Subba’s Serendipitous moments

July 25, 2009

Singapore’s research institutes — suffering from split personality?

Is there a synergy between advanced technology R&D and standard training to mid career professionals so that they could garner yet another certification?

Or is it merely a case of making some revenues to cover their costs?

Or worse still, is it a way for the R&D institute to do some “notional national service” when there’s no local company to use the outputs produced by the R&D organization?

The strategies adopted by Singapore’s R&D institutions especially in the IT sector has always confounded me. The latest one is the Data Storage Institute and while on the one hand they claim they do cutting edge research, they are also offering standard training courses which can lead to industry certification (SNIA).

The milestones listed doesn’t talk about any breakthroughs in research or development but merely administrative or routine events. Has DSI lost it completely?

Well as an organization, sure they have resources to do both, but should they be doing both in the first place?

The data storage industry has changed significantly over the years and if DSI doesn’t find a clear and compelling reason to exist, they should redirect their strengths somewhere. It seems to me that there’s a huge disconnect between their areas of research and the aspirations of the local industry. The result — it is research for research sake and if at all there’s any benefit, it is for the MNCs who in any case can source such research from anywhere in the world.

This leads to the question — Does DSI have a compelling reason to exist?

Long timers in Singapore would possibly recognize that the Institute of Systems Science or ISS as it was popularly known had always a confused identity– It was a research institute, training institute, did consulting projects and many other things. It used multiple identities to its advantage sometimes, but despite being given dollops of dollars, it didn’t produce anything outstanding — be in in research, consulting or training. Finally it divested its research activities and became a training service provider. It does provide good training, but the courses it offers can be provided by any training service provider in the private sector.

Looks like DSI is going the same way as ISS?

Sometime back I wrote that Singapore’s research and development needs a rethink. It led to several interesting discussions amongst friends and quite a few work in the R&D sector. The surprising thing is that they do agree that it needs a rethink.

So, when will this happen?

June 18, 2009

What ails Singapore entrepreneurs?

I am not talking about the entrepreneur who sells red bun and starts yet another coffee shop. I am talking about technology entrepreneurs who create products, services, generate jobs and stimulate growth.

Singapore is probably the only country in the planet which has a Ministry of Entrepreneurship staffed by eminent and scholar Ministers. The first to head the Ministry in 2003 was Raymond Lim a Rhodes and a Colombo Plan scholar. Subsequently it was headed by Dr. Vivian Balakrishnan for a very short time before Lee Yi Shyan took over.

Despite such scholar Ministers, Singapore has had limited success as entrepreneurs and very less of technology and new media entrepreneurs. The Government has put in all kinds of incentives and generous funding.

My own assessment after having done some serious thinking is as follows:

  • Few angel investors or Series A investors
  • Start ups don’t collaborate and create partnership networks themselves
  • Start ups don’t think global – they depend too much on the local market
  • Big Singapore companies are not encouraging about start ups
  • Start ups build business the traditional way – Not disrupting anyone
  • They try to copy other successes blindly
  • Clearly no game changing ambition
  • Less idealistic, hence do not get the new business models.
  • Excessive focus on making money quickly – No big picture or long term picture in mind
  • Focus on sales, not on a compelling value proposition
  • Start ups don’t even do simple, free marketing – blogs, viral marketing etc.

James Chan has some interesting observations and I would agree with all of them.

Does anyone have anything to add to this?

Isn’t is a paradox that we were once a nation of entrepreneurs? Our forefathers from China and India arrived here without any support with barely to survive and set up businesses. Even today the Chinese and Indians have successfully set up businesses not just in their own countries, but all over the world.

Where and how have we lost the spirit?

June 13, 2009

Can Singapore do the makeover?

Many people have realized that the Singapore model of attracting MNCs to locate their operations here and use that as the base for expansion has run its course. The markets in China and India are big, complex and growing and cannot be run out of Singapore. Every MNC that I have known has a China strategy, a India strategy and most of the operations (factories, R&D centers, support centers) are all located there.

If that is reality why does sections in the civil services in Singapore and even politicians sing the old tune of attracting MNCs to Singapore? And in desperate attempt to get MNCs to start operations here and create jobs, they offer lots of incentives. Once the incentives have run their course, the MNCs pack their bags and go elsewhere.

Rob McDonald the incumbent CEO of Proctor and Gamble who is also on the IAC of the EDB has some clear homilies to offer. One, he is absolutely right when he says that the single minded pursuit of foreign investment (sometimes at the cost of local industry development) has ceased to be a winning proposition for growth. Labour costs have gone up and so has the cos tof doing business. Moreover other countries have become equally attractive.

