Pilosopong Rodec

2010-02-11T01:49:00.001-08:00

Philippine Innovation System

2008-09-28T16:09:00.000-07:00

It is ironic that there are world-class researches in the universities while in the provinces, they still use technology handed down generations ago. While there are groups engage in Laser and Robotics research, coconut farmers are still using traditional methods in copra (dried coconut meat) production when there are newer method that produces higher quantity and quality of coconut oil. The reason for this is not because scientist doesn't want to help the coconut farmers nor that the coconut farmers doesn't want to upgrade their technology. The problem is the Philippine Innovation System.

There is a large group of technology developers (the scientists and engineers) and there is also a large group of technology users(farmers, industry, etc). But there is no existing system for them to meet, coordinate and collaborate. There is no Innovation System, or rather the existing Innovation System is not working effectively.

The National Innovation System is complex if viewed from the point of view that it involves the collaboration of the academic sector, the private/industrial sector and the government. There systems and procedures that has to be setup in the academe (how they develop technology and license it), government (how they will facilitate the technology transfer) and the industrial sector (how they will use the technology). In the US, there is a Law that facilitates this transfer, the Bayl-Dole Act. For more than a decade now, advocates of technology management has been advocating the creation of a similar law for the Philippines. But it will involve orienting our law makers on the importance of technology management and we cannot see that happening in the next five years. To implement a National Innovation System, there really has to be a nation-wide change.

But just there is an Alternative Catch-Up Strategy, there is also an Alternative National Innovation System Strategy. Instead of the Top-Down Approach (start at the National Level) we could adopt a Bottom-Up Approach (start with Individual Entrepreneurs). If the academe and the government has yet to setup systems how to transfer technology, individual entrepreneurs could actually approach academic institutions and government agencies for the purpose of developing a new product, for improving the competitiveness and profitability of his company.

If an inventor/entrepreneur wants to improve the quality and quantity of coconut oil by developing an alternative to the current copra production system, he must:
1. Understand the situation of the coconut industry and the coconut farmers. Why they are still using the copra system, it's strength and weaknesses, and develop the specification or requirements of the new system. There is a cost involve in the transition and it's benefits should far outweigh the cost involve.
2. Develop or research another way to extract the meat from the coconut from chemistry concepts
3. Develop a prototype using concepts in chemical and mechanical engineering
4. Test his prototype.
5. If successful, he could the proceed in developing a production system for his equipment
6. Setup a marketing system to re-educate coconut farmers and a distribution system to make the equipment available to farmers nationwide

Many inventors failed because they thought that their role is on just step 2 to step 4. The other steps are 'non-technical' in nature and they expect someone else to do that for them. But no one does, thus the failure of the innovation system. Or sometimes the initiator is a marketing expert that knows and understand step 1 and setup 6. However, without step 2 to step 5, he doesn't have a product, thus again, the failure of the innovation system. There must be a merger of technical and non-technical knowhow for a technology-based enterprise to form. This might seem overwhelming for a lone entrepreneur but the next two sections on Rapid Product Development and Rapid Enterprise Development discusses how he can be able to do this.

Rapid Product Development Methodology

2008-09-21T19:50:00.000-07:00

Whereas the problem of developing a new product is problem enough, the Catch-Up Strategy calls that we must develop new and better products at a faster rate than competitors abroad. But if the current state of the Philippine Innovation System couldn't facilitate product development alone, how could it support rapid product development? Our answer: It might be the only possible way.

Traditional product development cycle takes months, years, even decades. It involves the formation of a Product Development Group. If it is a new software, you need a team of programmers. If it is a new equipment, you will need electronics engineers, instrumentation engineers, mechanical engineers and fabrication engineers. Because of the highly technical nature of work involved, employers usually has to train their employees for several months even several years. This involves millions in cost in terms of salary, equipment and operating cost. Small entrepreneurs would wish they can assemble a development team but they don't have the luxury of capital. How could they develop a new product?

Another approach is the Engineer-Entrepreneur Approach wherein the entrepreneur is an engineer or a scientist and he will/can develop his own product. There are few amazing individuals that could do that and we usually call them Inventors. But if you're not an inventor and you don't have money, what do you do? You must realize that "two weeks is a long time.."

"Two weeks is a long time.."

-- Danilo Rey, General Manager, i-ARC System Integrators

As a physics graduate, our options is to either continue with our studies and teach at UP or leave the academe and work at a non-physics job and earn money. I wished there was a way to stay and study/teach at the academe while earning extra money. This rapid product development methodology is meant to tap the skill of science and engineer graduates that choose to stay at the university, providing them with a chance to broaden their experience while earning something extra during their semestral break which last for two weeks.

I started i-ARC System Integrators (http://i-arcsys.blogspot.com) with two friends, Danilo Rey and Edwin Allas, with the idea of rapid product development using a virtual network of technology workers. With just P30,000 in capital, we were able to develop several products such as the autonomous vehicle counter and an automated traffic barrier.

How were we able to do it?
1. We are good engineers and scientists ourselves with almost 40 years of R&D experience between us.
2. We are able to properly define the requirements of the product and the capabilities or expertise we lack to be able to properly design the product. We then look for experts in the areas that we need assistance using the 'techniques' above.
3. A month or two before the semestral break, we start planning the work schedule and activities for the two weeks our expert is available. Even before the activity starts, we determine if our capability is enough to finish the project within two weeks. If not, we look for more experts or more resources.

Actually, we start working even before the two weeks break. Just like Lego blocks, individual components could be developed by individual members at their own pace, at their own time. Design problems are foreseen and solved before hand. The two weeks allotted for development is targeted to be the stage where everything is put together and tested with all the problems at the component level previously solved. If done properly, two weeks will be more than enough time for system integration.

Although this methodology was originally designed for us to be able to tap friends working at the university, we later realize that the time constraint is also true for our friends working in private corporations. They couldn't participate in projects that would require them to be absent for several weeks. However, it they don't have to do it full-time and they would need to work only one weekends, they could consider being part of the development team.

The power of the Internet and modern communication technologies made this sort of collaboration possible. And with it, we open the vast potential of tapping any expert anywhere in the world.

Although this methodology was developed to augment our lack of start-up capital, this methodology is still worth considering even if an entrepreneur has lots of money. Besides the minimal development cost, you get to hire very good people to develop it and the short development time also doesn't hurt either.

With this methodology, entrepreneurs can become technopreneurs and accomplish step 2 to step 5 in the Innovation Chain (see Philippine Innovation System). For the completion of the Innovation System see the next section on Rapid Enterprise Development.

Pilosopong Rodec

2008-09-21T19:31:00.000-07:00

About Pilosopong Rodec

Pilosopong Rodec is the founding Chairman of the Board of Directors of the Pilosopong Tasyo Technopreneurs Multipurpose Cooperative. It was initiated by students and alumni of the Master of Technology Management program of the Technology Management Center(TMC) of UP Diliman. Technology Management is a graduate business degree similar to an MBA (Master of Business Administration); however, it focuses on using technology as leverage for corporate growth and competitiveness. We take inspiration from "Pilosopong Tasyo", a fictional character in "Noli Me Tangere" by Dr. Jose P. Rizal, our National Hero. He is potrayed as an old man with revolutionary ideas ahead of his time. Because of fear of the Spaniards, he writes backwards so that few could read his writings. This is because he doesn't write for his current generation, he writes for the future. Like him, we see that what we want is difficult to attain and we may or may not be able to attain our goals within the current generation. But we will strive on. Because we are not fighting just for the current generation, we are fighting for the future.

Physicist. Engineer. Entrepreneur.

As an Applied Physics student of the National Institute of Physics, UP Diliman, Rodec has seen the scientific and technological capability of Filipinos. Because of scientists like Dr. Caesar Saloma, Dr. Vincent Daria and his other lab-mates at the Instrumentation Physics Laboratory, he is convinced that in terms of brain matter, Filipinos can compete with the best in the world. Unfortunately, few people know them and their scientific contributions. He thinks that it is because their work is too high tech to be understood and be beneficial to ordinary Filipinos. He was struck by the question poised by one of the thesis evaluators after the thesis defense of a batchmate regarding cosmic gravitation, "OK naman 'yan thesis mo. Pero paano 'yan makakatulong sa Pilipinas?" [ You're thesis is good but how could it help the Philippines?] Because of this, he became an engineer instead of pursuing higher studies in Physics.

He took up MS Electrical Engineering Major in Computers and Networking at the College of Engineering, UP Diliman. He also worked as an Electronics Engineer for Micrologic Systems and the Advanced Science and Technology Institute of the Department of Science and Technology. As an engineer, he is able to develop products and systems that improve people's lives. But besides his industrial automation project with the Metro Cebu Water District that remotely control and monitor their pumping stations that supply water to Southern Cebu City, his and his co-worker's other projects failed to leave the laboratory, failed to change people lives.

He realizes that to commercialize technology, there are numerous 'non-technical' stuff he has to learn. Ideally, there must be a support structure that commercializes technology developed in the university. It is part of the innovation process of many countries but it is not present here in the Philippines. After spending several years as part of the academe and several years more as a government researcher, he realizes that the government and the academe are not able to commercialize technology not because they don't want to, but because they can't. Their primary concern is the development of science and technology and that is what they do best and the systems and policies that guides their operation is geared towards that goal. Unfortunately, that focus on research also set up barriers against commercialization of the technology because the academe and government research agencies are not meant to commercialize the researches. Commercialization is the role of the industrial sector with the academe and the government as support. Wishing to developed an Innovation System that is applicable in the Philippine setting, Rodec, an engineer, decided that he must commercialize technologies himself by becoming an entrepreneur.

He took up a Master in Technology Management at the Technology Management Center of UP Diliman and started his own company, i-ARC System Integrators (http://i-arcsys.blogspot.com). He tried answering the question of how a Filipino scientist or an engineer could become a technopreneur. He read a lot of books but most of them are about the experiences in the US, Japan, Taiwan, Singapore, etc but none in the Philippine setting. There are local books in entrepreneurship but they deal with traditional businesses rather that technology-based enterprises.

He learned the concept of the National Innovation System and how and why it is almost non-existent in the Philippines. He studied the Innovation System of other countries but he thinks that we can't adopt their policies. Each country is unique and just as they have developed their own innovation system, we should, too. The main weakness of the Philippine Innovation System is the linkage between technology developers and technology users. Ideally, there should be systems and policies that links the two and he hope that there would be one.. someday. In the meantime, he would like to share ideas and suggestions how the lone entrepreneur -- the smallest possible unit of collaboration -- could bridge the gap. Using the availability of knowledge on the Internet, advances in Information and Communication Technology, and the Rapid Product Development and Rapid Enterprise Development Methodology he developed, Filipino technopreneurs can complete the Innovation Chain. In lieu of nationwide policy changes which he can do nothing about, he calls for a 'mindset' change or a philosophical change in Filipino entrepreneurs. If we couldn't do anything about the problem, let us change how we view and react to the problem.

He was suppose to write a book but, instead, he wrote this blog. He would like to form a globally competitive company and he believes that there shouldn't just be one company, there should be hundreds and thousands. In the face of global competition, one Filipino company couldn't do it alone. It must be supported by numerous other local companies. Through this blog, he hopes to guide and inspire other Filipino entrepreneurs to envision a future where global Filipino companies is the norm rather than the exception.

Rich Engineer, Poor Engineer

2008-09-12T17:33:00.001-07:00

This blog is about mindset change and the proving the power of knowledge. Filipinos value education and we learn a lot of things in school. But one of the things we don't usually learn about is financial intelligence. Robert Kiyosaki, in his book "Rich Dad, Poor Dad", said that people are not poor because they have poor parents or because they weren't lucky enough to have good jobs or because the economy is poor. They are poor for the simple reason that they don't know how to become RICH.

