xfdws TECH-PROSPECTS sked Emerging Markets Datafile

May 26, 2003

NEW STRAITS TIMES-MANAGEMENT TIMES

MALAYSIA

ENGLISH

Finding tech prospects, NEW STRAITS TIMES-MANAGEMENT TIMES

Prasanna Raman

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IT is no secret that the last three decades have seen the most advances in science and technology in the history of mankind. And it’s the very technology that has revolutionised old industries and created new ones.

No matter how great a technology can be, it cannot be marketed unless there are entrepreneurs and venture capitalists willing to take on the risk of investing in, and promoting it, said Dr Gan Ee Kiang, group managing director of Usains Holding Sdn Bhd, a wholly-owned company of Universiti Sains Malaysia (USM).

”And over the last three decades, simultaneous advances in three broad technologies have radically altered the world’s economy. These new emerging technologies are in the realms of advanced materials, information and communications, and biotechnology,” he said during a session on Venture Capital’s Opportunities-Avenues for Investment, Strategic Considerations and Exit Barriers at the recent International Invention, Innovation, Industrial Design and Technology Conference (ITEX 2003) in Petaling Jaya.

The conference was jointly organised by the Asian Strategy and Leadership Institute, and the Malaysian Invention and Design Society.

Venture capitalists, Gan said, must therefore keep abreast with the latest technology developments to pick “winners”.

”Wealth today can no longer be measured in terms of physical assets. It must be measured by the degree of access to, and timely use of knowledge and technology that leads to intensive, value-added capabilities,” he said.

”And since it’s technology that can ensure a competitive edge in business, and help produce new products or processes for commercial purposes, venture capitalists need to keep an eye out for technologies that are feasible.”

Technologies perceived as attractive, according to Gan, include new paradigm technologies and platform technologies that can be used to build on other applications. Unattractive technologies, on the other hand, include technologies used only on single products and those targeted at non-national or orphan markets.

Key to developing new technologies, Gan said, is the need for research and development (R&D). He said because there’s an absence of R&D from multinational companies in the country, the bulk of R&D in new and merging technologies are with the university researchers.

However, working with researchers in the universities can be a challenge for the private sector and venture capitalists, he added.

”One should understand that working with universities is different because applying the one-size-fits-all concept will not work in this environment. Furthermore, there would be frustrations, that university policies or expectations are rather different from that of any other environment,” Gan explained.

Most universities, he said, are still holding on to the practice of open publication on all results, as opposed to the private sector’s practice of keeping all results and findings secret. “And in the university environment, it’s the university that holds patent to all inventions, unlike in the private sector environment where individuals usually register their patents.”

Hence, in corporatisation, a university will have to wrestle with ways to accommodate industry’s and venture capitalist’s needs without sacrificing university principles and long-term objectives, according to Gan.

”Personally, I am optimistic that it is joint ventures and spin-off companies that can create wealth for the universities and provide opportunities for venture capitals through commercialisation of R&D findings,” he said, adding that a reward system should be put in place for scientists by way of initial public offerings to motivate them further.

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