UNIVERSITY OR COMPANY OR EVEN COUNTRY. IT’S INCREASINGLY ABOUT COLLABORATION AND SPARKING IDEAS BY THE MEETING OF MINDS.” ALLEN MA

Chief Executive Officer Hong Kong Science & Technology Park

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ong Kong is also on a path to diversify its economic base from the activity around financial services and Hong Kong Science & Technology Parks is at the forefront of this effort. “In the 60s and 70s we were the biggest exporter of toys,” says Allen Ma, Chief Executive Officer, Hong Kong Science & Technology Park. “From being a world leader in light industries, we began to lose our competitive edge with China starting to open up and build their economic systems. Most of the factories began moving into China and expanding further inland,” he remembers. Around the turn of the millenium, the government decided that it needed to embark on a new industrialisation policy that attracted MNCs and SMEs alike and helped redefine what businesses Hong Kong wanted to be in with the use of innovation technologies. And thus the HKSTP was born. Beginning as of this year, the massive STP completed Phase 3 of its expansion and now manages the STP, three industrial estates, a design centre and three incubators, all next door to each other but with their own unique mandates.

The HKSTP broadly functions around

seven technology clusters - semiconductors, ICT, green tech, biotech, precision engineering (which has been expanded to include new materials), design and industrialisation. “They form the basis of how we run the businesses,” Ma says. Quite contrary to what you would expect, the STP seems to have adopted a certain amount of laissez-faire policies. “The government, though it is the single largest shareholder in the tech park, doesn’t in any way dictate how it is run. We are not directed to invest in certain sectors and neither are we told about what kind of companies we should accommodate. We are run like a private entity with a board of 17 members (only one of whom is a government representative) made up of reputable businessmen, professors and research specialists we invite.

They do standard compliance, approve accounts and big expenditures, the appointment of the CEO, review strategies recommended before implementation,” he says.

Because they use the tax payers’ money, Ma says full transparency is essential in their operations.

But this is where the similarities end. “An STP shouldn’t be run like a normal business where it works towards maximising profits

UNITED STATES OF AMERICA

for shareholders. STPs are for the long term. Success isn’t measured in terms of money but by the talent we nurture and our impact on the ecosystem. Though a proper KPI needs to be agreed upon at the board level, the STP should be under no pressure to produce short-term profit at the expense of the long-term mission by being forced to make decisions that are not optimal.”

While Ma says no conscious effort was made to balance out the mix of companies at their tech park, it naturally came to a certain equilibrium. Now about 40% of their companies are foreign-based. “This ratio is important, however, when considering that overseas companies bring new thinking and connections. R&D is about brain power and ideas and collaboration which helps your own businesses grow overseas.”

Hong Kong has been a magnet for MNCs for several reasons.

“We have a wonderful cosmopolitan culture, the compactness lends itself to the ease of doing business, strong IP regulations, no ceiling on remittances in and out of the country, and a transparent rule of law based on British systems. Foreigners who come here adapt easily because of the high standard of living,” Ma points out. And why is this important? Because of China. “Hong Kong’s appeal comes from the access it provides to the Chinese market. Companies around the world are looking for entry into the second largest country by GDP and the easiest way to understand business in China is to come to Hong Kong. The commute between us and southern China is short and easy. There are plenty of manufacturing facilities in and around us with a supply of cheap labour and a growing middle class that is an eager consumer of global products.

Which is why we offer a soft landing programme at the STP where companies stay and learn about doing business in the People’s Republic of China. Most companies establish their Chinese headquarters in Hong Kong, with IP registration, research and core decisions being made here,” he says.

But within the STP, the focus is on creating an environment that is conducive to innovation for MNCs and SMEs alike.

While the incubation programmes have been tailored to meet sector-specific needs, the companies can easily find suppliers and customers among its tenants. "But more importantly, we facilitate the meeting of like-minded people with plenty of networking activities, offering shared labs and opportunities to partner with our universities (all of whom have labs in the STP) to jointly work on research projects. The universities’ technology transfer office licenses their IPs to companies which discover greater values in them when put together with a family of IPs.” It is little details like these that have catapulted the South East Asian region to the lead of the innovation curve. Ma paraphrases Steve Jobs about being hungry and curious. “The region’s stellar economic progress is relatively recent. Thirty years ago many still had very low GDPs. I feel this is because the people of the region are by nature hungry for a better quality of life. This is coupled with an innate sense of curiosity; we want to learn and are constantly searching for answer to things we see. These have been the driving forces among our younger people. But there is something that is holding us back still – our reluctance to think differently. We tend to stick to the mainstream and parents seldom allow their children to go off track. But we shouldn’t be afraid to think wildly because that is how the best ideas of innovation are created,” he says