They follow a rat race wherein when their income increases, their expenses also increases. This is illustrated below:

For most people, as their income increases, they buy better clothes, eat at costlier restaurants, buy newer cellphones. As their savings increases, they buy more expensive things. They later buy a car or even buy a house. Along the way, their incur liabilities which we loosely define as expenses bought about by expenses. As they buy a car, they usually acquire a loan they have to pay on a monthly basis. Besides the interest payments, there are other expenses that comes with owning a car, primary of this is the cost of fuel. Added to this is the parking fee and the cost of maintaining the car (oil change, tires, battery, etc). This requires them to work harder to earn more. But they never really get rich no matter how high their income becomes because their expenses also increases. Rich people are different. As their income increases, they use it to acquire ASSETS.

Instead of just using their income in their expenses, they use it to buy assets. We also loosely define 'assets' as acquisitions that generate income. For example, Roel earned enough to be able to buy a condo unit. Normally, this is considered an expense. However, instead of using it himself, he rents it out. This rent then augments his monthly income, enabling him to save more and buy another condo unit. Which he also rents out. If he continues this cycle, it will just be a matter of time when his income from his 'assets' will exceed his regular income. He doesn't have to work again. Bacause of his financial intelligence, instead of working to earn money, he makes his money works for him.

This is how realtors become rich.

How do scientists and engineers become rich?

Unlike realtors and businessmen, scientists and engineers doesn't have money or properties to invest. What they do have is knowledge, science and technology. It is what they invest in terms of time, effort and even money. How do they become rich?

They must use the same financial intelligence formula: they must convert part of their expenses into assets. Instead of just using money to generate science and technology, they must use science to generate money. The most commonly know way is to acquire a patent and earn from royalty payments or licensing agreements. Another way is become technopreneurs and commercialize the technology themselves. Another way, that is not so obvious is found in the portion of this blog on 'Tapping Filipino Scientists and Engineers' and the 'Alternative Technology Catch-Up Strategy'. Why don't they use their knowledge in developing other products or services besides what they are researching on? Besides contributing to economic development, it is also a chance for them to earn extra income.

Vision

2008-09-04T20:43:00.000-07:00

"Imagination is more important than knowledge."

--Albert Einstein

"Vision is more important that knowledge."

--Pilosopong Rodec

In Rudyard's Kipling's "Captains Courageous", a boy,Harvey Cheyne is the son of a wealthy railroad magnate raised (and quite thoroughly spoiled) by his over-indulgent parents. Washed overboard from a transatlantic steamship and rescued by fishermen, the young Harvey cannot persuade them to take him ashore, nor convince them of his wealth. However, the Captain offers him a job as part of the crew until they return to port. With no other choice, Harvey accepts.

There follows a series of trials and adventures where the boy learns to adjust to his rough new life, and with the help of his friend, the captain's son, Dan Troop, he makes fine progress. Eventually, the schooner returns to port and Harvey wires his parents. They rush to the fishing town and find to their amazement that their child has become an industrious, serious and considerate young man.

On their way home, the father wants the son to go to college to learn all that he can. There he will learn with fellow students, share the same classroom, share the same teachers and read the same books. But he will be different. Because while his classmates looks for a job after graduation and earn a few thousand dollars a year (book was printed 1897), he will be fighting for millions of dollars.

This story illustrated the difference vision makes. Same school, same teachers, same books but one is trying to earn enough to live while the other seeks to earn millions. Who do you think will eventually earn a million bucks? We believe this is the biggest difference between Filipino technopreneurs and their American, Singaporean, Japanese counterparts. Its a matter of Vision. While Filipino entrepreneurs set up business to be able to live comfortably, buy a house, buy a car, send their children to prestigious universities, their foreign counterparts set up businesses to change the world.

Maybe there is a big difference in the availability of resoures and our chances of success but what excuse could we give for not being able to dream of changing the world? Is it because we just accept that Filipinos don't have a right to dream big? Maybe were afraid to dream because we don't think we could achieve BiG dreams. But isn't it what dreams are suppose to be?

Bill Gates and Steve Jobs are some of the forerunners of the computer age. The usher in the computer age not just because they are technology geeks but because they envisioned a future where every home will have their own computer.

If the Philippine Silicon Valley can someday become a reality, be must start dreaming and believe in it. We Filipino technopreneurs can someday develop products that can change the world someday, we must start dreaming of it today. Because that is where it all starts. Dreams. Visions. Today.

Starting a Filipino Technopreneurial Revolution

2008-09-01T07:16:00.000-07:00

Amid the rising oil prices, economic instability, political upheavals and lumbering infrasturcture development, the Filipino people is faced with hopelessness in creating a better future for the Philippines. Scholars and economic experts have repeatedly emphasized the need for better roads, production facilities, availability of sources of capital, better market linkages and numerous economic and political reforms to set the country towards the path of economic recovery. However, despite efforts by the government, it is difficult to imagine, much more believe, that these reforms could be implemented in the next five years. It is even sadder that we can't see those reforms happening even in the next ten or twenty years.

Faced with this scenario, most Filipinos turn to a life as immigrants or workers in other countries. Their hope of a "magandang buhay and magandang kinabukasan para sa kanilang mga anak" (better life and future for their children) lie in moving abroad. But taking Filipinos out of the Philippines doesn't mean that you could take the Philippines out of the Filipinos. There are millions of Overseas Filipino Workers (OFWs) and Filipino immigrants abroad but they all yearn to someday return to the Philippines when they retire or when economic conditions are better. How could they ever return with our bleak economic outlook?

One answer, we at the Pilosopong Tasyo Technopreneurs' Cooperative believe, is 'philosophical' in nature. If we can't do anything with our physical reality, we can always change how we view them and how we react to them. Problems are said to be opportunities in disguise.

We offer an alternative approach to the problem which we can't solve using the current industrial economy concepts. We must realize that the world has entered a new age over the past decade. From an industrial economy, we have now entered the knowledge economy. The basis of wealth and wealth production has changed from availability of manufacturing resources to access to knowledge and information. Because of the power of the Internet and advances in transportation and communication, resources are now available to small entrepreneurs, scientists and engineers with little capital, that was impossible before.

About this Blog

The transition from being a scientist to an engineer to an entrepreneur is not an issue of skills, it is an issue of mindset. Each of this has a different answer to the question: "What do you want to accomplish in life?" A scientist who learns how to build a computer instead of just dealing with photons and electrons is not an engineer. He must change his view from undertaking research for science sake to using science for improving people's lives. An engineer who learns accounting and knows the 3R's of Marketing is not an entrepreneur, he must want to build a company and create wealth. It was a difficult transition. It might seem like common sense but these concepts were not obvious for a scientists or an engineer. This blog aims to guide and change the mindset or philosophy of fellow scientists or engineers who wish to follow the entrepreneurial path.

A boat can't fight the current if only one person is rowing. It must be a joint effort of everyone on board and it is not enough that everyone is paddling. They must also paddle in the same direction. Just as it is important to set the mindset of individual scientists/engineers/technopreneurs, the mindset of the people around them, working with them and supporting them, must also be changed.

A castle in the sky, no matter how beautiful and grand it is, wouldn't last unless it's foundations are strong. We need to lay the Groundwork for the Technopreneurial Revolution which is the Alternative Catch-Up Strategy. Using this strategy, we could build a tradition of developing better products and companies at a rate faster than our Asian neighbors. We can start where we are now, far behind and slow to progress, but gradually building momentum until we eventually catch-up and take a share of the global market.

We hope that the government, academe and industry will one day be able to work out a system to support each other towards the promotion of technology-based entrepreneurship. It is impossible for any individual to change the government or change how the academe works or change how companies conducts their business. But if we can't do that, let us start with smallest possible nucleus of change -- the technopreneurs. This is the Guerilla Technopreneur's Handbook to the Knowledge Economy. Using concepts of guerilla warfare, an individual technopreneur could harness limitless potential through the power of the knowledge economy.

The Technopreneurial Revolution

The Technopreneurial Revolution is about economic development, harvesting the technological capability of our scientists and engineers, tapping our natural resources, creating jobs, improving rural areas and global competitiveness. But beyond all these, the simple idea behind the Technopreneurial Revolution is the Creation of Money. What fueled the growth of Silicon Valley is that it is the Greatest Legal Mean of Money Creation in the World. If we are to create a Philippine Silicon Valley, we should strive to make Philippine technopreneurship also as the Greatest Legal Mean of Money Creation in the World.

This Blog aims to serve as a guide, a Handbook, for technopreneurs to use the advances in information and communication technologies and the Internet, moving alone or as part of a technopreneurial team, to collaborate and coordinate assistance from different groups for the purpose of forming an enterprise. With this guide, he will be unburdened by bureaucracy the limitation of limited capital through access to an unlimited amount of knowledge resources. This will give the Filipino technopreneur unprecedented business agility and innovativeness to develop an 'unfair' business advantage. This new concept is the key that will allow Filipino technopreneurs with limited financial capability to compete with big established companies abroad.

It is organized in six parts. The first part aims to set initial philosophical ideas on technopreneurship. Most critical of this is the Re-definition of term. Next we set forth an Alternative Catch-up Strategy that will allow entrepreneurs not just to become innovative but to innovate faster and better than entrepreneurs from other countries. The 3rd and 4th parts are on Untapped Potentials or resources available to the technopreneur but is usually ignored. It also discusses two methodologies for implementing the Catch-Up Strategy: the "Two weeks is a long time" Product Development Methodology and the concept of the Networked Company. The 5th part narrates concepts of Guerilla Technopreneurship. If we confront established industry players head on, we will definitely loose since they are bigger and has a lot more resources than start-up entrepeneurs. Through the concepts of guerilla warfare, they could carve a niche market and find areas and strategies to grow. The last part is about ideas to Sustain the Revolution.

If we can enable just one small Filipino company competitive in the global arena, we could inspire other small enterprises into believing that they too can compete. We envision a future where globally competitive Filipino companies will eventually be a norm rather than exemptions. For this, we are laying the 'philosophical' foundations of the Filipino Technopreneurial Revolution. It is just ideas but we hope it could lead to action. Creating a better Philippines. Creating a better future.

Ten Percent Solution

2008-08-25T21:05:00.000-07:00

I had this discussion with Danilo Rey, my business partner and another alumni from UP, regarding globalization. We just purchased some spare parts and we were surprise to find out that most of the parts sold at automotive shops are imported. Japan has a better quality but China is not far behind and cost almost half that of Japan. There are locally made parts but it cost more than the China made and is of inferior quality. We know before hand that consumer goods sold at Tutuban and 168 Mall in Divisoria are made in China and the quality and price are impossible for Filipino companies to reach. [ Ex: An LED flashlight for 20 pesos with spare battery. Whereas if bought separately, the batteries alone cost 20 pesos and the LED bulb is 15 pesos. How could Filipino companies produce a 20 peso flashlight?]

Consumer goods is one thing but automotive supplies being dominated by China? Also, textiles and shoes. What local industry is safe? Local companies will die if they couldn't compete and we don't see a way for them to compete. That led to our discussion on globalization and its effect on the Philippine economy.

I argued that globalization is already in the Philippines and we have to accept that most of the products will be buy will be from China and Filipino companies should stay away from producing products already exported by China. Danny argued that Filipino companies should continue to fight, otherwise, we will end up as a country without their own industries. The government should help, the private sector should help in order to nurture and incubate our industries. I agree with him but do not believe it can be done.

Colgate or Hapee Toothpaste?

