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Building a Culture of Innovation through a Philippine Technology Diaspora

 

Opinion

 

Silicon Valley Culture in the Philippines

by Paco Sandejas, PhD

(Previously published in Computerworld Philippines Dec 18, 2002)

 

“Silicon Valley is the only city in the world that doesn’t aspire to be Silicon Valley”. This is a phrase repeated often when one hears of yet another country’s aspirations to bolster their IT based industries by creating an IT park/High-Tech Cluster/Zone of Innovation, or whatever they choose to call it.  Every government dreams of having an engine of economic growth similar to Bangalore, which is growing at an annual rate of 10% and will surpass Bombay as India’s wealthiest city by 2010, starting today with the activity of 25,000 engineers who will grow to over 100,000 and will generate over $15Billion in GDP (BusinessWeek, November 11, 2002).

 

On the other hand, you have laid-back Northern California – or so it appears to be. Not even conscious about it, the City by the Bay just happens to be the IT City, in both senses of the word “IT”. Cutting to the bottom line, I would like to provoke discussion by saying that it is so, mainly because it is just such a cool place to live and work. So many people, including engineers and the highest density of Nobel Laureates, love the place and make it their home.  With these people and a confluence of many other also important parameters, the San Francisco-San Jose Bay Area has become Silicon Valley and the IT center of the world.

 

Even companies from around the world like Ericsson, Nokia, or Sony choose to set up important R&D centers in Silicon Valley. Why? Because they know that they can’t be left out when new technologies might arise from Stanford, Berkeley or other labs in the area, such as when lead engineers leave a Cisco to form a new start-up.

 

Annalee Saxenian, a renowned author on the Silicon Valley phenomena, gives a very succinct definition of a (High-Tech) Industrial Cluster:  “A regional network-based industrial system that promotes collective learning and flexible adjustment to changed conditions among specialist producers of complex, related technologies.”  She has also stated that the institutional and cultural underpinnings of a successful cluster are:

 

a)  supportive social structures – particularly entrepreneurship and social & professional networks

 

b)  institutions – educational institutions and their links with business, business associations, fora for the exchange of information, standards’ committees and the structure and organization of business enterprises

 

c)  collaborative practices – large scope of informal exchange of information and experience, and formal collaborative arrangements such as cross licenses, second sourcing, technological agreements and joint ventures.

 

While we can dwell on various aspects of her definition, I would like to emphasize how GEOGRAPHIC PROXIMITY TO TECHNOPRENEURS is common to all her points above and a key take away lesson for us in the Philippines especially since it will make or break the culture of collective learning.

 

 

“..I would like to emphasize how GEOGRAPHIC PROXIMITY TO TECHNOPRENEURS is common to all her points above and a key take away lesson for us in the Philippines..”

minutes away and makes a pitch to a potential VC for her second round.  Sitting with them is their first round VC whose offices are next door.  After promising Potential VC that she will present more details to his technical adviser at SUN Microsystems (10 minutes away), she zooms to a Café near Stanford University to meet a potential recruit for VP of Marketing. The candidate drives over in 25 minutes from his present job at Cisco.  Later on, she drives an hour away to UC Berkeley to listen to a Ph.D. thesis defense by one of the star students in the communications space.  There might be something in the thesis that can be commercialized in her product. After the talk, she dines with her Investment Banker boyfriend and complains about competition in the talk because she saw her colleagues from Berkeley were also in the room together with other VC’s from a rival group. There were also people from Cisco, Nortel, Juniper, and many other companies hovering around that room.  Her boyfriend tells her not too worry because the buzz around town is that the IEEE standards committee seems likely to vote on a standard proposed by her group.  They have some champagne then head over to San Francisco in an hour to watch John Mayer perform live at the W.  At the concert, she bumps into the founder of Gudha2 who offers to license his software to her. The next day, she joins her top engineers for an off-site planning session in a beautiful hotel by the Pacific Ocean, 40 minutes away. They’ve invited her neighbor Steve Jobs to give them a pep talk on how to beat the big established players.  On Sunday, she flies to Taiwan for two days of emergency meetings with TSMC who are having a problem with the yields on their chips. If she is lucky, she can wrap up the meeting in a day and be back Tuesday night. If not she won’t be able to personally deliver her company presentation to ChaseStanley’s Technology Conference in San Francisco on Wednesday afternoon.

 

Sounds like fiction? Not quite. That is exactly how things work in the valley. That is how companies are started in so short a time and how they create successful products with a amazing mix of novel technologies fresh out of the labs. That is why ambitious engineers who want to really make it and create something that can affect the world, brave the very expensive living standards of the Valley and chose to move their careers and families to the Bay Area.

 

 

“…The KEY in my opinion is building a mini-Silicon Valley that can in some way, entice the IT players of the Philippines and imported from abroad to work together in one or two places. Why one place? For various reasons. Probably, most important, because we don’t have enough financial and human resources to support more…”

above are enabled to happen. It is also a magnet for our balikbayan imports and foreign partners.  As it is today, industry or the SEIPI companies are in CALABARZON and  have to think more than twice whether or not to make a 2-3 hour trip to consult with their genius friends in Diliman. The software guys in Libis hardly know any hardware guys. They date the pretty call center girls! The VC’s are in Makati and they hang out with the jobless stock brokers.  The telco providers and banks are in Makati or Ortigas, at least an hour away from the others and oblivious to the fact that we have engineers that can program or even build their boxes. Government is in another world, Malacanang, Manila.

 

Sad to say, even if the technologies of the telephone and video-conferencing will help us bridge the distance, more often that not, physical proximity and presence is needed to encourage interaction and to make it a more meaningful  and productive one.  Since, our road and traffic control infrastructure is over-stretched and it will take awhile for our government to solve this. We technopreneurs have to band together and decide on a place where we can all work and live within 30 minutes of each other and going to meetings will take up less than 30 minutes. Ideally, we can walk to them! If we are enough who agree, if companies and careers are staked on this, and if we provide the specs to the developers, than it is certain that they will be willing to develop such a mini-city for technopreneurs.  We will be the anchor tenants for this mini-Silicon Valley.  Finally as an anchor to this anchor and as a enticement for technopreneurs to band together, in the past year and a half, I have joined a wonderfully patriotic and enlightened group of engineers and IT professionals in pushing for the creation of a Center for Computing and Communications, which will be the educational, training and RD&E institution that can anchor such a cluster of engineers, companies, and investors.

About the Author :  Paco Sandejas completed his BS Applied Physics degree at the UP National Institute of Physics, and his PhD (specializing in MEMS fabrication) from Stanford University. He was formerly connected with Applied Materials, Hambrecht &  Quist and was also a co-founder of the Brain Gain Network. Paco now runs his own venture capital firm, NarraVC. He is married and has two kids.

 

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