technology and research for development lalith gamage president/ceo sliit chairman accimt
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Technology and Research Technology and Research for Developmentfor Development
Lalith GamageLalith Gamage
President/CEO SLIITPresident/CEO SLIIT
Chairman ACCIMTChairman ACCIMT
Sri Lanka’s VisionSri Lanka’s Vision
Double our GDP to $4000 by 2016Double our GDP to $4000 by 2016
IT/BPO Industry - $ 2 billion by 2016 and IT/BPO Industry - $ 2 billion by 2016 and 100,000 professionals100,000 professionals
Tourism Industry - $ 3 billion by 2016 Tourism Industry - $ 3 billion by 2016 and 500,000 employmentand 500,000 employment
Mahinda Chinthanaya - Accelerate Mahinda Chinthanaya - Accelerate Research and Development to establish Research and Development to establish 5 Hubs by 20205 Hubs by 2020 Aviation hub, Maritime Hub, Commercial Aviation hub, Maritime Hub, Commercial
Hub, Energy Hub, Knowledge HubHub, Energy Hub, Knowledge Hub
Man Power ContributionMan Power Contribution
R&D
Semi Skilled
ContributionContributionManpowerManpower
US$ 5 bn
US$ 3 bn
US$ 0.5mn
IT Industry: Case StudyIT Industry: Case Study
Insignificant in the late 1990s early Insignificant in the late 1990s early 2000s2000s
Embarked on an Eco-system (Cluster) Embarked on an Eco-system (Cluster) based approachbased approach ManpowerManpower InfrastructureInfrastructure Business and legal environmentBusiness and legal environment Marketing and Image Building Marketing and Image Building Centres of Excellence (R & D)Centres of Excellence (R & D)
Competitiveness Competitiveness StrategyStrategy
• Infrastructure• Education & Training• Business Environment• Legal Issues• Marketing & Image Building
• Quality• Innovativeness• Strengths/Niche• Skills
• Centers of Excellence• Business Incubators• Research and Development
• Build Confidence
(Make it Competitive)
• Create Competence
(Sustain Competitiveness)
• Address Issues
(Create the Environment)
IT Industry: Case StudyIT Industry: Case Study
Today IT industry is one of the fastest Today IT industry is one of the fastest growing industriesgrowing industries
55thth Largest export earner for the country Largest export earner for the country Annual exports are worth around $400 Annual exports are worth around $400
millionmillion Aims to earn $2 billion by 2016Aims to earn $2 billion by 2016 Ranked 16Ranked 16thth in 2009 in 2009 Addressable market is around $350 billionAddressable market is around $350 billion
Success is due to collective efforts ofSuccess is due to collective efforts of Universities/Institutes – developed and Universities/Institutes – developed and
offered the relevant programs and carry out offered the relevant programs and carry out researchresearch
Infrastructure providers – Private sector Infrastructure providers – Private sector understood the industry requirements and understood the industry requirements and service levels and increased capacityservice levels and increased capacity
ICTA – policy, research on requirementsICTA – policy, research on requirements SLASSCOM – promotes research, centres of SLASSCOM – promotes research, centres of
excellenceexcellence Industry – provides placements, scholarships, Industry – provides placements, scholarships,
funds research, curriculum dev.funds research, curriculum dev.
Technology and Research for Technology and Research for DevelopmentDevelopment
Technology and Research as an enablerTechnology and Research as an enabler Product ImprovementProduct Improvement
Process ImprovementProcess Improvement
Compare IT industryCompare IT industry
Build competitiveness, EfficiencyBuild competitiveness, Efficiency
Developing Research as an IndustryDeveloping Research as an Industry
Research and innovation to build new Research and innovation to build new companiescompanies New ProductsNew Products
ChallengesChallenges
Industry is not geared to seeking R & D Industry is not geared to seeking R & D expertise from research institutionsexpertise from research institutions
R & D institutions carry out their R & D institutions carry out their research without placing emphasis on research without placing emphasis on economic and/or social value creationeconomic and/or social value creation
Lack of Eco-system based R & DLack of Eco-system based R & D IndustryIndustry EntrepreneursEntrepreneurs InvestorsInvestors R & D InstitutionsR & D Institutions
ChallengesChallenges Lack of entrepreneurial culture in the Lack of entrepreneurial culture in the
research communityresearch community Lack of mechanisms to encourage Lack of mechanisms to encourage
innovation, commercialization of researchinnovation, commercialization of research Business plan competitionsBusiness plan competitions IncubatorsIncubators
Non availability of well established Angel Non availability of well established Angel and VC fundsand VC funds
Inability to recruit and retain best and the Inability to recruit and retain best and the brightest due to poor compensationbrightest due to poor compensation
Overcoming ChallengesOvercoming Challenges Industry, Research Institutions, Industry, Research Institutions,
Government Interaction – MarketplaceGovernment Interaction – Marketplace Development of Eco-systemsDevelopment of Eco-systems
Industry clusters – Electronics, Biotechnology, Industry clusters – Electronics, Biotechnology, NanotechnologyNanotechnology
Centres of excellenceCentres of excellence Mechanisms for commercialisationMechanisms for commercialisation
Industry liaison cellsIndustry liaison cells Entrepreneurship trainingEntrepreneurship training Business plan development conceptsBusiness plan development concepts
Establishment of funded research chairs Establishment of funded research chairs
What is The Product/Service?What is The Product/Service? What Technological/Innovative Developments?What Technological/Innovative Developments? Will there be any Intellectual Property?Will there be any Intellectual Property? How do you obtain technical input? – Technical How do you obtain technical input? – Technical
TeamTeam Market Scope?Market Scope?