In the midst of our arguments, Atek, our assistant asked us, "Ano ba ginagamit nyo? Hapee toothpaste or Colgate? Ginagamit kasi namin ng asawa ko Hapee toothpaste. Simple lang naman gumawa ng toothpaste and 'yun quality ng Hapee halos same lang ng Colgate. Parehas lang ng Active Ingredients. Pero malaki ang mura ng Hapee toothpaste at Pilipino may-ari 'nun. Hindi 'nyo ba alam na kapag bumibili kayo ng Filipino prod0ucts, nananalo ang producto na iyon. And kapag nananalo ang ating produkto, tayo bilang mga Filipino, nananalo din." [ "What are you using, Hapee Toothpaste or Colgate? Me and my wife are using Hapee Toothpaste. It is easy to make toothpaste and the quality of Hapee is almost the same as Colgate. Same Active Ingredients. But Hapee is much cheaper than Colgate and it is a Filipino company. Don't you know that if you a buy Filipino products, that product wins in the market. And if our product wins in the market, we, as Filipinos, also wins"]

I didn't know that buying Filipino products makes them win. Atek is right.

I agree with the issue of Colgate vs. Hapee. We should help Filipino companies win by buying their products. But how about other products wherein the foreign brand has a distinct advantage over the local brand? How could we deal with that?

10% Solution

Rufino Roy Pimentel, the president of Mitech System Solutions, narrates that there was a time that Filipino firms are given a 10% advantage in government biddings. Given a local and a foreign bidder, if the local bidder can match the offer of the foreign bidder and his price is only higher by 10%, he is awarded the contract.

I think we should use this solution to the products we buy. Let's give Filipino products a 10% advantage. Given a local and a foreign brand, if the quality of the foreign brand is only better by 10%, let's buy the local brand. Let's help them win.

Keep the Lord's Day Holy

2008-08-25T20:39:00.000-07:00

An important aspect of the Filipino Technopreneurial Revolution is the issue of sustaining the revolution at the level of the technopreneur. If starting an enterprise isn't hard enough, the requirement for the technopreneurial revolution is for Filipino enterprises to be able to innovate faster and better than competitors abroad is much more difficult. At that time, I was working 20 hours per day 7 days a week and we are far from catching up on any competitor. The only way I could possibly work harder is to forgo sleeping and eating but I don't think it will be helpful in the long run. A homily by a priest at the Edsa Shrine provided the answer.

"Keep the Lord's Day holy."

--Ten Commandments

He said that God doesn't need us to keep His Day holy. He is God after all. He requires us to "labour for six days and do all our work but rest on the seventh day." not because he needs us to praise Him but because we need to rest. Reflect. Meditate. Pray. Spend time with the family. Enjoy. As long as we don't work. We might not realize it but we need to spend time to recharge and be ready for the week ahead. God, in His great wisdom, requires this of us.

Reflecting on this, I realize that we can't outwork big competitors. A team of five engineer/programmers can't outwork a team of 500 engineers/programmers no matter what they do. They have to be creative in their approach. And sometimes, you get too involve in the details of the project to be able to think creatively. You need to stop, step back and re-assess the situation, re-assess your methodologies. Keeping the Lord's Day holy is not just an opportunity to rest and recharge, it is a chance to think creatively. Without which, we would fight a losing battle to out-working the competitor instead of out-thinking him.

Continuous Learning and Improvement

2008-08-25T19:51:00.000-07:00

Although numerous skill set is needed by the technopreneur, he doesn't need to know them all to to be able to start an enterprise. Actually, most of the skills are best learned on the job. He could read all the books on entrepreneurship, finance, marketing, etc but it still won't be enough. Only a small percentage of the knowledge in the books is used in actual business practices but the wisdom to know what is important and critical and what is rubbish could only be learned as the technopreneur deals with clients, customers and employees. How can the technopreneur learn all that he needs to start and grow his company?

Continuous Learning

"An apple a day, makes 365 apples a year. Now replace the word 'apple' with 'idea'."

--Pilosopong Rodec

A technopreneur just needs to know and understand one idea per day. It doesn't have to be a complex idea or an idea directly related to enterprise development. What is important is for him to develop curiosity and an innate yearning to learn. It might seem too slow but one would be surprised how much one could learn in one year, five years, ten years. And it's not true that the technopreneur must be able to master all aspect of enterprise growth, he will hire managers for each of the area, but he must know enough to be able to tell if their strategy in a particular area is in the right direction or not.

This concept is not only true for the technopreneur or the would be technopreneur. It should be practiced even by his employees. It must be something preached by the technopreneur. For an organization to grow, each employee must also grow and practice continuous learning.

Continuous Improvement

Another key concept in the knowledge economy is Continuous Improvement. It is not enough that a company has a good product, a good manufacturing system, a good marketing strategy, etc. They should continuously try to improve on their systems and methodologies. In this age of rapid innovation, one has to run just to stay in place. A company in the top 5 position in their industry group could be overtaken by a new company in a matter of months if they stop improving their processes. There are numerous ideas and theories in Total Quality Management from American and Japanese authors that could guide the technopreneur like Dr. Edward Deming, Joseph Juran, Philip Cosby, Tom Peters, Peter Senge and Kauro Ishikawa. Their ideas are the key to the industrialization of Japan and the United States.

Although most concepts seems difficult to implement, the companies that implemented it reports drastic improvements in the quality and quantity of the product or service they provide, happier employees and more satisfied customers.

One simple implementation of Continuous Improvement is practiced by the University of the Philippines Mountaineering Association or more popularly known as UPM (http://www.upmounteineers.org.ph). It is a mountaineering organization that has established and set the standards for mountaineering in the Philippines. Of the six Filipinos able to climb Mt. Everest, three of them are members of UPM. Although they are not aware of it, they practice the Plan-Do-Check-Act (PDCA) cycle of Dr. Edward Deming.

Before any Climb, we conduct a Pre-climb Meeting to discuss PLANS for the climb (itinerary, terrain, transportation, meals assignment, climb equipment, groupings, etc). This planning and preparation is critical of our success or failure as we DO the climb. A few days after the climb, we conduct a Post-Climb meeting to CHECK and assess the climb. What are the things we did right? What are the things wrong? How could we correct them? These lessons are ACTED upon and put to use in the next climb. It is a simple strategy but after 30 years of repeating this cycle for every climb, UP Mountaineers is well respected by other mountaineering organizations.

Rapid Enterprise Development

2008-08-19T20:57:00.000-07:00

To be able to complete the Innovation Chain, it is not enough to just develop a new product, it must be manufactured, marketed and distributed. If the cost for product development is high, first time entrepreneurs will find that launching the product to market costs 10 times or even more. But the good news is, the profit exponentially rises, too.

Just as the Rapid Product Development Methodology seems to be the most viable option for a small entrepreneur with minimal capital, the Rapid Enterprise Development Methodology is also his most viable option to complete the Innovation Chain. But to be able to implement it, we must first understand the strengths and weaknesses of the Manufacturing Facility-based Economic Model, the Internet-based Economic Model and the merger of the two concepts in the Knowledge-based, Networked Company Model.

Manufacturing Economic Model

A simplified manufacturing model is shown below:

The process starts with the acquisition of raw materials. It then goes through a manufacturing process the produce a certain goods or product. Next comes the distribution system that distribute the product to retail outlets barangay-wide, city-wide or country-wide. Next is the Sales and Marketing and the After Sales Support. Each one of these steps is important if we want so sell goods to customers and if we want the customer to keep on buying our product.

The problem with this model is that it takes too much resources in terms of financing, time and human capital. It takes at least a year to setup a manufacturing facility, months just to develop a city-wide distribution system, millions of pesos in advertising cost to introduce the product to market and highly trained engineers and technicians to establish a credible after sales support. It is also very demanding to the entrepreneur because he has to be able to have a mastery of each aspect of the operation if he is to guide the growth of his company.

Internet-based Company Economic Model

A dot-com" company's business model relied on harnessing network effects. Whereas the manufacturing model develops products first then finds customers later, the Internet model accumulates customers first sometimes even without a tangible product or service. In this model, the economic value of the company is measured in terms of the number of visitors to their site per day. For example, if a website like Yahoo! has 5 million visitors per day, it translates to 5 million potential customer. In the future, when they do offer services or products in their website, it will be seen by 5 million potential customers per day. That is a lot. Thus, the high perceived value of Internet based companies. But the perceived value is not realistic causing the 'dot-com- bubble crash. It wiped out $5 Trillion in market value of technology companies from March 2000 to October 2002.

The problem with this model is that it is Knowledge-based but it doesn't produce a tangible product, thus the term 'bubble'. For our Rapid Enterprise Development Model, we will harness to power of Networking and Information and Communication Technology in order to rapidly develop a company and launch a product line.

The Networked Company

The untapped potential mentioned in this blog such as the Filipino Scientists and Engineering, Large Natural Resources, etc are not really unnoticed. The problem is that the existing economic models are inadequate for local companies to realize their potential. We present a new business model that could rapidly start an enterprise that completes the value chain yet minimize the needed capitalization. We call it the 'Networked Company' concept.

A start-up company doesn't have lots of capital, both financially and in terms of manpower. It is impossible for them to cover the whole product chain on their own. However, they should have at least one strength in the chain and they should be so good at it that it gives their company an 'unfair' sustainable advantage [ see write-up on redefinition of technopreneurship ]. They should concentrate on this strength. With advances in information, communication and transportation technologies, it is now possible to delegate the other business components to firms who specializes on them. Our business diagram then becomes:

With this setup, not only is the capital requirement and the setup time minimized, but the proper choice of partner companies could also serve to strengthen the company. For examples, instead of an under-equipped, under-staffed distribution department that takes several months or even years to setup, they could choose to partner with an established courier like UPS for next day parcel delivery anywhere in the world. Of course, costing will also play a part but with this setup, the Company can choose the most appropriate delivery service base on cost and quality of service instead of being trapped by what their limited finances can afford.

This model breaks away from the concept of the company as an office or as an infrastructure. Instead of hiring people, investing in equipments and spending on operations, business processes are now out-sourced. This is not really a new model. Many companies in the US are already practicing this concept: manufacturing in China, technical support in the Philippines, software development in India, etc. We should practice it, too.

Implementing the Catch-Up Strategy

The idea behind the Catch-Up Strategy is for various stakeholders in enterprise development to take an alternative path in order to build a culture of innovation that is better than the rest of the world. If we are to progress from a position of economic backwardness towards a technologically bright future, we should not just innovate, we should be able to innovate faster and better. The two methodologies: Rapid Product Development Methodology and the Rapid Enterprise Development Methodology are the key for implementing the Catch-up Strategy. The first one taps the scientific and engineer potential of Filipinos in order to develop a new product at the shortest time possible at the least possible cost. The second concept suggest a way to bring that product to market using a 'network' of partner companies. With two methodologies, Filipino entrepreneurs will be able to complete the Innovation Chain. They might find them difficult to implement at first but they will be surprise to find out that it becomes easier as they develop more products and the build more companies.

The next portion of this blog are ideas for sustaining the revolution.

Creating a Tiger Economy

2008-08-13T16:20:00.000-07:00

Before we go to the aspects of mindset change of entrepreneurs, let's first take a look at the big picture of entrepreneurship development in the Asian setting. Michael Hobday [1] has made an analysis of the success common to Newly Industrialized Economies in South East Asia like Taiwan, Singapore and South Korea. He enumerated four factors critical in their growth. These are:

1. Macroeconomic stability, coupled with the commitment of each government to industrial development, provided firms with an environment for long-term planning and investment.

2. Outward-looking, export-led industrial policies that provide the demand-pull for innovation.

3. Development of appropriate educational and technological infrastructure to supply a sufficient number of technicians and engineers for firms to utilize.

