Business Innovation Center (BIC) showcases Indonesia’s Top 100 Innovations

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:

Selection of Top 100 Innovations from Indonesia

Sector Innovations
Food
  • Chitosan – A natural preservative using byproducts from invertebrate sea creatures to substitute formalin in the salt dried fish industry.
  • All-natural coconut oil – A new way using yeast used to ferment tempeh that can separate the coconut milk without using  chemical heating or additives.
New Energy
  • 3-in-1 Agricultural dryer – A pyramid shaped dryer that uses 3 sources of energy: the electricity and thermal energy from solar, wind, and Biomass.
  • Sea pendulum energy generator – Power generator based on a pendulum swinging from the sea waves to generate up to 500 KW of electricity, utilizing Indonesia’s natural sea energy.
Transport
  • Shallow water catamaran – A catamaran (two-hull) boat that can carry heavier loads but does not generate excessive wake using an innovative asymmetrical hull design.
  • New indigenous composite material brake pads – These new brake pads can replace the current cast iron pads, are lighter, cheaper and last longer.
Info/ Comm. Tech (ICT)
  • Batik design using computerized fractal – Using fractal, a branch in math and geometry, to produce fresh, contemporary colorful shapes and design patterns.
  • Remote digital meter reader – Incorporating the radio technology, electric meter reading can be done remotely, in addition to cutting and reestablishing the line.
Defence
  • Hazardous cable cutter robot – A robot that can be used dangerous situations such as cutting cable to defuse a bomb or cutting high voltage electric cable.
Health & Medicine
  • Spirulina grown in latex waste – Spirulina also known as “magic food can be grown in latex effluent in a cost efficient and environment friendly manner.
  • Pure Water from Sea Water – A sea water distillation system, fully powered by solar energy that produces table salt as its by products.
Others
  • Earthquake resistant foundation – A spider web construction is able to withstand earthquakes, is cheaper and faster to make and can support a 4 story building.
  • Vacuum cleaner machine freezer – Machine consists of the freezing room, vacuum pump and cold trap system and is very effective for products with high water content.
Source: BIC Top 100 Innovation

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!

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Key Learnings:

  • 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.
Author: Mr. Meraj Mohammad

 

Pakistan’s Defense Private Sector Emerges with Indigenous UAV Technology

Back in 1970, the American Army Gen. William Westmoreland is reported to have said: “On the battlefield of the future, enemy forces will be located, tracked and targeted almost instantaneously through the use of data links, computer-assisted intelligence and automated fire control. … I am confident the American people expect this country to take full advantage of its technology-to welcome and applaud the developments that will replace wherever possible the man with the machine.” It seems that this vision from the 1970s is being realized today. One manifestation of it is the development and deployment of unmanned aerial vehicles by many nations, including Pakistan.

Image source: www.idaerospace.com

The growing reliance on armed drones (aka Predators) by Americans in Afghanistan and Pakistan’s FATA region to target militants has been making headlines with increasing casualties.

This technology of Unmanned Aerial Vehicles (UAV) or drones designed and manufactured in Pakistan has also been making news since the IDEAS (International Defense Exhibition and Seminar) 2008 event, a 5-day biennial arms show held November last year in Karachi, Pakistan. Among the largest foreign pavilions at the exhibition, Turkey had 28 companies and United States had 22. Other major exhibitors came from China, France, Germany, Italy, Russia, South Korea, South Africa, the Ukraine and the United Kingdom. Among other products, Pakistani companies showed off JF-17 fighter plane built by Pakistan Aeronautical Complex in partnership with China’s Chengdu Aircraft, Al-Khalid main battle tank, and a variety of Unmanned Aerial Vehicles (UAVs) designed, developed and built in Pakistan.

While offering employment to thousands, and strengthening Pakistan’s defense, the growing indigenous sophistication of many of the private sector companies is also becoming an attractive investment opportunity.

Integrated Dynamics

One such Company is Integrated Dynamics, a privately held Pakistani company that drew attention at the IDEAS 2008 expo. It is a developer and manufacturer of unmanned aerial vehicles which is exported to Australia, Spain, South Korea and Libya and the United States. The UAV Company is an example of a new generation of private defense companies in Pakistan that have grown with the emerging needs of Pakistani military and export opportunities to both military and civilian sectors abroad.

Integrated Dynamics is a full-service UAV (Unmanned Aerial Vehicles) systems provider based in Karachi, Pakistan. The company has been in business since 1997 and designs and integrates UAV systems primarily for the Government of Pakistan, the Pakistan armed forces and export.

The company says they are committed to the use of the UAV system as a scientific and defensive tool that can be used to save lives and monitor potentially hostile environments for human personnel. The company also makes drones such as the turbojet-powered Tornado decoy, which can fly up to 200 kilometers, and emit false radar signals to “confuse enemy air defenses into thinking they are attacking aircraft,” according to Defense News of Pakistan.

