Business innovation has had a lot of buzz created in the last few years. The difficulty with innovation is that we all have an intuitive understanding of the topic and we aspire to be innovative, but struggle to make it real and tangible. This challenge is further complicated when we see “others,” – companies, communities and countries – innovate and yet we are not able to repeat those successes. This is especially true for emerging countries as they try to keep pace with innovation that is coming from the developed world.
To address the innovation challenge, Indonesia, the world’s fourth largest country by population, has come up with a bold and innovative (what else!) approach. In 2008 the Ministry of Research and Technology established a Business Innovation Center (BIC) with the vision to “become the leading Business-Innovation intermediary, in order to promote Indonesia’s economic and business competitiveness.”
Top 100 Innovations Report
A practical and inspiring output of this initiative has been to showcase Indonesia’s leading indigenous business innovations that already exist. An impressive list of Top 100 innovations was compiled covering relevant sectors of food, energy, health & medicine, ICT, defence, transportation and others.
Indeed, the report is a source of inspiration and shows how high impact business innovation is within the grasp of every entrepreneur from any developing country.
A selection of the innovations highlighted in the report are as follows:
These top 100 innovations were selected from a total of 623 proposals spanning multiple segments. The selection was conducted by a jury of 14 members comprising a cross-section of industry, academia and government that used 8 criteria for selecting the finalists. The criteria were deliberately chosen to emphasize the business aspects of innovations.
Readers are encouraged to browse through the Top 100 Innovation report. As of press time, the report is partly in English and partly in Indonesian – later the website will support English as well.
This report is designed to be read by a broad population – this is not a detailed patent description or an academic write-up of the innovation. The report uses simple language, clear visuals and elaborates color-coding to make it an easy read for the average person. For each selection, the report articulates what is the innovation and why is it useful. This is important as it helps bring down the innovation from the ivory tower to the common masses.
Key goals of the Business Innovation Center (BIC)
Speaking to DinarStandard, Kristanto Santosa, Executive Director of the Center, highlighted that the key drivers fro establishing the Center were the opening up of the Indonesian economy and the imperative to make it globally competitive. In prior years, local companies had protection in terms of tariffs and other barriers, and relied extensively on partnering with foreign firms or licensing their technologies.
A broader goal of the center is to promote innovation so “in 10 years, innovation activities in Indonesia will be superior (benchmark) to other countries in ASEAN bloc.” This is a key point for other countries that embark on a similar initiative. The conscious tracking of innovation activities leads to better utilization of resources and allow the Center leadership to change track if results are below expectations.
Triple helix of business, academia and government to support innovation
A key challenge for facilitating innovation across a nation is to ensure that all constituents are involved in the activity. The BIC overcame this by bringing together Academia, Business and Government to form the integral core of the institution – something the centre calls “the triple helix.”
This combination ensures that many innovations do not remain in their traditional silos – such as developments that do not cross a university’s boundary due to a lack of business commercialization skills. Mr. Santosa emphasizes the importance of effective communication as the “language used by R&D is very different from the one used by business teams. The business focuses on development time, cost and returns, whereas R&D focuses on features and functionality.”
Another advantage of having a consortium of academia, business and government is that it helps in open innovation – innovation that requires multiple entities to partner together. This is especially important for major innovation breakthroughs that require significant expertise and capital that may not available to a single company or a university. Thus, other countries wishing to start a similar institution would do well to emulate the BIC model of ensuring that government, industry and academia are involved from the very beginning.
Thou shalt innovate! – does not work;Instead inspire innovationInnovation is not a top-down activity, that is cannot be mandated on an organization. Ideally, it should flow in all directions – from junior employees to senior executives, from human resources to R&D department. So given that innovation cannot be forced, however, it can surely be facilitated. This is especially important for emerging countries that do not have the benefit of say a Silicon Valley – to provide role models, mentors, venture capital, etc. In these cases a formal institution to help broaden the thinking, generate aspiration and provide support goes a long way in helping innovation.