4. Strong entrepreneurial base to lead industrialization.

Macroeconomic Stability

Contrary to common perception, the form of government is not important for economic growth. It could be democratic, parliamentary or, even, communism as long as it provides macroeconomic stability. Let me illustrate:

Traffic is part of metropolitan life. We all wish there would be no traffic but in reality, we only needed it to be stable. If the travel time from your house to your office is 1 hour and office starts at 9am, you usually leave the house at 745am. If travel time is 2 hours, you leave the house at 645am. It would seem that the employee with the 2 hours travel time is at a disadvantage but they both arrive on time. Actually, if the employee thinks that travel time is too long, he could start looking for work nearer his home. But if traffic fluctuates everyday, they wouldn't be able to estimate their travel time causing them to be to early is some days and too late on other days.

It is the same with business. Macroeconomic factors like inflation, politics, foreign exchange could either be high or low but as long as it is stable, businessmen can adjust in order to remain profitable. Businesses survives on trends and the survival of the company is dependent on the how the entrepreneur perceives trends and reacts to it. For example, the call center industry. A few years ago the trend of the peso-dollar exchange rate is towards a stronger dollar ($1=P50 going to $1:P60). Based on this, call center companies paid in dollars by their US clients was able to invest well on their equipment, office and pays their call center agents well. But when the peso strengthened ($1:P44 and might go $1:P40), the business is not as lucrative anymore and they are wondering if they are paying their agents too much. Many Call Centers got in trouble and some did close down.

Export Oriented Economy

In this modern age of globalization, there is no such thing as a local market catered by only by local products. Advances in transportation and communication has enabled foreign companies to invade almost every industry. Local players are at a disadvantage because global players has economies of scale ( large production volumes means lower cost per unit ). One way to fight it is for the government to impose tariff and higher taxes on imported goods but it is not a sustainable solution. They say the best defense is offense. The sustainable solution would be for local companies to aim to export their products, too.

It might seem impossible for small local entrepreneurs to do that but it is important that they are aware of this issue but . The government should encourage local entrepreneurs to become exporters and local entrepreneurs must start dreaming that their enterprise will someday be global in nature. [ see topic on "Vision" under the Sustaining the Revolution heading]

Strengthen Educational and Technological Infrastructure

The strength of a nation is it's people. This is the reason why the government should strengthen its educational and technological infrastructure. We think the local and national government is already doing all they can to improve this. We should also do our part.

The strength of a nation is it's people. The capability of any enterprise is dependent on each and every employee. And a nation's economic growth is dependent on the growth and competitiveness of it's local businesses. Being a good employee is not usually associated with nationalism but it is. By contributing to the growth of the company, by producing high quality products and services, ordinary employees are contributing to the economy.

Having a good education and continuing your education even after graduation is not just the duty of the government or the company you are working for, it is a personal duty. And with the Internet, learning has never been easier. You could learn anything from fixing you house to making a robot. One just need to have a good learning attitude.

Strong Entrepreneurial Base

The technopreneurial revolution would seem to address only the fourth requirements, which is a strong entrepreneurial base. If the Philippines is to attain the status of a Newly Industrialized Economy, the four factors must all be developed, however, not at the same time.

We choose the promotion of technology-based entrepreneurship as a starting point for national development because it is something that we, small groups and individuals, could do. Ideally, the first 3 conditions must first be fulfilled (by the government) in order to create an environment ideal for entrepreneurial growth. But should we just wait for everything to be ideal before trying to become technopreneurs?

"God, grant me the courage to change the things I can, the serenity to accept the things I can't, and the wisdom to know the difference."

-- St. Francis Assisi

We can't change the global economy but we could change ourselves and the people around us and we will start with that. Through continuous improvement, Filipinos can become great entrepreneurs and create globally competitive companies. Through this handbook, we hope that they can develop globally competitive companies.

[1] Michael Hobday, “Innovation in East Asia: The Challenge to Japan”, Hants, UK: Edward Elgar Publishing Ltd., 1997.

Integrated Strategy

2008-08-07T01:56:00.000-07:00

For the Philippines to Catch-up, we it is not enough that Filipino technopreneurs can innovate, we must be able to innovate faster, better and cheaper than entrepreneurs from other country. This is the goal of the Integrated Strategy. In contrast to the 'LeapFrog Strategy' that calls for a massive unified action in education, infrastructure development and financing to 'leapfrog' the country from a position way behind neighboring nations to a position ahead of them. This alternative catch-up strategy calls for a step backwards.

The purpose of the intermediate step is to build momentum for development. One concept behind the strategy is 'Overkill'. We are using resources one or several level below their capability. It is difficult for Filipino scientists and engineers to innovate faster in cutting-edge categories because of the inherent advantage in resources of their counterparts in developed countries. But if they will divert their capability towards improving traditional industries, they could innovate faster.

Let's take for example the coconut industry shown below:

The coconut industry is a dominant sector of Philippine agriculture:

* Of the 12 million hectare of farmlands, 3.1M hectare is devoted to coconut
* 68 out of 79 provinces are coconut areas
* Over 324M bearing and non-bearing trees
* 3.5M coconut farmers
* 25M Filipinos are directly or indirectly dependent on the industry
* Annual average of 5.97% contribution to GVA and 1.14% to GNP
* 59% share in world coconut exports
* Among the top 5 net foreign exchange earners, average of US $760M per year

However, coconut farmers live in poverty. They are still limited to 'copra production' from coconuts as taught by their fathers and grandfathers. A large portion of the coconut is also wasted because they only gather the meat even if almost all the portion of the coconut has an economic value. Numerous technologies could be use to improve the quality and quantity of coconut by-products that could double or even triple the value of coconut exports. But for this to happen, there must be:
1. Entrepreneurs who will recognize the economic potential of coconut by-products;
2. Scientists and engineers who will devote some of their time in developing coconut processing technologies ; and
3. Investors who will fund the R&D, production and marketing of coconut products.
These are the three components of the alternative catch-up strategy: the Technology Catch-up, the Economic Development Plan and the Alternative Financing Strategy.

One interesting problem of the industry is the transport of coconuts. Almost every component of the coconut fruit has an economic use. However, coconut farmers usually only gather the coconut meat. They remove it from the coconut shells and husk and sells it as 'copra', a valuable source of coconut oil. The reason for this is because they couldn't bring the whole coconuts down from the mountain. Mang Anton is a farmer in Agdangan, Quezon and he has to walk for two hours to reach his 10 hectare coconut farm in the mountain. If one coconut weights 2 kilogram, how could you expect Mang Anton to bring 100 coconuts down from his farm?

Of the 3.1 Million hectares of coconut lands, most of these are in the mountains. Few are accessible by concrete roads, more could only be reached by unpaved roads and a large percentage only through muddy and slippery mountain trails. There are two possible solutions: one is to develop a cost-effective way of bringing down whole coconuts or coconut processing equipments should be developed could be carried and used in the mountains. The coconut farmers could not develop these equipment themselves but i believe that Filipino engineers and scientists could develop innovative solutions to this problem. With this, it is possible we could double or even triple the export value of coconut products. Entrepreneurs who will be able to solve this problem will earn a lot and investors will find this as a good investment opportunity. With the right team of scientists and engineers and enough funding, it is possible to solve this problem in a few months.

This example for the coconut industry is just one of the opportunities we are unable to tap. Similar opportunities are available in all traditional industries left behind by lack new technology. Numerous opportunities abound. We just have ACT now!

Financing Strategy

2008-08-06T00:17:00.000-07:00

Traditional financing instruments like banks and microfinance institutions caters only to traditional business with proven business models. They are risk averse on new companies with new products and/or new business models.

On the other end, venture capital firms caters to high-tech businesses that has a chance to get an IPO in US markets.They follow the Silicon Valley-Stanford University Model wherein they wait for the Academe to produces quality cutting-edge research. However, their wait will be in vain because of the lack of proper foundation (technological and economic) of Filipino Scientists and Engineers. Well, it is still possible and there are several promising prospect at UP, Ateneo and La Salle and at some research institutes of DOST. They just have to wait. However, below is an alternative strategy that could allow them to drastically lessen the waiting time for incubation of new technology.

"If you give fish to a man, he will eat for a day. If you teach him how to catch fish, he will eat for a lifetime."

Chinese Proverb

In the knowledge economy, it is not enough that you teach a man how to catch fish. Fishermen today are living in poverty because of competition from bigger fishing boats and larger fishing companies. With this in mind, we will extend the Chinese Proverb a little further.

"If you teach how to fish, he will life until bigger fishing boats arrive. But if he teach him [or enable him] to build bigger fishing boats, he will eat for a lifetime and also feed the people around him."

Pilosopong Rodec

The Technopreneurial Revolution is not about giving bigger fishing boats, it will be about creating a mindset for continous improvement and about creating an enabling environment to support continous improvement. The Alternative Financing Catch-up strategy centers on this:

This strategy suggests that funding institutions should fund enabling companies. In general, they are medium-sized, medium-profit, medium-risk businesses. Continuing the analogy, companies that concentrate on building better boats, if there ever is a Filipino company that does this, it will be a swim against the tide. Profitability is not guaranteed. At least not in the first few models. Starting with the model of a typical 'banca', it will take some time before they could find a replacement that is cheaper, faster, safer and more reliable that will enable them to catch more fish. It might loose money for first few years. But if it does succeed, it could revolutionized the fishing industry.

Funding institutions are risk averse because they are not investing their own money, they are investing the money of their stakeholders. And they are answerable to these stakeholders on an annual basis. They would not be happy to loose money for several years. But risk like this should be taken, not just for the fishing industry for every traditional industry in the country.

Farmers and fisherfolks live in poverty because they using out-dated methods and tools. For government agencies, instead of dole-outs and subsidies( in terms of food, electricity, fertilizer, etc), why not allocate a portion of this fund to ventures that enable them to improve their conditions themselves in the long run.

For venture capitalists, this strategy could be more difficult for them since might find it hard to to justify this kind of strategy to their investors and it would be impossible for them to shift their business model towards this. However, it might be possible that they set aside a small portion of their fund for such ventures. As discussed in the Technology Catch-up Strategy, investments have to be made to small and low-technology enterprises because it will serve as a stepping stone to future ventures in high-technology projects. If they could incubate just one company, it could develop one major industry.

Economic Development

2008-08-05T22:45:00.000-07:00

Economic growth usually centers around cities. Business set up their offices there because it is near their customers, it has better roads and communication infrastructures, near universities and colleges that provides them skilled employees. Proof of this is the large population of Metro Manila with around 11 Million people spread over 636 square kilometers or around 17,300 people per square kilometer whereas Palawan has 900,000 people spread over 14,900 square kilometers or around 60 people per square kilometer. It is so ironic that the provinces with rich natural resources are some of the poorest like Zamboanga del Norte and Surigao del Norte.

Too much development is centered around urban centers resulting in overpopulation while rural areas are neglected. Unfortunately, the rich natural resources of the Philippines are in the rural areas. The image below proposed our alternative economic development plan:

The move towards countryside development is not just altruistic in nature, us helping the poor. After all, the goal of the Technopreneurial Revolution is not poverty alleviation but wealth creation. We are spousing countryside development because that is where the 'unfair' sustainable advantage of the Philippines is -- our rich natural resources. Unless there is a massive influx of money, semiconductor manufacturing and information technology would find it very difficult to develop an 'unfair' advantage over competitors from more developed countries. However, if development efforts in Information and Communication Technology(ICT) would be used to develop our natural resources, economic development in the Philippines will greatly accellerate while making resourceful ICT engineers and scientists very rich. This growth in rural areas will then provide business opportunities in urban areas.