In addition to supplying drones to the Pakistani military, the company exports its products to Australia, Spain, South Korea and Libya and the United States. The US Homeland Security Department uses ID’s Border Eagle surveillance drone for border patrol duties. Integrated Dynamics’ products cost only a fraction of the cost of comparable products made in the United States and Europe. According to the Karachi-based company, ID UAV prices start from about USD 20,000 while in comparison UAV products made in the West start from about USD 200,000. The ID models have operational ranges of 20 to 1,600 kilometers.

Integrated Dynamics had begun to develop the Firefly mini-rocket UAV in late 2004 in response to the Pakistani army’s operational requirements for a high-speed, short-range observation system that could be used in the high-altitude environments of northern Pakistan. A basic system of such sort costs around USD 3,000 and comprises four rockets, a launcher, a carry case, datalink and a PDA-based ground control station.

Emerging Sophistication from a Cottage Industry

JF-17 Jointly developed by Paksiatn and China

Pakistan’s arms manufacturing sector has long been considered to be a cottage industry. The dusty little town of Darra Adam Khel,only a half-hour drive from Peshawar, reminds visitors of America’s Wild West. The craftsmen of this town are manufacturers and suppliers of small arms to the tribal residents of the nation’s Federally Administered Tribal Areas who carry weapons as part of their ancient culture. The skilled craftsmen of FATA make revolvers, automatic pistols, shotguns and AK-47 rifles. Until five years ago, the list also had items such as anti-personnel mines, sub-machine guns, small cannons and even rocket launchers. The Pakistani government has forced the tribesmen to stop making heavy assault weapons to try and prevent the Taliban and Al Qaeda from having access to such weapons.

Pakistan’s arms industry has come a long way from making small arms as a cottage industry in the last few decades. The US and Western arms embargoes imposed on Pakistan at critical moments in history have proved to be a blessing in disguise. In particular, the problems Pakistan faced in the aftermath of the Pressler Amendment in 1992 became an opportunity for the country to rely on indigenous development and production of defense equipment.

Pakistan’s Military Industrial Complex

Flamingo – Satuma Pakistan

The country now boasts a powerful industrial, technological and research-based developing and manufacturing sector for its armed forces and exports a wide variety of small and large weapons ranging from modern fighter jets, battle tanks, armored vehicles, frigates and submarines to unmanned aerial vehicles and high tech firearms and personal grenade launchers for urban combat. Some of these items were on display at IDEAS 2008.

Pakistan has become an increasingly important player in the world arms industry, a global industry and business which manufactures and sells weapons and military technology and equipment. Arms production companies, also referred to as Defense Contractors, produce arms mainly for the armed forces of nation states. Products include guns, ammunition, missiles, military aircraft, military vehicles, ships, electronic Systems, and more. The arms industry also conducts significant research and development. Pakistan’s major defense manufacturing companies are owned and operated by Pakistan’s military.

Mukhbar- Satuma Pakistan

According to Business Monitor, Pakistan’s defense industry contains over 20 major public sector units (PSUs) and over 100 private-sector firms. The majority of major weapons systems production and assembly is undertaken by the state-owned PSUs, while the private-sector supplies parts, components, bladed weapons and field equipment.

Major PSUs include the Pakistan Ordnance Factory (POF), Heavy Industries Taxila (HIT), Pakistan Aeronautical Complex, Karachi Shipyard and Engineering Works (KSEW) and the Pakistan Machine Tool Factory. Multinational presence in Pakistan is limited, although joint production or engineering support in the development of certain armaments has recently occurred with companies such as DCN International and the Chengdu Aircraft Industry Group.

IDEAS 2000, Pakistan’s first major arms show, was organized after former President Musharraf assumed leadership of the country in the wake of the 1999 bloodless coup that toppled the Nawaz Sharif government. At the show, the former president emphasized the need for the growth of Pakistan’s defense industry and private sector involvement in R&D, manufacturing and marketing of arms. Held every two years since the year 2000, the show has become a runaway success. It has helped Pakistan and other friendly nations to show off their wares, find customers, share knowledge, build bilateral partnerships, encourage scientific innovation and learning among young people and made visitors and Pakistani citizens more aware of the role the defense industry plays in national defense and economy.

World Arms Market

It is estimated that yearly, over USD 1 trillion are spent on military expenditures worldwide (2% of World GDP). Part of this goes to the procurement of military hardware and services from the military industry. The combined arms sales of the top 100 largest arms producing companies amounted to an estimated USD 315 billion in 2006. In 2004 over USD 30 billion were spent in the international arms trade (excluding domestic arms sales). Many industrialized countries have a domestic arms industry to supply their own military forces. Some countries also have a substantial legal or illegal domestic trade in weapons for use by its citizens. The illegal trade in small arms is prevalent in many countries and regions affected by political instability.

Pakistan’s Arms Business

In a July 2008 interview with Pakistan’s Dawn newspaper, Major General Mohammad Farooq, Director General of the Defense Export Promotion Organization, claimed that Pakistan’s defense exports have tripled to around USD 300 million because of the quality of its ammunition, anti-tank guided missiles, rocket launchers and shoulder-fired surface-to-air missiles. He said exports to South Asian, Middle Eastern and African countries had increased significantly. It has been reported that Sri Lanka has purchased cluster bombs, deep penetration bombs and rockets and UAVs from Pakistan.