An effort like the Top 100 Innovations report publication helps inspire the broader community about innovation. This happens in multiple ways. First, it helps de-mystify innovation. Innovation is no longer perceived as some magical activity that is being performed by the gifted people. Seeing common people come up with new ideas helps make it real! Second, it breaks the myth that innovation requires huge investments or some special talents. Third, this type of activity creates healthy competition amongst the participants for future innovation competitions. Fourth, awareness of innovators will help create role models, mentors and communities of interest to spur future innovators. Finally, the awareness of innovations helps connect the innovators with other interested parties that may help commercialize them.
As institutions try to promote innovation, they oftentimes fall into a trap of focusing on one or two areas while neglecting other promising areas. ICT (Internet and Communication Technologies), Bio-tech and Renewable Energy are the favorite focus areas for many innovation groups, VC firms and startups. The BIC did a good job of ensuring that it covered a broad spectrum of innovation areas, based on the National Research Mission of Indonesia. Thus multiple industries that are important at a national level were included such as food, transport, and others, thus identifying a wide variety of innovation topics.
Supporting hands-on day-to-day innovation
The BIC supports a lot of hands-on work to realize innovations. This assistance is crucial, as it translates the theory into practice. A lot of promising ideas across the globe go waste, as they were not matured to their logical conclusion. This is a bigger problem in emerging countries where innovators have difficulty getting answers and support for the very basic questions – like how to patent an idea? How to develop a business plan? How to market or commercialize a product? Etc.
The BIC provides a range of service from access to facilities to conduct research, to leading workshops on specialized topics like patenting, to conducting customized consulting for companies, universities and government bodies. Apart from tangible knowledge sharing, BIC also facilitates the soft side of innovation, like networking amongst innovators, connecting innovators with appropriate businesses or industry groups, etc.
…a key challenge BIC faces, is “the lack of a system to invest in risk-bearing investments,” says Mr. Santosa
Road ahead for BIC
The BIC is a young institution, with impressive results and ambitious goals. However, some of the key challenges it faces, is “the lack of a system to invest in risk-bearing investments,” says Mr. Santosa. From a government perspective, its easy to invest in bridges, roads and defense, but difficult to invest in risk-laden innovations. In addition, there is an absence of a venture capital community, angel investors and of trading markets like the NASDAQ. There is potential for a Shariah based investment approach that equitably shares the risks and benefits across the innovators and investors. Finally, the businesses are used to focusing on the operations and market development instead of R&D.
Mr. Santosa is optimistic about the road ahead for BIC. The next report has a foreward written by the President of Indonesia, as a sign that the institution is gaining traction. The center is evolving rapidly and wants to be an open platform for innovation – they are open to collaboration with other parties and countries. In conclusion – they use the analogy of entropy to encourage innovation – that is a positive movement on innovation by one molecule increases the innovation energy for the entire system!
- When setting up an institution to promote innovation, make sure that it has cross-functional representation as well as broad industry coverage. In the case of BIC – the combination of academia, business and government helps ensure an integrated approach towards innovation and ensures that promising projects do not languish within the R&D silo.
- Facilitate an environment, or culture for innovation. The Top 100 innovation report, showcases recent successes, increases confidence in the ability to innovate, instills a sense of pride for the accomplishments and creates a healthy competitive atmosphere for further innovation
- Provide hands-on help, where needed. Apart from providing conceptual training and motivation, the institution has to have a roll-up-your-sleeves attitude to help innovation. This includes activities like consulting support, patent workshops, business case development, networking forum, etc.
|About the Author: Meraj Mohammad is a management consultant focusing in the area of strategy and innovation. He serves as an Independent Consultant of DS Consulting – growth strategy services). Meraj has over 10 years of experience, most recently, working with PRTM Management Consulting, where he led a variety of engagements on innovation management.Meraj has B.Tech from IIT, Kanpur, India; a MS from Virginia Tech and is pursing an Executive MBA at Columbia University. He may be contacted for comments at Merajm@Gmail.com.||