Technology Catch-Up

2008-08-05T05:26:00.000-07:00

Contrary to common perception, there are numerous opportunities for technology development in the country. Since the Spanish era, the Philippines is dependent on imported technology and goods . Although the market is flooded with mass produced products from China and very high-tech equipment from US and Europe for consumers, local industries and producers has a huge demand for manufacturing, automation and information technologies. We will call these technologies as 'appropriate technologies'. They are not necessarily low technology but neither are they cutting-edge technologies. But they are the set of technologies 'needed' by local industries today thus the term 'appropriate'.

A key concept of our Technology Catch-up Strategy is to encourage Technology Workers, the scientists and engineers, to do Appropriate Technology development. Ideally, they should be doing cutting-edge research to push the limits of science and technology. But if they want to commercialize their technology someday, they must start with developing and commercializing appropriate or mid-level technologies.

Dr. Henry Ramos of the National Institute of Physics has developed a technology for diamond-coating using plasma technology. It is a cutting-edge research and he was able to publish it internationally and is currently applying for patent. The primary application of his technology is on semiconductors. However, if it Dr. Ramos wants to earn from his discovery, one option he could consider is in diamond-coating ordinary things (knives, industrial cutters, etc). There has to be a way to quickly and cheaply apply diamond-coating. This is one possible direction of his research.

But he couldn't pursue this. Why? If you look at the metal industry of the country, knifes and metal works are still done by hand using technology developed generations ago. With this scenario, Dr. Ramos wouldn't be able to use his technology to improve the quality of local knives because the local metal industry is not yet ready for his discovery. There should be people willing to first develop the metal industry in the country.

This should be something that the government must act upon but Scientists and Engineers could accelerate the process. They must do work on 'appropriate technology' at least on a part time basis to enable the development of support technologies and support industries for their high-end researches. Otherwise, there researches will just be castles in the sky without foundations.

Working on mid-level technologies will give technology developers a realistic view of the prerequisites of technology commercialization. Usually, the more complex the technology, the more difficult it is to commercialize. By doing 'appropriate technology' work, the will be able to participate in the commercialization of product. It is so much easier to manufacture and sell a 'new, improved and revolutionary' cooking stove that it is to sell a 3-Dimensional Holographic Storage media. However, the steps in R&D and commercialization of the 'new' stove and the 'new' storage media are similar. Instead of learning commercialization in books, they should try developing and commercializing a simpler technology just to learn the ropes in conceptualizing the product, developing a manufacturing system, a marketing plan and looking for financial support. The know-how and experience they will gain will give them momentum in commercializing their actual researches in the future.

Another offshoot of this strategy is that scientist/engineer (now considered an inventor) will gain money from successfully commercialization of one product. He will earn from it. This financial gain becomes extra money that could then be use to finance bigger commercialization projects. Little by little, through appropriate technology, we will gain the capability to go in bigger, more ambitious endeavors.

i-ARC System Integrators

i-ARC System Integrators (http//i-arcsys.blogspot.com) is a company that follows this strategy. Rodec, an Instrumentation Physics graduate, together with his partners, Danilo Rey,an Industrial Automation expert, and Edwin Allas , an IT Professional, proves that using overskilled engineers to develop products produces amazing results. Together they prove the power of knowledge management and networking. Working with limited financial capital, they were able to produce several products quickly at minimal R&D cost using a network of knowledge workers.

Below is a picture of an Automated Barrier they have developed. We have learned that there are locally manufacture Automated Barrier. Most of barriers cames from Italy and it cost around P80,000 each. We believe that we can design our own barrier at a much less cost.

It might not seem much but the clients is very please with this barrier. Especially since its been seven years since it was installed and its still working perfectly. But the really special thing about this barrier is this.. it took us two weeks to develop it. This is the reason why we jokingly call our rapid product development methodology as the " two weeks is a long time" methodology.

Besides the automated barrier, there are numerous other equipment that are extensively use by local industries that has no local manufacturer. An example industry is in healthcare raising the cost of setting up properly equiped hospital laboratory. We helped Jobwell Medical Equipments ( http://i-arcsys.blogspot.com/2008/08/jobwell-medical-equipment.html) to develop their line of locally manufactured medical equipments. Other opportunities abound in numerous other local industries. We just have to open our eyes to see them and take the effort to fill the gaps.

Tasyo Catch-Up Strategy

2008-08-05T05:25:00.000-07:00

Tinanong ni Crisostomo Ibarra si Pilosopong Tasyo kung dapat na nga bang mag-aklas ang mga Pilipino laban sa mga Kastila. Sabi ni Pilosopong Tasyo, "Wag muna. Hindi sapat ang ating kakayahan. Kapag lumaban tayo ngayon, maraming mamatay."

Ang tanong ngayon, dapat na bang makipag-sabayan ang mga Filipino companies sa global market? Sabi namin dito sa Tasyo, "Wag muna. Dapat natin palakasin ang ating lokal na industriya at mga lokal na teknoprenur dahil ito ang magsusuporta sa ng lalaban sa global na pamilihan."

We cannot yet develop high-technology companies producing high-techlogy products that could compete in the global economy. Although there are islands of technical and scientific excellence, the technological and economic environment could not support and sustain one company rising above a depressed economy. A concerted effort by the government, academe and industry would not be enough. Money is just one of the problems. Other problems includes:

Lack of support industries
Lack of local market
Technological inferiority of Philippine industries

To enable technology catch-up, we can't start with high-tech products immediately; we need to pass through intermediate stages that will prepare us for the big fights ahead.

The Turtle vs. the Rabbit

In the story of the turtle vs the rabbit, the turtle was able to beat the rabbit through perseverance in maintaining a steady pace. The rabbit lost because he procrastinate.

In the race for economic development the Philippines is a Turtle compared to other countries. Our problem is, perseverance would not be enough against the bigger, faster, stronger and more aggressive Rabbits. Could the Philippine Turtle win? Never. Not unless we understand the concept of Acceleration.

Acceleration is defined in Physics as the rate of change of velocity over time. Given two objects, Object A and B. Even if Object A is farther ahead and much faster than Object B, if Object B is accelerating faster, Object B will eventually overtake Object A. It is our idea for our Catch-up Strategy. It is now about immediately running as fast as the opponent, rather a process of 'Accelerating' faster.

In terms of economic development, it is about producing more enterprises, producing more products, producing more services, producing more profits in an ever shorter time frame. The Tasyo Strategy is not about Speed rather it about Acceleration. We are now moving slowly. But that is ok. We are way behind in technology and infrastructure. But that's ok. We just have to concentrate on how to move faster. The set of strategy we are proposing might seem counter-intuitive because if has some components that is arguably a step backwards. But the reason for this is to enable acceleration. By using overqualified resources, we can move faster. We could build better products faster and build companies to manufacture and market them. This will build momentum for our economic growth and it will drive our goal to accelerate faster, catch-up and leave them behind.

Technopreneurs' Portal

2008-08-02T21:08:00.000-07:00

We would like to develop an Internet Portal to link scientist and engineers to entrepreneurs and SMEs. The Philippine S&T community is poor due to the relatively low scientists-to-population ratio. However, there are exceptional Filipino scientists and engineers but they are hidden in research laboratories both in the Philippines and abroad. This project aims to identify those scientists and engineers and to seek their help in developing Local Companies and Industries.

The project will have three main components: a network of technology developers, a network of technology user and a system to bridge them and sustain the transfer of technology.

The network of technology developers consist of mostly scientists, engineers and technology managers from the University of the Philippines, Diliman, Quezon City, Philippines which is the premier university of country. Other experts and scientist in industry, both here and abroad, will supplement this pool of experts.

The network of technology users is composed of local companies, industries and Non-Government Organizations.

The Technopreneurs’ Portal aims to bridge the knowledge gap between the technology developers and the technology users. Being a public portal, it will let technology users know that there are many technologies being developed in local R&D institutions and there are many scientist and engineers doing and is capable to world-class research. It will also be a venue for letting technologists know that the industrial sectors has many technology needs that they could address.

Using Knowledge Networks

2008-08-02T20:37:00.000-07:00

Another foundation of the technopreneurial revolution is the development of a SME Knowledge Clearinghouse. Guerrilla-style entrepreneurship is about leveraging on knowledge capital. However, ordinary entrepreneurs could not do a systematic and extensive search of the knowledge resource and support companies available to him.

There is a need to collate the different capabilities and achievements of R&D institutions to spur collaborative research. And to support this R&D network, a network covering all stages of the innovation chain from technology developers to prototype development support to financial, marketing and management assistance must be identified. But this is not enough. This organization must be composed of leaders and aspiring entrepreneurs who will:
1. Establish linkages with different groups and organizations towards the promotion and establishment of technology-based enterprises in the Philippines;
2. Be responsible for the creation and updating of a knowledge database that will cover the whole line of the innovation process from conceptualization to invention to exploitation;
3. Study, analyze and clarify linkage mechanisms between entrepreneurs and technology developers, manufacturing and marketing firms, and financial and investment sources; and
4. Conduct industry and market studies to identify and push business opportunities to industry players.

This is similar to the concept of Dr. Serafin Talisayon (Technology Management Center) of a Technology Clearinghouse that will link the technology producers and the technology buyers. Among the other services the technology clearinghouse can provide are the following:
· Taxonomy of technical products and services to allow classification, identification and matching of specific needs to specific suppliers;
· A set of updated directories for various technical fields;
· An assisted matching service, for buyers looking for sellers or vice-versa, or for companies looking for distributors, franchisees or strategic partners.

One possible evolution of the SME knowledge clearinghouse is to become a virtual technology business incubator which is a private entity engaged in the business of selling the complete range of business support facilities and services necessary to assist small enterprises to become viable, especially assistance in product and market development. This will complement the typical business incubator model that provides office space and financial assistance

Re-Thinking Organization and Management

2008-08-02T20:35:00.000-07:00

The basis of wealth creation has changed. There was a time when wealth was measured in terms of natural resources. During the industrial age, wealth was measured in terms of production capability. Now, we are in the knowledge economy. The basis of wealth creation is the proper use of knowledge and information. During the last decade, there have been debates on whether the Philippines will enter the knowledge economy or not. Actually, it is not a choice. It is a global phenomenon, which is part of the evolution of the economic system of man. We are in the knowledge age and we should re-think our way of management as dictated by change.

Sharpening of the business competitive edge rests to a large extent on the ability of the enterprise to constantly monitor the macro-environment, identify opportunities for growth and constantly re-engineered its business processes to face new challenges. In large enterprises, they have a Corporate Planning division that guides them in their growth. Filipino SMEs do not have this luxury. However, if they are to re-live the life of Sony, Apple, Microsoft and Toyota that started from a garage office to global prominence, resources to analyze and develop business strategies suited for the concrete capabilities and limitations of Filipino entrepreneurs must be made available to them.

The cost of maintaining a department that will conduct regular industry studies and market analysis would be too high for a single local SME. However, it is possible to form a non-stock, non-profit organization that will perform that task not just for one entity but also for Filipino SMEs in general.

This will not be easy. We have to analyze the current and past basic management practices and integrate new management theories such as technology management, total quality management and knowledge management. Technology Management espouses the concept that the proper management of technology is the key to competitiveness and wealth creation of enterprises. Total Quality Management dictates that quality is the key. Knowledge Management dictates that the proper management of knowledge is the key. Actually, they are all different aspects of competitiveness and the entrepreneur has to be able to properly incorporate them in his current operations to enable his company to become competitive.

Filipino entrepreneurs understand the importance of integrating these concepts into their business model for them to grow and become globally competitive. However, they do not have the luxury of implementing them the traditional way. They can’t spare resources in hiring technology managers and knowledge managers. They would also like to take seminars or graduate courses on the said topics but their needs are immediate. Their company might collapse during the six months to a few years they would need to finish a graduate degree. We need to help them – NOW! We must develop these new management styles not as an academic exercise but through close interaction with SMEs as we deal with the opportunities and limitation they encounter.