Key attributes of the target market (size with segmentation, Key attributes of the target market (size with segmentation, buying criteria, behaviour, etc.)? buying criteria, behaviour, etc.)?
What are the market trends and why? What are the market trends and why? How will you build your market? How will you build your market?
Market Need?Market Need? Why will customers purchase your Product/Service?Why will customers purchase your Product/Service?
Distribution ChannelsDistribution Channels How or who will sell the Product/Service?How or who will sell the Product/Service?
What is The Product/Service?What is The Product/Service? What Technological/Innovative Developments?What Technological/Innovative Developments? Will there be any Intellectual Property?Will there be any Intellectual Property? How do you obtain technical input? – Technical How do you obtain technical input? – Technical
TeamTeam Market Scope?Market Scope?
Key attributes of the target market (size with segmentation, Key attributes of the target market (size with segmentation, buying criteria, behaviour, etc.)? buying criteria, behaviour, etc.)?
What are the market trends and why? What are the market trends and why? How will you build your market? How will you build your market?
Market Need?Market Need? Why will customers purchase your Product/Service?Why will customers purchase your Product/Service?
Distribution ChannelsDistribution Channels How or who will sell the Product/Service?How or who will sell the Product/Service?
Research to Business (Plan)Research to Business (Plan)
Competitive SituationCompetitive Situation Why will your product/service "beat" the competition?Why will your product/service "beat" the competition? Barriers to competitionBarriers to competition Patent or copyright protectionPatent or copyright protection Time to engineer a new productTime to engineer a new product
Management CapacityManagement Capacity Highlight the key credentials of the management teamHighlight the key credentials of the management team What key skill sets are required?What key skill sets are required? Does management regularly consult with market-based Does management regularly consult with market-based
advisors or experts? How?advisors or experts? How? FinancialFinancial
How will your revenue model enhance market How will your revenue model enhance market acceptance in the target market? How are you going to acceptance in the target market? How are you going to price your service/product?price your service/product?
How much money is required? How much money is required?
Research to Business (Plan)Research to Business (Plan)
Business/Product Development Business/Product Development ProcessProcess
Product Prototype
Product Prototype
Business/Product Development Business/Product Development ProcessProcess
Source of CapitalSource of CapitalA
mou
nt
of
Cap
ital
Age of Company
Angels
Angel Funds
Public Markets
Venture Capital
Strategic Investors
Founders, Friends and
Family
Govt.
