Economic development

Technology in and for developing countries. This includes both technology industries as a source of economic growth, and technology use for education and other purposes. Special focus on Lebanon, in connection with the TechLeb conference.

May 23, 2006

Incubator possibilities and essentials in the developing world

I came away from TechLeb with some very interesting mixed messages about incubators, science parks, technology trade zones, whatever. (Jacques Masboungi’s talk on the subject was particularly interesting.) On the one hand, they seem to be one of the best things governments can do to foster technology development. On the other hand, they seem to be one of the easiest ways governments can screw up. And since no two projects are the same, it can be hard to generalize from experience.

Given all that, I shall now proceed to theorize about how to construct an environment for fostering technology development. And please note that government does not have to play a leading role. Instead, universities or even private entrepreneurs can and quite possibly should take the lead. Read more

May 22, 2006

Government initiatives that went awry for technology development

The Q&A session to my TechLeb panel did produce a few interesting observations. Perhaps the most instructive were when I asked for “unsuccess” stories of government intervention — things governments tried to aid tech businesses that didn’t work out so well. Most of the answers all boiled down to the same thing — throwing money at ill-conceived ideas. These could be economically-motivated research projects that never produced much of economic value — Japan’s Fifth Generation Computer Project is a prime example, but there are many similar developed-world fiascos. (Basic research and even military research seem to produce more benefits by serendipidity than economically targeted research does in total.) Or they could be incubators and science parks to which nobody much ever came. But basically, most of the answers amounted to over-optimism about specific initiatives.

Most of the rest of the answers were of the nature “Well, in addition to X and Y, government should also have done Z.” But that’s a story for other posts.

May 22, 2006

Government initiatives needed for technology development

There’s a general consensus among those who know more about developing countries than I do that the ideal scenario for technology-led economic development is a public/private partnership. Even so, I think there are only two absolute requirements for government participation:

1. Removal of barriers

2. Education

And of course in some countries, even higher education can be provided by the private or at least non-governmental sector.

To see why I believe that’s all that’s necessary, just look at some success stories. What else did the US government do? Yes, military research, but that’s really just another form of education. Ditto Israel. India’s government didn’t do much except fund the IITs (Indian Institute of Technology) and create some zones in which barriers to commerce were removed a few years faster than they were in the rest of the country. Read more

May 22, 2006

After TechLeb

Well, TechLeb has come and gone. Due to the tremendous effort and talent of the organizers, it achieved its two main goals, which were 1. To have a vehement discussion between the Lebanese tech entrepreneur community and the government, specifically on the subject of telecom prices and 2. To generally pull together stakeholders in the Lebanese tech sector. Minister Azour’s wish that TechLeb prove to have been a watershed event in Lebanon’s history may yet be granted.

My own panel didn’t work out quite so well, because I overoptimistically let the time be divided among five speakers, and furthermore failed to anticipate a variety of interruptions. These ranged from ministerial phone calls (I’ve never seen John Cullinane smile so broadly as when Minister Azour was lambasted by a self-styled “angry entrepreneur”), to an MC who decided to take control of Q&A from me, to a panelist who talked at repeated length about off-topic matters. (Yes, I’m irate about parts of that. No, it shouldn’t affect anybody’s overall highly favorable opinion of the conference.)

Anyhow, there were three talks on my panel in which great, on-topic points were made, by Kevin Carroll (VP of IDA Ireland), Anil Khourana, and John Cullinane. I hope I made a useful observation or two as well. I particularly wish there had been more time for Anil’s talk, as he offered not just the experiences of a huge and hugely important country (India), but also well-analyzed insight into the concerns of developing countries in general. And there were other interesting things to be learned from sessions and private conversations as well. I’ll try to work all this into a series of posts soon.

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May 3, 2006

The Talent/Innovation Cycle (Keys, Part 2)

Before the economy got truly global, the role of entrepreneurs in economic development was open to debate. If Henry Ford hadn’t created the automobile mass market, would there have been one anyway? Well, he didn’t sell to Europe, and they had one there too, so the answer is evidently “Yes.” But while certain industries’ growth is almost inevitable, any given company’s success is in no way foreordained. Rather, that success is due in huge part to its leaders and/or engineers, and their ability to just competitively clobber all the other company leaders and engineers striving to succeed in the same markets.

And the success of any particular country or region is, of course, hugely dependent on the success of the largest companies in it. First of all, a single company can make an appreciable difference all by itself. Finland has gone from a reliance on forest products to being a technology industry leader, almost solely because of one huge company: Nokia. Second, successful companies (or particularly interesting failures) spawn others, because of the employees they spin out, the suppliers they help strengthen, and so on. Most famously, this is the Silicon Valley phenomenon.

So what can countries do to improve their chances of technology entrepreneurial success? Read more

May 1, 2006

Keys to technology-driven economic development, Part 1

In connection with a forthcoming panel for the TechLeb conference, I posed some basic questions about tech industry economic development, and promised to also take a crack at them myself.