Philippine Silicon Valley

2008-08-02T20:31:00.000-07:00

Silicon Valley was said to have started with the engineering and scientific expertise from Stanford University. That is true. However, this technical expertise is not what differentiated it from other centers of technical excellence like MIT. What really gave birth to Silicon Valley is an idea and a concept. What fueled its astronomical growth, in contrast to other centers of technical excellence in the US, was that it created an impression of being the 'Greatest Legal Way of Making Money in the World'. This is the Silicon Valley Dream.

It started when Frederick Terman lent his students, William Hewitt and David Packard, Five Hundred Dollars to start their company. Within several years, Hewlett-Packard was able to earn several million dollars making its founders and Terman very rich. HP, as Hewlett-Packard is now known, is a multi-billion dollar company with branches all around the world. The formula of “Technology + Business Savvy + Financing = BIG $$$!” quickly became accepted. This lure for quick profits fueled the growth of more technical know-how, management savvy and venture capitalist. Thus came Fairchild, Intel, Apple Computers, Cisco and Oracle. These companies became legends followed and emulated by a generation of Americans. These are the Yahoo!, Google and Amazon of today.

If we are to re-create a ‘Silicon Valley’ in the Philippines, beyond awards and incentives for entrepreneurs, we should strive to make engineers, scientists, investors and entrepreneurs believe that they could also generate BIG $$$ in the Philippines. We have to make them believe that the ‘Silicon Valley’ dream is possible in the Philippines.

This is not impossible. The Philippines in general is not known to be a technologically advanced country. However, there are oasis of scientific and technical excellence. The Diliman-Katipunan area containing the University of the Philippines , the Ateneo de Manila University and several research institutes of the Department of Science and Technology. Within this area covering almost 1000 hectares are the National Institutes of Physics (NIP) , National Institute of Chemistry, UP College of Science , UP College of Engineering , Advanced Science and Technology Institute (ASTI) and Philippine Nuclear Research Institute (PNRI). Check out their websites for interesting researches. [note: I'm from UP and DOST and the I know of their research institutes. I'm not familiar with the colleges and research institutes of Ateneo but i do know that they have very good physics, mathematics and entrepreneurship departments. If you have additional info, please write it as a comment.]

With this technological capability, a Philippine Silicon Valley is possible and there are groups pushing for it as early as late 1990's. The Katipunan Forum (katipunanforum@yahoogroups.com) is one such group. It is a virtual group of Filipino scientists, engineers and investors both here and abroad that aims to establish a “Silicon Valley”-like environment along Katipunan Avenue to tap the technology and business potential of the University of the Philippines and the Ateneo de Manila University. They aim to promote technology-based entrepreneurship by linking the capabilities found in the universities and bridging the limitations of Filipino entrepreneur through a network of technology and business experts here and abroad. The UP Technology Management Center and the Technology Business Incubator is also there. The Pilosopong Tasyo Technopreneurs Multipurpose Cooperative is also one such group. Unfortunately, good researches still can't find their way to industrial applications, some venture capitalist goes out of business for lack of technopreneur clients and local industry still rely heavily on imported equipment and technologies.

" If you built castles in the sky ; your work need not be lost ; that is where they should be. Now, put the foundations under them. "

-- Henry David Thoreau

The Alternative Catch-up Strategy in this website proposes one possible approach how to build the foundations of the Philippine Silicon Valley.

The 'Trickling' Revolution

2008-08-01T18:32:00.000-07:00

When the Philippines was under the rule of the Spaniards, a group of progressive-minded Filipinos started the Propaganda Movement. They dream of a better life for Filipinos and planted the seed for the Philippine Revolution of 1898. Just like they did, we are now planting the seed today for a new revolution.

The concept of this Blog is to plant ideas for a Technopreneurial Revolution. It is not an 'armed' revolution. Rather, it is economic in nature. The participant doesn't revolve around soldiers but on 'technopreneurs'.

The road to national development is a dream we strive for but may never reach. We are little and so few and could hardly make a dent in the economic landscape. But like raindrops, so soft and calm, we will drop from the sky and tear loose a grain of soil. Eventually, we will find ourselves together into a brook, this brook will join a stream, and streams join to form a river. This river will be great and mighty and cut a path across the land.

As the river starts with a raindrop, the technopreneurial revolution will start with individuals willing to fall and tear loose a grain of soil. It starts with the growth of individuals, willing to try, ready to fail and determined to succeed. These are the trickles of the revolution. There are social, cultural, economic and historical reasons against the formation of technology-based enterprises in the Philippines in general. But driven individuals are much sturdier and more persistent.

There is nothing more powerful than an idea whose time has come.

-- Victor Hugo

Could they stop engineers from attending management seminars and reading management books? Could they stop businessmen from seeking out good engineers for possible partnership arrangements? Could society prevent the flow of technology and wisdom from the Internet to those willing to learn and grow?

The formation of brooks and streams does not happen by chance. These raindrops, wherever they may fall, follow the same path. Millions and billions of raindrops continuously flow downwards where they meet and converge. Individual growth is random and could never be controlled. But we must lay down the directions and vision for the formation of streams and rivers that will flood the barren economic landscape. This vision and direction is what we call The Foundations of the Filipino Technopreneurial Revolution!

Under Developed Rich Natural Resources

2008-07-31T06:39:00.000-07:00

When you're at Metro Manila, it is difficult to see the rich natural resources of the Philippines. So many people, buildings, factories and houses. It is very rare that we see a vacant lot much more an open space. This is further strengthen when you go outside either north or south. On the north, you will see endless rice fields because it leads to Central Luzon, the main Rice Producing Region of the Philippines. On the south, are large manufacturing facilities of Calabarzon, the CAvite, Laguna, Batangas and Quezon Special Economic Zone. Two to three hours away by car, it would seem that land is well used and there are few unutilized space. But that is because you're passing through the main roads where most of the development is centered.

However, if you take a plane, you'll see the large undeveloped areas of the Philippines. There are cities, residential, commercial and industrial areas but they cover not more than 10% of the land. Further away, in the islands of Visayas and the Mountains of Luzon, this percentage goes down to less than 5% of the land area. For all our economic crisis and problems, we could possible be using less than 25% of our natural resources.

If we could increase this resource utilization by just 10%, we could increase our economy by almost 50%. But this doesn't happen because these natural resources are in the rural areas. This is the reason why we need to refocus our economic activities away from urban centers. It is not just to get away from the crowd and the pollution, our true wealth is in the rural areas and we are not utilizing it.

Linked In

If you have other ideas on untapped Filipino natural resources and want to or have ideas how to fully utilize them, please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's LINKED IN..

Overseas Filipino Workers (OFWs)

2008-07-31T06:38:00.000-07:00

It is a sad fact that skilled Filipinos have to work abroad to earn a decent living. There used to be an issue that these Filipinos are not nationalistic because they choose to serve abroad instead of practicing their professions in the country. But as time goes by, these so called unnationalistic professionals became the life blood of our economy. The strength or the weakness of our country is dependent on the amount of remittances from these OFWs. Now, we hail them as heroes. Braving loneliness, cold, heat and a life as second-class citizens in a country not their own, they have rejuvenated the economy.

But their economic potential is actual more than the dollars they send. It is much much more. Most of them are skilled professionals -- engineers, accountants, health practitioners. They are a source of capital for new businesses. But besides that, their greatest strength is that they are in a foreign land with a culture and way of life much different from it is here. They are at the perfect opportunity to see good ideas from where they are working and bring it to the Philippines or take good ideas from the Philippines and take it to their place of work. This is what the Chinese did generations ago when they brought the 'taho' and pancit to the Filipinos. Our OFWs can also emulate their examples.

One option is the One-Town-One-Product (OTOP) initiative of the Department of Trade and Industry. Under this program, each town or municipality chooses a particular product that they will produce and it will serve as a trademark of that town. An example would be the Wood Carvings from Paete, Laguna. It has been ongoing for the past several years and there is an improvement in the quality and quantity of their products. But their problem is their limited marketing capability. Mang Ambo is a woodcarver from Laguna is an expert at woodcarving. He may know how to entertain a customer that walks into his shop but it is doubtful if he knows how to sell his products outside of his town, much more, outside the Philippines. However, Ms Elvira Sarmiento, is a nurse from Paete, Laguna working at a London hospital. She doesn't know it but she is at a very good position to offer Londoners equisite woodcarving from master craftsmen from his hometown. She doesn't even have to do it full-time, she could just visit a furniture shop one weekend and show pictures of woodcarvings from her home town. If the shop owner is interested, she could contact Mang Ambo and tell him about the opportunity to export his products to the UK.

Another example is Mrs. Emily Alonzo. She is a native of Unisan, Quezon but has migrated to the United States. Saddened by the lack of progress in her home town, she tries to find ways to help them. One of the ways she does it by marketing Virgin Coconut Oil (VCO) in the United States through her network of Filipino immigrants.

A few months before meeting Mrs. Alonzo, I met Mr. Coconut Person (can't remember his name) from Indang, Cavite at a SME Networking Seminar. He is a retired employee of the Philippine Coconut Authority (PHILCOA) and is now producing Virgin Coconut Oil. Cavite is not known to be a coconut producing province but there are some municipalities that has numerous coconut trees. He wants to organize the coconut farmers in neighboring barangays there to produce virgin coconut oil instead of buko (fresh coconut meat). He has the technology and an order for several thousand liters Virgin Coconut Oil per month for export to the United States. With this, he was able to convince several coconut farmers he met during the seminar to organize into a VCO producing cluster. The VCO production system he discussed was interesting but real clincher that was that he already has an order from abroad that needs to be fulfilled. I was pleasantly surprised to later learn that the VCO order he got was from Mrs. Alonzo.

This example could be replicated in all products in all the towns. OFWs should just start realizing their marketing potentials and we should do, too.

Linked In

We are looking for Overseas Filipinos, individual or group, willing to participate in the technopreneurial revolution. Better if you have a regional group already (ex. Batangueno Association of North America, Manila Science Alumni Association - US Chapter, etc. ) or if you have a town or product you wish to develop or promote. Please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's LINKED IN..

Non-traditional SME support network

2008-07-31T06:36:00.001-07:00

Most local companies complain that it is difficult to do business in the Philippines due to the scarce production capability available locally. That is not true. The Philippine economy is in bad shape due to the unstable political and economic situation. Business is not good. Many factories and shops are producing much less than their rated capacities. This means that there is a lot of unused capacity in companies everywhere.

Many businesses in the country are service companies such as machine shops and automotive repair shops. Because of the passive nature of their business (they are dependent on the needs of either entities up-stream or down-stream the supply chain), they usually do not perform at peak capacity. Most of them only have business fifty percent of the time; others are only busy twenty percent of the time. The unused capacity is already accepted as industry norms and is factored in as part of the cost of doing business and written-off as excess capacity. Local companies could tap this excess in order to boost their manufacturing capability.

Another interesting production model popular in the Philippines is the cottage-industry model. This is commonly applied in the handicraft business. Just as there is a lot of unused capacity in micro-enterprises, there is also untapped production potential within the common household – housewives, elderly, small children and the unemployed workforce. Handicraft manufacturers give free training to these people on how to make a particular item. The manufacturers then deliver the raw materials to their homes at the start of the week and pick up the finish goods at the end of the week. Payment is on a per finished item basis and there are weekly production quotas.

Technology industries in the Philippines have yet to tap this production system. However, in China, unofficial sources narrate of villages that produce fake Sony video cameras. Villagers were given basic training in electronics such as components identification and soldering. Components are shipped in from Taiwan, assembled there and then brought to appliance stores all over the world. The amazing thing about this system is that the quality of their equipment is comparable to those made by Sony of Japan. This story may or may not be true. However, if you think about it, a high-tech cottage industry is indeed possible.

