“High Technology Business Development in the Global Context: The SE-FUMEC-TechBA

Program of Mexico”

13-15 February 2007

Washington, DC USA

Guillermo Fernández de la GarzaFUMEC President and CEO

Global Forum:“Building Science, Technology, and Innovation Capacity for

Sustainable Growth and Poverty Reduction”Sponsored by The World Bank in cooperation with

CIDA, DFID, GRA, IADB, SIG, UNCTAD, and UNESCO

Basic ideas behind TechBA

• Technology intensive businesses (TIBs) MUST have a global vision in relation to markets, technology and financial strategies

• TIBs profit from the interaction with different ecosystems, cooperation with specialized organizations and companies of regions that have a culture and a broad experience in developing similar type of businesses

• Several countries have had programs to facilitate the development of their technology companies through partnerships with consultants, venture capitalist, universities and local companies in the Silicon Valley and in other innovation regions

TechBA History

• The Technology Business Acceleration program (TechBA) was proposed in 2004 by FUMEC to the Ministry of Economy of Mexico (SE) after an analysis of the Silicon Valley experiences of other countries

• The Ministry of Economy of Mexico recognized the importance of technology intensive businesses as a spearhead of an innovation strategy to accelerate the development of competitive capabilities in key sectors of the economy.

• The Ministry saw an opportunity when FUMEC presented the idea to set up a program to work with key organizations of advanced innovation regions in the United States, Canada and other countries to accelerate the development of

– technology intensive businesses

– Specific niches and regions where these businesses in Mexico are coming from.

Strategic Partnership

• The Ministry of Economy of Mexico chose FUMEC as a strategic partner that:– brings into the program strong technology and business networks – understands the key cultural and economic issues involved in

developing successful international endeavors

• Another key element of the TechBA Program has been the selection of ecosystems with high innovation drive, such as Silicon Valley in California, Austin in Texas , Montreal in Quebec and Madrid in Spain.

• In each region, TechBA partners with recognized organizations that have a proven track of successful results in accelerating innovative companies– The Enterprise Network of Silicon Valley, – IC2 from the University of Texas at Austin, – Inno-centre in Montreal and – Parque Científico de Madrid in Spain.

• The Foundation was created in 1992 as a bi-national non-governmental body, to promote and support science and technology collaboration between both countries.

• The Foundation:– Articulates organizations, programs and businesses to develop niches

and innovation regions

– Develops mechanisms that become independent and self sustaining

• FUMEC is fully credited as a bi-national organization and is a leading contributor to the economic and social development of both countries through collaborative wide scope programs in science and technology, focused towards: – Development of talent at all levels of the educational system

– Competitiveness of key North American sectors, including the emergent high growth entrepreneurial sector

– Border-related major social and economic issues

• The Foundation has a Board of Governors that directs and oversees its activities, and an endowment built by contributions from both Federal Governments.

FUMEC History

Program of the Ministry of Economy of Mexico and FUMEC:

– Advices and Mentors Small Mexican Technological Businesses (MIPyMEs) to have fast growth in Mexico and in other countries.

– Opens global markets of high value to TIBs in sectors and regions with strong innovation potential in Mexico.

– Facilitates the generation of thousands of new quality jobs both directly and indirectly in the production chains and in the specialized niches where the TIBs participate

What is TechBA (Technology Business Accelerators)

TechBA Objectives

• To provide an environment that encourages the international development of Mexican technology based companies by helping them to:

– Capitalize their intellectual property and business skills by reorienting their capacity to global markets.

– Interact with high-tech ecosystems in order to reach milestones in terms of sales, alliances and access to angel and venture capital investment.

– To incorporate Mexican high value added companies as part of integrated, global supply chains.

– To strengthen business intelligence mechanisms and interactions between organizations and individuals as they create new business and collaboration opportunities.

TechBA focus

• TechBA focuses on innovative companies related to high-tech sectors with strong presence in the global technology markets, such as:

– Information and Communication Technologies

– Biotechnology and Bioinformatics

– Biomedical Devices

– Microsystems,

– Advanced Materials

– Multimedia and Animation

– Education Services

TechBA recruitment, selection and acceleration process

Acceleration

TechBA Annual call

for companies

Orientation workshop

TechBA Market Finder

Selection throughInternationalcommittee

Preacceleration

Regions Niches

Maturationprocess in

Mexico

Impact over RegionalInnovation Systems in Mexico

Consultantswith

global vision

NicheIntelligence

Linkagesbetween

ecosystems

TechBANetwork

Companies integratedto internationalEcosystems: * Sales * Alliances * Investment * R&D

Companies in Mexico that:•Integrate a global vision into their national markets•Prepare to export technology products and services

Vision andculture of

globalbusinesses

• Participation of 508 companies in three evaluation and selection rounds

– Alliances with federal and state governments, universities, as well as industry organizations to identify potential candidates and run orientation workshops

– Analyses of technological capacities in research centers with commercialization potential and synergy creation with incubators and entrepreneurial programs

– Identification of spin outs & spin offs from transnational corporations

• Selection of 119 companies

Calls for companies

Geographical origin of TechBA companies

States SVAS MR MD T

México DF 21 4 8 6 39

Nuevo León 7 13 1 1 22

Jalisco 8 6 1 3 18

Guanajuato 4 3   1 8

Baja California 6       6

Querétaro 1 2 2   5

Puebla 3 2     5

Aguascalientes 1 3 1   5

Sonora 3 1     4

Tamaulipas       1 1

Michoacán 1       1

Chihuahua 1       1

Morelos   1     1

Coahuila       1 1

Estado de México 1 1      

15 states with TechBAcompanies

Pre-acceleration and Market Analysis

Pre-acceleration process

• Goal: To strengthen the capacity of regional innovation systems to create and promote high growth potential companies.