Singapore’s R&D sector despite Government pumping in billions of dollars have not borne fruit. Though it is early to make conclusive judgment, trends seems to indicate that we have a long way to go. It is as easy to set up a R&D centre in Shanghai or Bangalore and may be more effective, given the availability of talent and cost. Mr. Ngiam’s article here also reinforces the view.

Singapore needs an urgent makeover. One key aspect is to reduce its dependence on MNCs, support more local companies, reduce the role of the GLCs and reduce business costs. It is not that Singapore doesn’t pursue initiatives here, but it has a strong preference for MNC courting.

What is interesting is that for the first time, the Straits Times actually carried the candid views of the International Advisory Committee of the EDB. Normally you see PR speak, but this time some truths and homilies have also come about.

Guess, things are changing.

April 6, 2009

IBM — Sun deal fails?

Filed under: Business,Competition,Model — Subbaraman Iyer @ 11:35 am
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IBM withdrew its $7 billion offer for Sun reports the NY Times which reports that Sun believed the offer was too low and the offer was rejected by the Sun Board. The Wall Street however is not so categorical about the rejection and believes the deal will go through.

I wrote earlier that IBM doesn’t need Sun. It is Sun that needs IBM. Sun has been in the market for a long time courting probable suitors.

The failure of the deal will hurt Sun more than anyone. Customers will be wary of purchasing Sun gear. Moreover the management will be questioned about their commitment to a go-it-alone strategy. Hence Sun may accept the lower price offered by IBM. Sun doesn’t have much choices left.

My assessment is that Sun’s problems may actually worsen after the failure of the talks. IBM comes out unscathed.

April 3, 2009

Sad about Silicon Graphics

A Silicon Valley icon disappears — unwept, unhonored, unsung. Thanks to my analyst friend for the tip.

Silicon Graphics which made the hottest workstations for high end applications and built awesome machines for making movies was sold for just $25 million to server maker Racker Systems.

I almost wanted to cry because I have seen the power of their technology when I used to be marketing CAD/CAM systems 20 years ago and often competed with them. SGI machines were used to make movies. Jurassic Park and Terminator 2 were made on SGI machines.

Silicon Graphics was founded by the famous Dr. Jim Clark who subsequently left the company and founded Netscape.

There have been bigger failures, but they still were acquired for billions, not for something like $25 million.

I did see it coming even 2 years ago when I wrote about the lessons that one can draw from its road to bankruptcy. But is eventual sale for such a miniscule amount at a bankruptcy court is definitely saddening.

Well, guess that’s business!

April 1, 2009

Gideon Yu — the Facebook CFO quits suddenly!

A veteran CFO of one of the hottest companies at a critical juncture quits. Such abrupt high level departures at a critical stage indicates more things than it meets the eye.

Mr. Gideon Yu is a star CFO with stints in Google, YouTube and Yahoo and was responsible for raising capital, which Facebook needs as I wrote here.

I guess his leaving has something to do with the fund raising as the latest news in NY times seems to indicate.

The quote by the Facebook spokesman is classic PR speak: “Gideon Yu, said the company did not need to raise more cash to get to profitability but would entertain the idea. “It’s all going to be a function of valuation and a valuation we are happy with,” he said.

March 4, 2009

Innovation hot spots

Filed under: Business,Innovation — Subbaraman Iyer @ 1:17 am
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Mckinsey in partnership with the World Economic Forum has created an “Innovation Heat Map” by identifying factors that are common to successful innovation.

Not surprisingly, the Silicon Valley comes as a clear leader. And numerous countries like Singapore have tried to emulate the Valley. Bangalore, often  called the Silicon Valley of the East and it is not even represented in the Innovation heat map.

I am equally surprised that none of the countries in Asia — barring Japan and Taiwan appear on the Innovation heatmap. I would have expected Seoul, Bangalore and maybe even Shanghai to appear on the map.

This map seems to contradict another report released by the Information Technology and Innovation Foundation  which found that the U.S. was ranked sixth based on their indicators.

Singapore has been spending billions of dollars (all tax payers money) to spur innovation. And I belong to the skeptics community often wondering whether this  is the right approach. Surprisingly Singapore doesn’t seem to be anywhere in the Mckinsey’s Heat map.

I have always been skeptical about these rankings because there is always a risk of causality often being mistaken for co-relationships.

And on a more operational note, with global collaboration and work being distributed to talent spots, how is it possible to identify the exact nature of contribution from each location.

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