Linked In

If you have other innovative ideas that could help the Technopreneurial Revolution, please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's LINKED IN..

Under-utilized Government Programs

2008-07-31T06:34:00.002-07:00

Many entrepreneurs, especially in the provinces, complain of lack of assistance from the government. Fortunately, it has already been realized by the current administration and they prioritized the establishments of systems and programs to help Filipino SMEs. One significant improvement is the coordination of the Department of Trade and Industry(DTI) with the Department of Science and Technology (DOST) that aims to bridge the gap between business and technology. May SME Development Agenda sila dun that provides comprehensive assistance to SMEs.

However, although a large fund is set aside for SMEs, it is not enough to cover the whole Philippines and all SMEs. They could only serve a small percentage and they are selective in giving out funds. It is government money so they try to select those with the best chance of success and those projects that benefits the most number of people. And of course, they do give preference to entrepreneurs who contacts them directly. And since most of their offices are in Metro Manila, entrepreneurs in Metro Manila finds it much easier to contact them than those from the provinces.

How can entrepreneurs from rural areas improve their chances of availing these government programs?

1. Use the Internet. Most government agency already has websites. Try to contact them using e-mail but also get their telephone number. We think the telephone is still the best medium for long distance communication because you get instant response.

2. There are numerous government program. Avail of as many of them as you can. There are popular program with many applicants and some are under utilized.

One under-utilized government incentive is the assistance to inventors. The Technology Application and Promotion Institute (TAPI)[1] of the Department of Science and Technology (DOST) provides financial assistance, tax incentives and management consultancy to inventors defined as a holder of a Philippine Patent. Republic Act 7459 provides assistance to investors.

This assistance includes availability of financing for prototype development and technology acquisition, technology promotion and enterprise development. A lot of engineers may find it impressive to become an inventor; however, a visit to the Philippine Patent Office will show the Philippines still has a long way to go in terms of quality and quantity of patentable ideas. They will be surprised to know that patent ideas are not necessarily high-tech and their contributions are needed to boost the Intellectual Property capital of the country. Every business must ensure that they have a competitive edge by having at least one patent. This patent is a vital marketing tool and would give the entrepreneur access to funds, incentives and assistances available to inventors.

Another program is the “Barangay Micro Business Enterprises Act of 2002”, which provides incentives to micro enterprises. It provides Credit Availability, Technology Transfer, Production and Management Training, and Marketing Assistance and tax incentives to businesses with assets of less than Three Million Pesos. This is a requirement easily fulfilled by start-ups.

3. Try to form an industry group. Although most of the funds are focused on individual enterprises, many government agencies prefer to deal with industry associations rather than individuals. It would also be better if they could get the indorsement of officials of their Local Government Unit (LGU).

Linked In

There are numerous other government programs and institutions that aims to help Filipino SMEs and contribute to the Technopreneurial Revolution. If you are part of such organizaton, please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's populate this page with SME support programs. Let's LINKED IN..

_____________
[1] http://www.tapi.dost.gov.ph, Technology Applications and Promotions Institute Website

Untapped Financial Resources

2008-07-31T06:34:00.001-07:00

The common complaint of Filipino entrepreneurs is the lack of access to capital. But unlike Mang Ambo at the time of our grandparents, entrepreneurs today have broader sources of capital besides friends, relatives and banks. A substantial list of funding institutions could be found at http://www.dti.gov.ph/SME.php. It has a 129 page document on financing programs for Small- and Medium-scale Enterprises (SMEs). No, lack of sources of capital is not a problem in the Philippines.

However, the lack of capability in making a viable business plan and an excellent marketing strategy is the downfall of SMEs. This is the purpose of this blog. To let Filipino entrepreneurs become technopreneurs. To harness the talents of Filipino scientists and engineers into developing products and companies with 'unfair' sustainable business advantages. If they have this unfair' advantage, financing will come much easier. Beyond traditional sources of capital, they could even approach venture capitalist.

Enterprise creation is a process of wealth creation. Gold, once found, starts a gold rush not limited to miners. People from all walks of life like office clerks, market vendors, and even engineers and businessmen will join the rush. Apart from the traditional lending sources, if the business plan is really good and gold could be “mined”, other non-formal lending institutions and individuals will jump in to give their support if they see the opportunity for large profits. The goal of the Technopreneurial Revolution is to realize the vast untapped wealth of the Philippines and Filipinos.

Linked In

We are looking for Filipinos Investors, Venture Capitalist, or Funding Institution willing to participate in the Technopreneurial Revolution. Please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's LINKED IN..

Pinoy Scientists and Engineers

2008-07-30T20:38:00.000-07:00

The Philippine S&T landscape is barren with few oasis of technical and scientific excellence. Filipinos are not known as world-class researchers but there are some places where ‘world-class R&D’ is the norm.

At the National Institute of Physics in UP Diliman, researches in laser technology, plasma matter and semiconductor physics have been ongoing for several decades now. Robotics and artificial intelligence research are being conducted by the Department of Electrical Engineering. The Advanced Science and Technology Institute (ASTI) of the Department of Science and Technology (DOST) are designing microchips and open-source software. These technologies are available to local SMEs. Any businessman or small entrepreneur could visit them and discuss options of technology commercialization.

But the opportunities do not end there. There are many low- and medium-technology inputs needed by small enterprises that could easily be solved by these technologists. The physicist doing material science research on advanced materials could probably come up with several innovative solutions to the problem of food packaging and preservation. The robotics engineers and microchip designers could then develop specialized machines that will implement the solutions proposed by the physicist into something that could be integrated in the assembly line of food manufacturers. Aside from food processing, there are many other opportunities in other cross-sectoral areas such as the agriculture and textile industry. Besides the physicist and engineers, there are also chemists, biologists and other technologists and scientists that are willing to help entrepreneurs, willing to contribute to economic development.

Asking Help from Filipino Scientists and Engineers

UP Diliman used to have volunteer program called Pahinungod. One of the projects under that program sends volunteers to remote barangays and offers tutorial programs to high school students who are going to take the UPCAT (UP College Admission Test). The surprising thing about this is that a lot of my batchmates (MS Physics, MS Materials Science Engineering grad students at that time) participated. They spent two weeks teaching kids. It was a fulfilling activity. They were able to help kids and had fun at the same time.

The spirit of voluntarism is still alive. But instead of just undergraduate students, the volunteers are masteral student doing cutting-edge research. Had they been asked, these same group of volunteers could solve technology issues in remote barangays. But they tricky part here is to carefully plan the development process within the two weeks semestral break. Otherwise, they find it difficult to fit the extra activity between work/teaching, studies and research work.

How do you contact them?

1. The traditional way is to visit them at their laboratory. Check major universities if they have science programs (biology, chemistry, physics, etc). Inquire where the specific department is located, visit them, introduce yourself and your purpose. They may be nerds but are humans, too. Don't be surprise if they look like ordinary persons. They actually are. Some are nice, too.
2. Ask a friend studying at a university if he knows anyone from a particular science program or someone who knows someone or someone who knows someone who knows someone, etc. Eventually, you'll be able to get a contact number (even a cell number) of a scientist.
3. Go to an internet cafe, look up http://www.up.edu.ph or http://www.admu.edu.ph or http://www.dlsu.edu.ph or the website of the university near you or try the Department of Science and Technology Website (http://www.dost.gov.ph). Click the link to the College of Science and a specific department. E-mails and phone numbers are usually there. Drop them a call or e-mail them a friendly message.

It might be a bit overwhelming if you ask them to help grow your business right away. Take the time to get to know them. If you need technical advice, try to be as specific as possible. They usually are quite busy. For example, instead of asking them how to improve farm production, be specific on the type of crop and a particular problem you have in growing it. Try to invite them to visit your area/farm/shop so they could see the problem themselves.

If in the course of discussion, you see that the scientists can help you with your problem and he is willing to help, you don't need to hire him for the job and pull him out of the university. The "Rapid Product Development" write up is one way of getting their help.

Linked In

We are looking for Filipino scientists and engineers, individual or group, willing to participate in the Technopreneurial Revolution. Please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's LINKED IN..

Untapped Potential

2008-07-30T18:40:00.000-07:00

"A poor man is someone who doesn't know he is rich."

- Pilosopong Rodec

One of the main problem of Filipino entrepreneurs is sourcing capital. However, beyond capital resources, the Philippines has numerous resources for enterprise development that are underdeveloped and remains untapped.

There was a time when Mang Ambo has to walk for several hours to be able to ask help from Don Juan who lends at exhorbitant rates. He really wanted to ask Don Victor, who is a close friend, but he lives in Manila which is more than a days walk from Batangas. At the time of our Lolo and Lola's roads are unpaved and transportation is difficult.

Today, Batangas is a little more than an hour away via the South Express Way. If there was cellular phone then, Mang Ambo could just 'text' Don Victor so he could send money via LBC or even Smart Pasa Load. Actually, distance is almost irrelevant in the Internet era. Even if Don Victor was in Saudi or Europe, Mang Ambo can still contact him.

This is the power given to us by advances in transportation and communication technologies. This is the power made available to everyone in the Information Age. Distance is not longer a factor to able to contact and communicate. With this, the resources available to Mang Ambo or a Filipino Entrepreneur is not limited by distance.

This new economic age has opened up opportunities previously not available to entrepreneurs looking to start or expand their business. These are:
1. Filipino Scientists and Engineers working at Universities in Metro Manila or studying/working abroad;
2. Financial Resources from banks, funding institutions here and abroad;
3. Government Agencies in Metro Manila;
4. Natural Resources in provinces from Northern Luzon to Southern Mindanao; and
5. Overseas Filipino Workers (OFWs) and Pinoy Immigrants;

Be Innovative!!!

2008-07-26T19:55:00.002-07:00

I was Googling for an image to put on this page when I came across the image above with a very interesting quote:

"Dumating ang mga Pilipino, pana at sibat lang ang sandata."

In the face of global competition, based on how far ahead in terms of technology and resources other players are, Filipino technopreneurs could be said to just be carrying pana at sibat. Should we just retreat? The problem is the fight is not on foreign soil, it is already at our own backyard, in our sidewalks, in our malls. It's either we take a stand now or risk waking up one day with local industries almost dead.

But how do we fight? The strength of small groups is agility and creativity. We must look for gaps and weaknesses and move quickly. Attacking the enemy at directions they wouldn't expect. Using strategies they never thought of.

Traditional rules will give traditional results. We cannot compete in the game that ‘Big’ players play with the same rules they use. We must play “A Different Game”.

Taking Advantage of Under-utilized Resources

Most local companies complain that it is difficult to do business in the Philippines due to the scarce production capability available locally. That is not true if you look at problems from a different point of view.

At i-ARC (http://i-arcsys.blogspot.com), we were able to design an automated barrier for use in controlling access to parking lots and toll stations at expressways. Like many other Filipino inventors, the next problem we faced was manufacturing. We have a product but how do we mass produce it? The traditional approach was to setup a factory but that would entail large capital investments which we don't have. So we tried finding an alternative solution.

We have observed that many businesses in Valenzuela City (where I use to live) are service companies such as machine shops and automotive repair shops. Because of the passive nature of their business (they usually just wait for customers to approach them), they usually do not perform at peak capacity. Most of them only have business fifty percent of the time; others are only busy twenty percent of the time. The unused capacity is already accepted as industry norms and is factored in as part of the cost of doing business and written-off as excess capacity. We have considered organizing a network of machine shops in Valenzuela and we saw it's potential as a massive manufacturing force.

