Innovation is a community responsibility, let's pitch in
The UAE has taken a lead in committing to Blockchain and AI as the technologies to shape its future. Yet this needs a lot more industry co-operation and initiative beyond the market leaders.
By Shalini Verma (Real & Virtuall)
Published: Mon 15 Apr 2019, 9:07 PM
Last updated: Mon 15 Apr 2019, 11:15 PM
A narrow strip of land between San Francisco and San Jose has been a centre for technology startups for decades. Some of the most celebrated high-tech companies started their journey in the Silicon Valley. It remained the cradle of innovation long after it ceased to be a leader of the product it was named after. Across the world, innovation clusters and cities have emerged as the inimitable promised land for inventors and the creative sorts, who swarm there to test their moonshot. Their economic hustle and bustle have far reaching effects on markets and geopolitics.
Are there good reasons why they grew into epicentres of technology innovation and enterprise? What led entrepreneurs to turn an unassuming Shenzhen into a thriving centre of hardware innovation? Why did companies around the world turn to Bangalore for outsourced software development?
A more incisive look at what shaped the Silicon Valley reveals that there were many forces at play. Strong professional networks that connected capital with great ideas, or great ideas with talent, were built on a spirit of collaboration and sharing. These ties created an excellent support system for graduates from the same university dorms. Talent attracted more talent, thus making the Valley a confluence of great minds. But underpinning this multiplier effect was a confluence of vision of the government, universities and venture capitalists.
The State of California prohibited non-compete clauses so that employees with a great idea could venture out. Stanford University professor Frederick Terman wanted to create jobs for his students, so he used his contacts in the government to get research grants. He set up the Stanford University Industrial Park for the university and businesses to work together. Hewlett Packard was born out of his effort to secure government grants for his students William Hewlett and David Packard to start their company in a garage.
China's driving force of innovation, Shenzhen grew out of the underbelly of low-tech sweatshops of risk-taking migrant entrepreneurs who grabbed every sliver of opportunity to up their game. Today, businesses in Shenzhen file more international patents than those from Britain and France. From flying robots to surgical robots, you name it; there is an innovation led company with an integrated R&D and manufacturing centre churning out patents and cutting-edge products at great speed. Now companies from around the world want to set up their R&D centre in Shenzhen to leverage or at least stay abreast of the advances in high-end manufacturing.
Yet the bounties do not last forever. Overtime these centres become a victim of their own success. Silicon Valley is unable to foster new innovation because startups cannot grow in the shadows of Big Tech that has emerged as the black hole for capital and talent. The urban sprawl of Bangalore is no longer the only go to city for Indian startups because its infrastructure is bursting at the seams. This gives cities like Dubai and Abu Dhabi a window of opportunity to become the city of choice for technology entrepreneurs.
The UAE ticks most of the boxes for ease of business. There is no dearth of incubators, accelerators, and co-working spaces for startups. It is evolving into the Florence of Middle East and Africa as it attracts talent by providing a safe and stable business environment to tech startups. Beyond this gold rush, businesses need to develop a competency network extending beyond their organisation.
Any innovation cluster does not evolve because of the effort of one organisation alone. Cross pollination of ideas, resources and talent across universities, government and private enterprise provide the fertile soil for startups to germinate, similar to Dubai Future Foundation's initiative. The independent city state of Florence set in motion the Renaissance age because wealthy citizens gave patronage to budding artists and intellectuals. There must be a healthy nurturing relationship between those with capital and those with talent and ideas.
Innovation cannot happen in splendid isolation. The early collaboration between IBM and Microsoft to develop an OS for IBM's first PC made both companies more successful. Foxconn the low-cost manufacturing outpost for Apple, now hosts Apple's R&D centre for rapid prototyping. While the leading companies in the UAE are making good strides, second tier companies wanting to move up the industry leaderboard are sitting on a pile of untapped opportunities. There is risk of a widening innovation gulf between tier one and tier two companies. The latter need to blur the boundaries with their partner ecosystem to take leadership positions in innovation. They need to develop an open innovation mindset to forge co-investment ties with other organisations through accelerator and entrepreneur-in-residence programmes, as well as industry partnerships to allow for a free flow of ideas and initiatives.
The UAE has taken a lead in committing to Blockchain and AI as the technologies to shape its future. Yet this needs a lot more industry co-operation and initiative beyond the market leaders. The positive nexus of consumers, creative communities, universities, tech startups, and established businesses can create a rich network for UAE to build a sustained technology innovation cluster in the coming decades. But this requires companies of all shapes and sizes to pitch for their moonshot.
Shalini Verma is the CEO of PIVOT technologies