What Investors WantWhat Investors Want
Groundbreaking TechnologyGroundbreaking Technology World-class ProductWorld-class Product Revolutionary Business ModelRevolutionary Business Model Empowered TeamEmpowered Team Visionary/Renowned BoardVisionary/Renowned Board Attractive ReturnAttractive Return 3 I’s: Intensity, Integrity, Immediacy3 I’s: Intensity, Integrity, Immediacy 3 G’s: Goodness, Greatness, Greed3 G’s: Goodness, Greatness, Greed
AngelsAngels Fun, Interesting Opportunity, A willing protégéFun, Interesting Opportunity, A willing protégé
10 investments of 10 investments of Rs. 2.5MRs. 2.5M each = each = Rs.25Rs.25MM
1 big payout in 5 years, 50 x 1 big payout in 5 years, 50 x Rs.2.5Rs.2.5 = = Rs. 125Rs. 125M M
VCsVCs 10 investments of 10 investments of Rs. 25MRs. 25M each = each = Rs.25Rs.250M0M
2 big payouts in 3-5 years, 10 x 2 x 2 big payouts in 3-5 years, 10 x 2 x Rs.25Rs.25M = M = Rs. Rs. 500500M M
Angels Vs VCsAngels Vs VCs
Cap Table (Ideal)Cap Table (Ideal)
StartUpStartUp Angel Angel RoundRound
VC VC RoundRound
ExitExit GainGain
Founders/Founders/MgmtMgmt
$$~0 ~0 (100%)(100%) $~$~0 (75%)0 (75%) $~$~0 0
(60%)(60%) $$60M 60M 1000X1000X
AngelsAngels $$500K 500K (25%)(25%)
$$500K 500K (20%)(20%) $$20M20M 40X40X
VCsVCs $$2M 2M (20%)(20%) $$20M20M 10X10X
Market CapMarket Cap $$~0~0 $$2M2M $$10M10M $$100M100M
Cap Table - Sri Lankan IT Cap Table - Sri Lankan IT CompanyCompany
StartUpStartUp Angel Angel RoundRound
VC VC RoundRound
ExitExit GainGain
Founders/Founders/MgmtMgmt
Rs.~Rs.~0 0 (100%)(100%)
Rs.~Rs.~0 0 (75%)(75%)
Rs.~0 Rs.~0 (60%)(60%) Rs.300M Rs.300M 1000X1000X
AngelsAngels Rs. 2.5M Rs. 2.5M (25%)(25%)
Rs.2.5M Rs.2.5M (20%)(20%) Rs.100MRs.100M 40X40X
VCsVCs Rs.20M Rs.20M (20%)(20%) Rs.100MRs.100M 5X5X
Market CapMarket Cap Rs.~Rs.~00 Rs.10MRs.10M Rs.100MRs.100M Rs.500MRs.500M
Incubating SuccessIncubating Success
Access to InfrastructureAccess to Infrastructure Access to PeopleAccess to People Access to FundsAccess to Funds Access to Access to Right EnvironmentRight Environment
Incubator Features Incubator Features
A/C SpaceA/C Space Dedicated Internet ServicesDedicated Internet Services Quality Regulated PowerQuality Regulated Power Communication Facilities Communication Facilities Office Furniture and Equipment Office Furniture and Equipment Secretarial services Secretarial services Financial Services Financial Services
Access to Infrastructure Access to Infrastructure
Technical ExpertsTechnical Experts ResearchersResearchers DevelopersDevelopers Students Students Business AnalystsBusiness Analysts StrategistsStrategists Venture CapitalVenture Capital Business Plan development to seek funds Business Plan development to seek funds
from other sourcesfrom other sources
Access to Human Resources & Access to Human Resources & Funds Funds
Entrepreneurship Training – Seminars, WorkshopsEntrepreneurship Training – Seminars, Workshops
Technical TrainingTechnical Training
Business Skills Development – Monitoring and MentoringBusiness Skills Development – Monitoring and Mentoring
Marketing of Resident Companies Marketing of Resident Companies
Market Plan FormulationMarket Plan Formulation
Marketing through known contactsMarketing through known contacts
Networking with Global CompaniesNetworking with Global Companies
Linking up with Universities and IndustryLinking up with Universities and Industry
Consulting on strategies at various stages: Launch, Consulting on strategies at various stages: Launch, Growth and Harvest of businesses. Growth and Harvest of businesses.
Access to Right Environment Access to Right Environment
Technology and Research are essential for Technology and Research are essential for our country’s developmentour country’s development
Develop R & D as an enabler and to create Develop R & D as an enabler and to create new companiesnew companies
Need to address the issues such as Need to address the issues such as Industry – Research Institution InteractionIndustry – Research Institution Interaction Capacity Building of Research InstitutionsCapacity Building of Research Institutions Funding SourcesFunding Sources Entrepreneurial culture developmentEntrepreneurial culture development Mechanisms for CommercialisationMechanisms for Commercialisation
Development of a Eco-system (cluster) based Development of a Eco-system (cluster) based approach to R & Dapproach to R & D
Technology and Research are essential for Technology and Research are essential for our country’s developmentour country’s development
Develop R & D as an enabler and to create Develop R & D as an enabler and to create new companiesnew companies
Need to address the issues such as Need to address the issues such as Industry – Research Institution InteractionIndustry – Research Institution Interaction Capacity Building of Research InstitutionsCapacity Building of Research Institutions Funding SourcesFunding Sources Entrepreneurial culture developmentEntrepreneurial culture development Mechanisms for CommercialisationMechanisms for Commercialisation
Development of a Eco-system (cluster) based Development of a Eco-system (cluster) based approach to R & Dapproach to R & D
Way ForwardWay Forward
Thank you