General Farooq said optical instruments like night vision devices, laser range-finders and designators, laser threat sensors, artillery armor mortars and munitions, mine detectors, anti-tank rifles, missile boats, different types of tear gases, fuses of unarmed vehicles, security equipment and sporting and hunting guns were also being manufactured in Pakistan. “The fuses are being purchased by countries like Italy, France and Spain,” he said.

In recent times however, Pakistan has come under criticism by human rights groups for being a leading manufacturer and exporter of land-mines, cluster bombs and depleted uranium munitions.

Pakistan’s UAV Industry

The three main branches of the Pakistani military are evaluating UAVs made in Pakistan and the rest of the world for purchase and deployment.

Uqaab – Air Weapons Complex

Pakistan has been eager to boost its capabilities for high-tech aerial warfare and restructure and reorient its military to respond to the new and emerging challenges of combating insurgents. A number of public and private sector companies have been engaged in research, development and manufacturing of unmanned aerial vehicles as a part of this initiative. The public sector companies include Pakistan Aeronautical Complex, Air Weapons Complex and National Development Complex.

This growing interest by Pakistani military and also foreign companies and governments has helped spawn several private Pakistani UAV companies specializing in air-frames, launch and propulsion, flight control, tele-command and control systems, signal intelligence, training simulators, etc. In addition to Integrated Dynamics mentioned earlier, other private companies involved in UAV development and manufacturing include, East-West Infinity, Satuma and Global Industrial Defense Solutions.

Between the public and private sector UAVs developed in Pakistan, there is a long list of products. In addition to Integrated Dynamics described above, here are three more UAV companies in Pakistan:

East-West Infinity

One of the companies at the forefront of UAV development is East West Infinity (EWI). EWI’s latest products are the Heliquad micro tactical UAV and the Whisper Watch signals intelligence (SIGINT) package. The Heliquad was first displayed in prototype form at the IDEAS 2006 defense exhibition. Equipped with a tiny camera, it can relay pictures back to troops or Special Forces in an urban environment or in the field, giving them a tactical reconnaissance capability. Being exceptionally small and powered by four electric motors, Heliquad is highly stealthy and represents the cutting edge of EWI’s electronics miniaturization. SIGINT has become more important with ongoing anti-terrorism operations on the western front and in the tribal areas. Designed for militaries unable to afford high-end, dedicated SIGINT platforms, the company says its Whisper Watch platform is most effective when aerostat-mounted, as the platform is stationary and airborne for longer.

Satuma

Satuma (Surveillance and Target Unmanned Aircraft), founded in 1989, is a small UAV specialist company based near Islamabad, Pakistan. Satuma products include Flamingo, Jasoos and Mukhbar UAVs. Its biggest customer is the Pakistani military.

Global Industrial Defense Solutions

GIDS, the largest of the private defense sector companies, has a UAV division, which produces a whole range of operational and training UAVs, the main customer of which is the Pakistani military. The UAVs developed by GIDS have been extensively flight tested by the military. GIDS ground control stations have an interactive and user friendly interface, where flight parameters and auto-pilot mission planning, and execution is done in addition to reception of high-end crisp quality video transmitted over an encrypted digital link.

Headed by a retired PAF Air Vice Marshall, GIDS has emerged from a combination of 7 Pakistani private defense companies that include AERO (Advanced Engineering Research Organization), IDS (Integrated Defense Systems), MSL (Maritime Systems Pvt Limited), ACES (Advanced Computing and Engineering Solutions), IICS (Institute of Industrial Control Systems), ATCOP (AI-Technique Corporation) and SETS (Scientific Engineering and Technology Solutions). Other than UAVs, its major products include anti-personnel, anti-armor, incendiary, anti-runway, electronic impact and time-based fuses, electronic warfare equipment, navigation systems, optical fiber and optical fiber cables. Anti-tank Wire Guided Missile System known as “Baktar Shiken” made by IICS, is a component of GIDS.

Conclusion

Pakistan’s growing defense industry is becoming high tech to keep up with the challenges of a changing world that requires advanced weapons and new strategies to maintain peace and stability in a hostile neighborhood. Simultaneously, Pakistan’s defense industry is contributing to a scientific, technological, industrial and economic development of the nation by training and employing thousands of citizens. The investments made in defense production are a good bargain for the companies, their investors and the taxpayers of Pakistan to help ensure the nation’s economic, political and national security against both internal and external threats.

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Riaz Haq (www.riazhaq.com) is the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. He is an alumnus of NED University, Pakistan and served as Chairman of the NEDians Convention 2007 held in Silicon Valley, CA. He has more than 25 years experience in the hi-tech industry and has been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls.

He is a pioneer of the PC and mobile communications businesses and has held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. He was recognized as “Person of the Year” by PC Magazine for his contribution to 80386 program. He has an MS degree in Electrical engineering from the New Jersey Institute of Technology, Newark, New Jersey.