Well, it turns out those basic questions are pretty hard – especially for me, since I’m going to try to generalize based on what I know of several decades of software and other technology industries pretty much around the globe. Truth be told, I don’t really know much detail about the rise or non-rise of the tech industry in any country but the US, and here in the States it’s being going along quite nicely much longer than the quarter-century that I’ve been an industry analyst. And by the way, in the US almost every region has shown the ability to grow a tech industry.

All disclaimers aside, however, I’d like to suggest a framework for thinking about barriers and aids to technology industry growth. Most of the important factors fit into three categories:

Read more

April 20, 2006

Research on technology economic development – Please help!

I’ve gotten involved in some pro bono research and education, and I’d appreciate whatever help my friends in the industry can provide.

The project is: I want to offer pithy advice to developing countries that seek to strengthen their technology industries. Major subjects include:

• What kind of policies should they adopt (and avoid!) to foster development?
• What sectors should they emphasize or even try to prosper in, given their present starting conditions?

I was inspired to pursue this by – and intend to present preliminary results at– a panel I’m running on May 21 at the TECHLEB|06 conference in Cambridge, MA. So that’s my deadline for finishing Phase 1 of the project.

How you can help

I’d appreciate your thoughts in any format – email, phone call, comment to this blog post, whatever – on questions like these, for any developing country you have familiarity with:

• If the country has had well-run tech companies that failed to prosper, why did they fail?
• If the country has had tech companies that succeeded but probably would have failed in many other developing countries, what were the differences among countries that seem to have allowed success?
• Were there any events or particular developments that seem to have made a big difference in starting or stopping tech industry success? Which government policies, if any, were a big help or hindrance?
• What is the availability of educated people? Academic/technical training? Tech industry experience? In what respects is that adequate/inadequate?
• Same questions – physical and logistical infrastructure.
• What else should I be asking?

In all cases, it would be very helpful to note which sectors(s) of technology you’re talking about, because different countries have succeeded in different ones. For example, India started out with professional services companies, while Taiwan succeeded primarily in electronics manufacturing and assembly. And mainland East Asia’s successes (domestic Chinese companies somewhat excepted) seem to be mainly in branches and satellite operations of large global tech companies. Israel’s tech industry, perhaps even more than the US’, seems driven heavily by defense spinoffs, and is divided across a variety of electronics sectors accordingly.

And if you have insight into biotech or other fast-growing areas, that would be phenomenal too.

I’ll put my own preliminary thoughts in another post. Watch the comments section to this one for a trackback!

April 20, 2006

An unusually ambitious conference — TECHLEB!06

“We want TECHLEB to be a turning point in Lebanon’s economy. For there to be a time before and a time after TECHLEB.”

H.E. Jihad Azour
Minister of Finance

TECHLEB!06, “Under the Auspices of the Prime Ministry,” is an extremely worthy and ambitious effort. With participation from the Minister of Finance on down, a large fraction of all the stakeholders in Lebanon’s nascent technology industry are convening May 20-21 at MIT. Their goal? Clear away roadblocks and kickstart Lebanon’s tech industry. Indeed, there’s a strong intention to decide upon and announce substantial public policy changes before the close of the conference. The possible payoff? A major engine of prosperity in a wartorn, rebuilding, geopolitically crucial crossroads country.

Mainly, this is a conference of, by, and for the Lebanese. But I’m spearheading an exception — a panel to bring in lessons learned from other countries that have succeeded in improving their lot with the tech industry’s help. We have speakers already committed with expertise in Ireland and the Arab world. We’re still looking to add panelists with knowledge of India and perhaps Eastern Europe. One of the panelists is a name familiar to many of you — John J. Cullinane, founder of Cullinet Software, the leading independent software vendor of the mainframe era. (Companies that succeeded largely because of ex-Cullinet people include, in my opinion, Powersoft, Cognos, Silverstream, and to some extent Lotus — and Oracle copied big parts of the Cullinet strategy.)

My panel is at 9 am on Sunday, May 21. Most of you will have no interest in being there. Even so, I’m going to ask a couple of you for help in recruiting speakers. And I hope you all consider helping me with my research into just what we should advise the Lebanese Minister of Finance to promise to technology entrepreneurs.

I’ll post a formal panel description when I have one. It will be linked in the trackback/comment section to this post.

March 16, 2006

Cheap PCs for developing countries

The possibilities for getting cheap PCs into developing countries keeps growing. The Register has a series of articles on the alternatives.

The machines are getting cheap enough that it’s not a question of whether they should be all over even the poorest countries, but rather exactly how this should be accomplished. Electricity is a non-issue in some cases, more of a challenge in others. And actual internet access of course also needs to be provided.

But in essence — a few years from now, every schoolchild in the world should have access to most of the world’s educational information.

Except to the extent, of course, that her country’s leaders censor it out …

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