INNOVATION WITHOUT BOUNDARIES

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here are some areas in the world that have had the type of results that STPs have had without really having an STP. “Silicon Valley is an example”, Paul Krutko, President and Chief Executive Officer at Ann Arbor SPARK, mentions. “It’s more about creating an organisation that coordinates a number of activities without being tethered to a particular geography.” Which is just what this independent non-profit entity is all about. Ann Arbor in Michigan, US, is centred on the anchor institution of the University of Michigan, which Krutko says has one of the largest research budgets in the whole country – $1.6 million (close to QR6 million) a year and has the largest concentration of IT professionals after Silicon Valley. With a rich ecosystem in place, SPARK acts as a “facilitator” and “coordinates service delivery to companies to where they are located”. The big pull is not space, Krutko says, and this is validated by many of the conversations he has during the conference. “Particularly in the US, innovation districts have organically developed, often in the centre of the city, reflective of young people who like to live and work in that environment. They are not drawn to go to some park separate from the city,” he says.

For more than a decade now, Ann Arbor SPARK, an entity being supported by private companies, the university and local and regional governments, has been an impact on the economic future of the geography through its support for early-stage and mature. “When it comes to startups, our objective is to help identify their markets, get their first customers and send them on their way; not house them for many, many years,” he says. This means a suite of services like access to capital, mentoring, bringing in consultants for those that need help, a CEO-in-residence programme, etc. In fact, due to their track record with early-stage companies, they were given the opportunity to support and operate a programme for State of Michigan where they invested $25 million (QR455 million) in 100 companies on their behalf. “We have the expertise and a good reputation in identifying early companies before the venture capital stage,” he says.

But, like all well-balanced STPs and areas of innovation (AI), mature companies and foreign enterprises also seek out Ann Arbor SPARK’s expertise of a different kind. “Nearly half the investment we have had is FDI from overseas, from companies looking to locate operations in North America. And due to the heritage of the region, with Detroit being one of the epicentres of the automotive world, we lead on strategy for the region for Ann Arbor; to be influential in connected, autonomous and automated transportation. All the buzzwords of today.” This is reflected both in the kind of startups they support and the type of MNCs who approach them. “Mature QATAR TODAY > NOVEMBER 2014 > 53

COVER STORY AT THE EDGE OF INNOVATION

companies usually need help to successfully open a new operation in our community,” he says, illustrating how they help them find sites, connect to regulatory committees, give them access to the right talent for their enterprise and generally act as facilitators in helping them settle in. “Mahindra, the Indian MNC which manufactures heavy vehicles, wanted to enter the US market with a new product – an electric scooter that they had designed from the ground up. They had miniaturised the Tesla motor, developed the battery and wanted to produce and sell these in the United States, particularly the sunnier campuses in California and Florida.” SPARK helped Mahindra find a facility to set up the factory, got them government support through some financial incentives and they are now up and running, producing over 100 scooters a month. They similarly helped Faurecia, a large auto supply company based in Paris, to acquire a Ford facility in the community and totally rebuilt it.

“Often STPs try to emulate someone else. But what you need to focus on to be successful are best practices and sectors that stem from what problems you are trying to solve in the community and the assets you have.” Which is why the emphasis

“ONE OF THE COMPANIES WE ARE WORKING WITH IS THE LEADING MANUFACTURER OF HEART-LUNG MACHINES USED IN HOSPITALS GLOBALLY AND IS DEVELOPING SMALL DEVICES TO ASSIST CONGESTIVE HEART FAILURE.”

there is on the automotive cluster and their strengths in ICT, with a little of devices (particularly, medical) and advanced manufacturing thrown in. “Sometimes STPs can get off track on this because they aren’t tethered to what’s going on in the community. If you don’t have the institutions to support, say, bioscience you have to invest a lot of money to get yourself there,” he says. Investment that oftentimes only the government would be prepared to make.

