Sunday, November 27, 2005

PEIE Thinking

PEIE's blog is intended to give you an insight into Oman's manufacturing and ICTS sectors. In this regard, we sat down with Sultan Al Habsi, PEIE's Executive President and discussed innovation, smart manufacturing, competition, SMEs, Knowledge Oasis Muscat and Open Source. Indeed, the interview ought to give you a flavour of PEIE's way of thinking.

PM: What does innovation mean to you?
Innovation is the successful exploitation of new ideas. We want to get ideas out of the research centres, into the offices and factories and onto the balance-sheet to help Omani businesses compete in the global market. To be frank – our future success will be won through the exploitation of new ideas, particularly in the area of information and communication technology.

For the Omani economy as a whole, innovation is the key to higher productivity and greater prosperity for all. The government has already laid the foundations of an innovation-driven economy by creating a stable macroeconomic environment, promoting fair and free trade and improving education and skills. But there’s more to be done. To hold our own in modern manufacturing and ICT – areas that PEIE is actively involved in – we’ll need to innovate strongly by creating new high-tech firms and light-manufacturing industries as well as helping current PEIE-based firms upgrade.

At the same time, we need to raise the level of innovation in our service industries. In this regard, PEIE is in the vanguard of helping Oman become a regional knowledge hub – a country with a reputation for turning knowledge into new and exciting products and services; a country that invests in business R&D and education and skills, and exports value-added goods and services. As you’re aware, Knowledge Oasis Muscat ( is very much part of this process. Indeed, this is why PEIE is organizing the Smart Manufacturing Conference – 23 – 25 January 2006 ( on an annual basis, we feel there’s a real need to bring business people, policy makers and academics together to discuss innovation and entrepreneurship and their importance to manufacturing and ICT.

PM: We hear a lot about the Weightless Economy – what’s PEIE’s take on it?
In our view, the weightless economy is shorthand for the changes taking place in markets across the globe. Just think back a little, only 20 years ago, phone conversations travelled by copper wires which carried less than one page of information per second. Today, a strand of optical fibre as thin as a human hair can transmit in a single second the equivalent of over 90,000 volumes of an encyclopaedia. This change is driven by two factors which reinforce each other – rapid development of technology, and the opening up of markets across the globe.

PM: How does an established company actually go about it if it wants to innovate?
There’s no right way of going about this. But there are a variety of tactics a company can use to improve the probability of producing new ideas. One is to fundamentally question the existing mental models of the organisation. Let’s face it, every organisation operates under certain mental models and paradigms. For example, these are our customers, this is how we market, this is how we sell, this is how we hire, this is how we do business. What I’m suggesting is that an organisation will never discover anything new unless it first questions what it already has and says. Ask yourself - why are we doing it like this, is there another way? As long as an organisation is happy and satisfied with what it has, it isn’t going to search for something new – and will never discover anything new as a result.

PM: With your experience of managing KOM, where do you see innovation happening in the future, particularly in IT?
Probably in places we least expect it. I'm intrigued by what’s going on in countries like China that are promoting Linux and other open source solutions in its government and to its citizens. Their government favours Chinese-developed open source software, such as the Chinese Academy of Science's Red Flag Linux. Like many countries around the world, China wants to build its ICT infrastructure and economy with domestic spending and expertise. India, Argentina, Mexico, Germany, Venezula and Peru are doing similar things, if not at the government level, then at the grassroots and corporate level. With all these people building software to solve real-world problems using open source tools and technologies, I expect there will be a deluge of new innovation in that space in the next ten years or so.

PM: What do you feel are the main challenges facing Gulf-based small businesses today? One of the main challenges facing the region’s SMEs centres around the death of distance. With improving technology and the Internet, SMEs can operate on a global basis. For this to succeed, they need to be as professional, as efficient and as cost-effective as possible. The other challenge facing them is the immense competition from larger companies.

PM: What’s the state of entrepreneurialism in the Gulf?
Entrepreneurialism is thriving in the region, but there is a high churn rate of entrepreneurs who come and go. For instance, hundreds of budding entrepreneurs will give it a go this year in terms of setting up their own enterprise but many of these will close within their first three years. This is one of the many start-up issues we’re grappling with in the Knowledge Mine, the business incubator program at KOM.

PM: What type of person makes a good entrepreneur?
Being a bit of a loner tends to help, as sometimes the whole world is against you. You could go into work one morning and find a bank breathing down your neck, a supplier wanting to know what’s happening, orders stacking up and staff not turning up. So, a good entrepreneur needs a thick skin.

PM: A lot of people think entrepreneurs are born, not made. What's your view on this?
This is an interesting question. I'd say both. Some people are born as such – they have the right temperament and are entrepreneurial from an early age and others pick it up as they go along. For people like Steve Jobs of Apple and Sir Richard Branson of Virgin, I’d think it’s more the former than the latter. I admire people like Jobs and Branson for creating new things in the face of severe doubt and opposition, and in doing so, for making the lives of people that much better. Same for HP in its early days. I admire Bill Joy for coming up with Java and Sun for maintaining a culture of innovation and entrepreneurship.

PM: If you could change one thing overnight to make it easier to start up an enterprise, what would it be?
Changing attitudes to enterprise and innovation is the key to this – fear of failure is one major factor that prevents many people — young and old — from putting their business ideas into practice and business survival rates improve dramatically when fledgling businesses seek advice and support. So, my wish is for a cultural change to take place in the region to stimulate more business start-ups, with people taking advice at each stage leading to more successful, growing businesses, following on from that.