Sunday, July 22, 2007

Rice and Chips: Replicating the Silicon Valley Model

In his book, Rice and Chips: Technopreneurship and Innovation in Asia, Dennis Posadas, IT industry veteran and BusinessWorld I.T. Matters columnist, identifies what he sees as the distinguishing elements (e.g. geographic clustering, universities and research institutes as catalysts, the availability of venture capital etc.) that made Silicon Valley the exemplar for high technology entrepreneurship and innovation. He then provides a survey on how these elements are being replicated across Asia (including the Philippines) as well as some pointers on how the model is (or can be) adapted to suit the local context. In this area, he touches upon the importance of an institutional framework, the role of returnee Asians from the West as well as the need to promote a culture that tolerates failure.

Much of the value of the book comes from his interviews with Asian entrepreneurs such as Deepak Amin of Covelix and Peter Valdes, Fil-Am co-founder of Tivoli Systems, a systems management software company that was eventually acquired by IBM.

Of particular interest to me is his discussion of the role of industrial policy in developing the Information and High Technology industries which he labels Techno-nationalism and defines as:
"a desire to free their economies from an over reliance on Western technologies, and to be recognized internationally for the ability to develop their own cutting-edge technologies. Most Asian economies drive innovation through national programs rather than market-driven research and development"
This observation squares with what i have previously written about concerning industrial development. The role of the State has been a contentious issue (for example in the comments section here). Nevertheless, i believe that the author remains relatively agnostic about this matter and acknowledges the useful role that multinationals play in driving innovation.

More about matters concerning the book here.


sparks said...

hey chad, i've a question. how'd you manage to get your labels on the sidebar?

cvj said...

Hi Sparks, go to 'Page Elements', then click on 'Add a Page Element'. Choose 'Labels'.

sparks said...

arrgh. but i'd have to re-format everything to do it...ah well. i'll do it when i get sick of my layout. thanks!

MBW said...

Re: Valdes (was it?) acknowledges the useful role that multinationals play in driving innovation.

No quarrel with that cvj. Quarrel is with non-innovative markets where multinationals are prepared to pump in investments in the hope of a decent ROI.

Philippines is one country that likes to be called innovative but suffers from non-innovation malignancy.

Root cause: rampant, across the board, endless, sky is the limit corruption.

MBW said...

In 1992, my company, a multinational and one of the top 10 in the world in its domain, offered to invest more than 500m$ worth of technical knowhow, equipment, etc. in a project under FVR's self reliance program or the BOT scheme.

Everything was aboveboard. Company wanted to penetrate the market that after the US bases were vacated and thought RP was going to be a level playing field. We have shortliste potential local partners - Keppel, Baseco, and even EEI. All three were go, go. We finally signed an MOA with Keppel and the Naval dockyard.

We bought a software company for the occassion, recommended by one of FVR's people in Malacanang. Everything was going well but when we consistently refused to pay "commission" or facilitators' fee to some cabinet members, one of whom currently holds a seat in the SC, the whole thing stagnated. We had spent well over dozens of millions of dollars in due diligence reports, etc. and we thought we should cut our losses and sent our engineers home.

Can lead a horse to water but you can't make it drink. Up to him.

cvj said...

Anna, i believe what you just described is a case of economic sabotage.