Another interesting production model popular in the Philippines that we considered is the cottage-industry model. This is commonly applied in the handicraft business. Just as there is a lot of unused capacity in micro-enterprises, there is also untapped production potential within the common household – housewives, elderly, small children and the unemployed workforce.

Handicraft manufacturers give free training to these people on how to make a particular item. The manufacturers then deliver the raw materials to their homes at the start of the week and pick up the finish goods at the end of the week. Payment is on a per finished item basis and there are weekly production quotas.

Given the proper training and equipment, these housewives manufacturing handicrafts can be made to assemble circuit boards. They can do it on their spare time after house chores or when the children are sleeping.

Technology industries in the Philippines have yet to tap this production system. However, in China, unofficial sources narrate of villages that produce fake Sony video cameras. Villagers were given basic training in electronics such as components identification and soldering. Components are shipped in from Taiwan, assembled there and then brought to appliance stores all over the world. The amazing thing about this system is that the quality of their equipment is comparable to those made by Sony of Japan. This story may or may not be true. However, if you think about it, a high-tech cottage industry is indeed possible.

Linked In

If you have other innovative ideas that could help the Technopreneurial Revolution, please contact Rodec through LinkedIn, http://www.linkedin.com/in/rodec. Let's LINKED IN..

Use Indigenous Resources and Local Talents

2008-07-26T19:55:00.001-07:00

During the Japanese occupation, Filipino guerilla's was out numbered, out-gunned and had minimal communication with their mother units in the US Armed Forces. But they were able to stay alive because they lived off the land.

They learned it from experts on jungle survival -- the Aetas of Mt. Pinatubo. With nothing but knives and crude tools, Aetas can build tent-type animal snares, start a fire, cook rice using split bamboo and eat food on leaves! They know what plants and animals are poisonous or not. Armed with this knowledge, Guerilla's was able to survive despite being surrounded by enemies and having minimal provisions. To the untrained, the jungle is an enemy where one could die of hunger, thirst, cold and wild animals. But with the proper training, it becomes a shelter and a source of food.

Similarly, guerilla technopreneurs must also learn how to thrive off the land, use indigenous resources and local talents. There are numerous untapped resources for the Filipino entrepreneur but he has yet to start learning how to utilize them. Trapped in our ignorance, we unknowingly ignored them while we slow die from competition brought about by globalization.

At i-ARC (http://i-arcsys.blogspot.com), we were able to develop innovative products using a virtual network of scientists and engineers. Actually, i know a lot of engineers and scientists from UP Diliman having studied/worked/loitered there for more than 10 years. Although it is easier for me to approach them, i'm sure they would also be willing to help other entrepreneurs if approached properly.

Seek to Form Partnerships and Alliances

2008-07-26T19:54:00.001-07:00

Guerilla have limited resources. The work best by being small and agile. But most of the time the availability or unavailability of certain resources means the difference between winning or losing a battle. You cannot cross a chasm in small steps, you have to leap. If a guerilla unit cannot make a big enough attack on their own, they must seek the assistance of other units by forming partnerships and alliances.

Big companies form partnerships and alliances to enable them to expand and gain competitiveness. They call it “vertical” and “horizontal” integration of the supply chain or simply supply chain management.

The Taiwanese industrial cluster[1] started with the influx of Multinational Companies (MNCs) in Taiwan as a manufacturing base. Small companies then formed around these MNCs delivering raw materials and services. As these small companies prosper, as they increase their quality and profitability, they grow large enough to require the service of newer, smaller firms to supply them with raw materials and services. Thus, today, the network of electronics and computer peripherals in Taiwan is the largest in the world.

The Taiwan model, which is a big company surrounded by small companies, is one way of developing industrial clusters. Another way is for a small company to actively search and network with other companies for them to complete the innovation chain. In this case, one company that is strong in product development doesn’t necessarily have their own manufacturing and marketing division. Besides the bigger capital requirement, they may find it difficult to be good at everything. It is possible for them to identify partner companies that specialize in manufacturing the particular product they’ve developed. This partner firm could then concentrate on optimizing their manufacturing processes while the original firm could concentrate of product development – their respective strengths. Other enterprise functions such as marketing, distribution and sales could be approached in the same manner. This way, the innovation chain is completed, the strength of each is fully utilized and an alliance of individually cooperating companies is formed.

This is the guiding principle for the Rapid Enterprise Development concept. With this, Filipino SMEs, just like their guerilla counterparts, can become small and agile most of the time. But in times of need, they can be big and strong through their network of allies and partners.

Look for Battles They Can Win

2008-07-26T19:53:00.000-07:00

The most important thing to win any battle is knowing how to properly assess the situation -- your strength and capability, the strength and capability of your enemy and the environment of the battle field. With this knowledge, guerillas gauge whether they could win a battle or not. Given their limited resources, they cannot afford to loose valuable resources by engaging in difficult battles. They must look for weaknesses in their enemy's defenses and start their attack from there. Otherwise, they must retreat and wait for another opportunity to arrive. This is the first rule of Guerilla Warfare: Look for Battles you can win.

A small company with small resources could not compete in a market dominated by large players. A seed in the forest will only grow if it is able to find its place in the sun. Filipino SMEs must choose their battles carefully. It is not enough to find a market opportunity. They must gauge their capabilities and plan their strategy is such a way that it is possible for them to win. It doesn't even have to be a big victory. Many small victories also counts. If they can’t be sure of winning, they have to look for other battles. Exploit other weaknesses. Wait for the right opportunity.

Can a Jeepney win against a Ferrari?

Of course not. The jeepney is just a decorated version of the World War II Jeep used by the American soldiers. However, the Ferrari is known to be designed by one of the best team of car designers in Europe using cutting-edge automotive technology. It can easily go from 0 to 200 kph in approximately 10 seconds while the jeepney has a top speed of less than 120 kph. It is a hands down winner.

That is if it is a straight race in a well-paved road. However, if it is a race from Baguio to Sagada along rough and muddy mountain roads. The jeepney might win. The ferrari might not even be able to finish the race.

This is anecdote between the jeepney and the ferrari illustrates what Filipino SMEs should do in order to compete with bigger multinational companies. They just have to "select battles they could win."

Guerilla Technopreneurship

2008-07-26T19:47:00.000-07:00

We are at war.

Historically, one of the few times that small group of Filipinos has been successful against large odds was during the Japanese occupation. Philippine soldiers who avoided capture in the fall of Bataan and Corregidor formed guerilla groups who stayed in the mountains. They were instrumental in delaying the advance of the Japanese and providing information that enabled the Filipino-American contingent to win the war in the Philippines. We will emulate their example in this battle for economic development.

Filipino SMEs wishing to penetrate the global market do not have the resources that could even begin to compare with those of multinationals. They could not win in a traditional battle based on traditional management styles, which come down to logistics management. They must use their resources Guerilla-style:

1. Look for battles they can win;

2. Partnerships and alliances they can form;

3. Use indigenous local resources, mobilize Filipino talents; and

4. Be creative and innovative in managing their companies.

Technopreneurship: Redefined

2008-07-26T19:15:00.000-07:00

A critical part of changing mindset is redefining terms. As a start, we must understand the importance of technopreneurship and why it is different from entrepreneurship.

In the Philippines, entrepreneurship is seen to be an alternative to employment. Instead of having a boss, you could be your own boss, manage you own finances and take charge of your time. With this, setting up a sari-sari store, sell Banana Que or owning several jeepneys could be considered entrepreneurial ventures. It provides a steady flow of income and a comfortable life for the owner, at least for the next several years until someone else opens up a nearby sari-sari store or the jeepneys are still new and is not so costly to maintain. The danger of this mindset is subtle but deadly. It lulls the owner into a false sense of security and the business stagnates and doesn't grow. And just like all things in nature and in life, things that doesn't grow, dies. Entrepreneurship in the Philippines fails to grow because they lack a vital quality, the concept of continuous growth and innovation. For this, it is not enough that they just be entrepreneurs, they must become technopreneurs. Whereas the term usually refers to geeks who became entrepreneurs, we will redefine it so Filipino entrepreneurs can become technopreneurs even without a Bachelor of Science diploma.

Definition #1

An entrepreneur is a person who has possession over a company, enterprise, or venture, and assumes significant accountability for the inherent risks and the outcome. Technopreneurship is usually defined as entrepreneurship engaging in a technology related business. This could be in the field of Information and Communication Technology, Biotechnology or other fields in science and engineering. Simply put:

Technology + Entrepreneurship = Technopreneurship

This is true but I believe that the definition is inadequate and confusing.

Definition #2

In this blog, I am defining "Technopreneurship" as the formation of a company that innovatively use technology to gain an 'unfair' sustainable competitive advantage. Let's take for example a web-based company. With the original definition, all companies that uses the Internet to engage in business is a technology-based enterprise. However, with the second definition, we will only consider a company 'technology-based' if it derives an 'unfair' sustainable advantage from the use of a particular technology.

The term 'unfair' is very much different from 'illegal'. It refers to the 'twist' in the business concept of the technopreneur that gives him a clear advantage over his competitors. This could be in the form of a new product or product feature, a superior marketing strategy, an efficient manufacturing methodology or a quick distribution and sales system.

An additional requirement is the 'sustainability'. The 'unfair' advantage must be sustainable. If a company lowers its price to attain a competitive advantage, that strategy is not sustainable. However, if he lowers his price because a technical innovation lowers his production cost, the strategy is sustainable and he gains an enormous competitive advantage. Our revised simple definition is:

Technology + Entrepreneurship = Technopreneurship

with an 'unfair' sustainable competitive advantage

A technology-based enterprise is one that derives a competitive advantage from the direct or indirect use of technology; i.e., a very good example of this would be the Apple iPod. It has a number of innovation, the most significant of which is 160Gb 1.8 inch harddisk drive that is much smaller than your average 3.5" harddisk has a 40Gb capacity. Many people, even techies, was fascinate by this and was left at awe and wonder how Apple was able to do that. This sense of wonderment led to purchases, thus began the iPod legend. United Parcel Service or UPS is able to offer one day delivery anywhere in the world because of their sorting and delivery facility that could process up to 1,000,000,000 parcels a year. If you look at the big companies now, most of them has an 'unfair' sustainable competitive advantage brought about by the use of technology.

But one advantage of our new definition is that it doesn't limit technopreneurship to really high-tech stuff or to business we normally relate to as 'technology-based'. For example, an internet cafe is not considered a technology-based enterprise even if it uses computers in its business operation. However, with our new definition, it could be considered a technology-based enterprise if the computers and/or the computer network is configured much differently than ordinary internet cafe businesses. If Mang Arnold uses Linux clusters as a powerful central server and just uses thin clients for customer terminals, he could drastically reduce cost while improving system performance. This is not normally done by Internet Cafe owners and, if he does this, it will give him an 'unfair' sustainable advantage and he could be called a technopreneur.

Aling Iska, the owner of a Barbeque stand could also become a technopreneur. Instead of just waiting for pedestrians to approach her barbeque stand, she could take advantage of the call/text unlimited promo of Sun Cellular. Everyday, she could call or text her clients if they want to order barbeque. Of course not all her clients will order but enough will do and this will help her earn more. By using technology, albeit a technology available to everyone, she gains an 'unfair' sustainable competitive advantage over other magba-barbeque. Thus, unknowingly and arguably, she could be called a Technopreneur.

This redefinition is important because we want to encourage innovation. Although we would like technology-leap kind of innovation, it is not yet possible with the current economic and technological state of the Philippines. We need to start where we are and innovate what we can and continuously grow from there. Building a Culture of Innovation is critical in the implementation of the Philippine Technopreneurial Revolution and it begins with this -- a redefinition of Technopreneurship.