That’s why the non-profit private-public partnership is the prevalent model in the US, he says. “Government funding can be tricky because if the funds dry up or the government changes or a new technology minister with different ideas comes in, STPs might find themselves a little vulnerable. It is accepted fact that the most successful parks and regions are where private sector involvement is maximised,” he says, while allowing that in many countries that have aspirations for knowledge economy, like Qatar has, government support is important. “Instead of the leadership saying let’s just let things happen, the government makes an intervention in the beginning to jump start the ecosystem, especially in areas that don’t quite have a history of innovation.”

PAUL KRUTKO

TAIWAN

President and Chief Executive Officer Ann Arbor SPARK

THE STATE AT THE CENTRE

T

he first of Taiwan’s three government-owned and -managed tech parks opened three decades ago and it has added one every ten years since then, “every time we ran out of space,” as Andrea Hsu, Director of Investment Services Division at the Southern Taiwan Science Parks Bureau, puts it. The Northern, Central and Southern Taiwan Science Parks Bureaus all function under the auspices of the Ministry of Science and Technology and, unique among the STPs we have spoken to, involve the highest levels of government involvement. “All of us who work for the bureau are government

54 > QATAR TODAY > NOVEMBER 2014

officers,” says Chun-Wei Chen, the Director-General of the STSPB, who also believes that they won’t have the free rein on resources that they currently do otherwise.

Also interesting is that these STPs are not financed by tax payer’s money but rather by private borrowing through government credit. “Taiwan is not a big country; it’s the size of Switzerland. So the government’s role in allocating resources fairly and efficiently to all companies is key for the success of our STPs,” Hsu says. Chen also says he has heard a lot of talk at the conference in Doha about combining manufacturing and R&D in STPs. “We did it 30 years ago!” he says, talking about their operation mod-

el which has earned Taiwan its place among the top five machinery exporting countries in the world. “When manufacturers earn money, it is invested back into R&D and thus sustains itself without just depending on government funds.” It all began back in the day with the ubiquitous semiconductor.

“The first STP wanted to recreate the Silicon Valley experience in Taiwan and hence was established near two of the biggest universities in the country. It was also in close proximity to ITRI, the Industrial Technology Research Institute. The primary sectors when we started off were semiconductors and electronic components and they still make up 90% of our annual sales,” says Hsu. In southern Taiwan, with two large industry clusters around integrated circuits and opto-electronics, the annual revenue is in the league of $20 billion (QR73 billion) and involve the combined efforts of more than 80,000 people who work with the 360 companies there.

Such is their two-fold strategy, according to Hsu. “In the past the accent was on attracting foreign companies to build manufacturing capability and boost development. But now we are also sponsoring companies to create enterprises in the STP through our incubation and innovation centres.” This is evident from the fact that less than 15% of the companies based out of the southern STP are foreign-based.

Director-General of the Central Taiwan Science Park Wayne Wang, who heads the STP that houses several high-tech industries like ICT, machinery and biotech, says that Taiwan’s big plus points are its strong regulation and legal environment and large human resource pool, most of whom are university-educated, and the national focus on R&D. Three percent of the country’s GDP is invested into R&D and the importance of getting returns is highlighted at

every stage, right from the university level where professors ask their charges to think long and hard about how their research can contribute to the larger picture. In this tech park, more than 30% of the 120 companies are MNCs, mostly from Japan, Hong Kong, US and Germany. “We are constantly learning from their experience and innovation and this has resulted in a local supply chain giving plenty of local companies an opportunity to improve their capability,” he says.

While the STPs keep a close eye on several KPIs like annual revenue, number of personnel, talent cultivation, number of new companies and their investment in R&D, they also know they have a big role to play outside in advising other sectors of government that can affect some of the external factors that influence their functioning.

“For example, early-stage tech research is very important. Universities here do a lot of research but they need to think about how to transform it into a technology and then a new industry,” says Wang. The government encourages this by generously financing university research grants and allowing them to own their work

“THE MINISTRY OF SCIENCE AND TECHNOLOGY HERE HAS A THREE-PRONGED STRATEGY THAT PROMOTES SCIENCE AND TECHNOLOGY INNOVATION, ACADEMIC RESEARCH AND THE DEVELOPMENT OF STPS.” CHUN-WEI CHEN (Centre) Director-General Southern Taiwan Science Park bureau with WAYNE WANG

Director-General Central Taiwan Science Park, and

ANDREA HSU

Director of Investment Services Division Southern Taiwan Science Parks Bureau

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