– Awareness of global markets and strategies to penetrate them

– Support in defining high value added business proposals

– Strengthening of local consultancy skills in global business development

TechBA Market Finder Tool• Description and evolution of the company• Analysis of technological and entrepreneurial profile• Business model• Viability of the proposal in international markets• Acceleration goals

Short history of TechBA

Clasificación de

Empresas TECHBA

Nov 2006

Total 105

Alimentación, salud y biotecnología 12Manufactura

23

Servicios 82

Alimentación 5

Biotecnología 3

Dispositivos médicos 4

Electrónica, agrícola y automotriz 9

Electrónica 3

Química 2

Automotriz 2

Maquinaria agrícola 2

Transporte 2

Multimedia 7

Visualización 3

Videojuegos 2

Animación 2

Software embebido 4

Automatización 2

Automatización, Multimedia y Software embebido 13

Software 69

Software empaquetado 19

Servicios a la medida 10Desarrollo “Offshore” 6

Desarrollo a la medida 4

Programas educativos 5

Sistemas de apoyo a decisiones 5

Integración de sistemas y proveedores de

servicios 7

Integración de sistemas 5

Proveedores de servicios 2

Seguridad 9Biometría 5

Manejo de documentos 4

Servicios a la medida/ software empaquetado

33

Logística 4

Automotriz y energía 4

Finanzas y seguros 7

Sectores específicos

4

Hoteles 1

Telecomunicaciones 1

Publicaciones 1

Salud 1

Software empresarial

14Sistema de responsabilidad

1

Web 2

Wireless 4Mercadotecnia y ventas 2

Sistemas administrativos 3

Recursos humanos 2

Lessons : Global Acceleration of TIBs works

• Mexican technology companies can be successfully accelerated through partnerships with companies and organizations in regions where there is already a strong and diverse global business-technology ecosystem.

• This benefits Mexico with the local growth of the companies involved and benefits also the regions where the accelerators are located.

• After two years of operation of the Silicon Valley TechBA:

– 55 Mexican technology companies have been working in SV TechBA

– about half of them have already being incorporated in the United States and have offices either in the TechBA or in other U.S. and Canadian locations.

– Their international market adds already 17% to their sales in Mexico

– They have increased in 8% their total employment because of their international sales.

– Normally 2 to 5 Mexican high level employees of each one of these companies are living in the United States

Lessons : Locate at advanced innovation regions and partner with experienced organizations

• Selection of ecosystems with high innovation drive, such as – Austin in Texas ,

– Madrid in Spain.

– Montreal in Quebec and

– Silicon Valley in California,

• Partner with recognized organizations that have: – A proven track record of successful results in accelerating innovative

companies.

– High visibility and recognition in the local technology business ecosystem

– Interest in international activities and full awareness of the benefits for their region coming from the new collaboration opportunities among companies and organizations in Mexico and in their region

• Partners like: IC2 from the University of Texas at Austin, Parque Científico de Madrid in Spain, Inno-Centre in Montreal and, The Enterprise Network of Silicon Valley

• Interact with the local ecosystem to: – Accelerate specific technology based companies, by helping

them to:• Capitalize their intellectual property and business skills by

reorienting their capacity to global markets.• To reach milestones in terms of sales, alliances and access to angel

and venture capital investment.

– Facilitate, in the country sponsoring the program, the development of global technology business ecosystems in the regions with better capabilities to take advantage of these interactions

– Strengthen collaboration between organizations promoting innovation in specific niches in areas like:

• Business intelligence mechanisms • Fairs and TechShows• Training and capacity building

Lessons : Interact fully with the local ecosystem

Lessons : Focus on high growth potential niches

• Importance to focus on innovative companies in high growth potential niches related to high-tech sectors with strong presence in the global technology markets, such as:– Information and Wireless Technologies

– Biotechnology and Bioinformatics

– Biomedical Devices

– Microsystems,

– Advanced Materials

– Robotics

– Multimedia

– Education Services

Lessons : World Class Selection Process of Companies

• To ensure the quality and readiness of the companies that become members of global acceleration programs

– Organize a selection process with a committee, comprised of international and local experts in business, technology and venture capital to select the best companies.

– As part of the selection process insure that the companies participate in workshops to receive guidance on how technology businesses are conducted in the international arena.

– Insure that there are validation and feedback processes to the companies, their products and globalizations strategies using integrated validation mechanisms like the “TechBA Market Finder methodology”.

Lessons: Collaboration with regional and niche innovation programs

• Success of the acceleration process relies on the quality of the companies that have the potential to grow in the global technology business environment

• These companies emerge mainly from programs in innovation regions and in priority niches of high growth potential sectors

• Global acceleration programs of technology companies require, in the country sponsoring the program, strong collaboration with the leading and operational structures of innovation regions and priority niches

• These interactions facilitate the development of the “business –technology ecosystems” that are essential for the creation and growth of many more technology companies.

Lessons: International collaboration for “Global Acceleration of TIB” also broaden S,T & R cooperation

• These programs facilitate broader science, technology, education and business collaboration among countries.

• Building up closer ties in high technology provides immediate economic results and also develops synergies among

– universities,

– research institutions,

– governmental agencies and

– business organizations,

• Starting from the grass roots and moving up to the state and national levels

Conclusions:

• The TechBA Program is stimulating growth and innovation in Mexico and in our partnering countries.

• It is specially important for Mexico because it:

– Accelerates business and technological development of participating Mexican companies

– Provides global business and technology intelligence and networking to key Mexican technology business sectors

– Supports the development of clusters and acceleration processes in Mexico

– Focuses in value added and intellectual property creation with products for the global markets

– Promotes the kind of global competitive business culture that is highly needed in the XXI century