Universities must produce integrated enterprises

In Opini on 28/02/2008 at 04:54

Universities must produce integrated enterprises
Opinion News – The Jakarta Post, Saturday, February 09, 2008
Harus Laksana Guntur, Tokyo

In the global era, universities in Indonesia face two challenges.First, our university has to be able to create business enterprises and second, it has to be able to produce social enterprises.

In an article in (Nature, 2006), entitled University spin-off:Opportunity or challenge? Xiaogang Peng, a professor at Arkansas University USA said university is not only the center of research
activity which produces invention or innovation, but also a center of business incubation.

University has been developing vigorously from a center of research and innovation into a center of business incubation based on technological innovation, and is able to produce spin out companies.The role of university as a machine of economic growth has become very considerable.

For instance, the Massachusetts Institute of Technology (MIT),according to the Boston Bank Research entitled MIT: The Impact of Innovation, has been contributing fantastically not only to the U.S. economic growth, but also to the economic growth of the world.The alumni of MIT have established 4,000 companies with a sales turnover about US$ 232 billion. They have created job vacancies for almost one million people in the world.

This achievement has placed MIT as a new economic power in the world, ranked 24th, with a sales turnover twice of the Growth Domestic Product of South Africa.A calculation made by MIT
Technology Licensing Office said the U.S. government gained high revenue over their investment in research and development.The U.S. government received a 15 percent sales turnover from the technology license.

From the Innovation Center of the University of Oxford (ISIS-Innovation), since it was established in 1997, they can produce one patent per week on average, and about one spinout company per month!

Oxford and Cambridge Universities have created 139 spinout companies with a revenue of 15 billion pounds sterling, from the technology license in 2000/2001.

While in Japan, according to the Technology Licensing Organization, Tokyo Institute of Technology, 36 spinout companies have been born and 3,000 patents until 2002.

Last month, I was invited by one professor from the Department of Social Engineering, Tokyo Institute of Technology, to help him distribute invitations to foreign students at TITECH to attend the launch of new program. The program is called Social Enterprises and
I delivered a welcoming speech at the beginning — which made me aware of the second challenge of the university in the global era.

The basic idea behind the launch of the new social enterprises program is to create as many as possible social entrepreneurs-which can produce a sustainable social innovation.

Technological innovation has brought about a rich society in the global economy. On the other hand, many problems such as poverty, long-term unemployment and environmental problems, which have not been addressed in this progress, have been born.

If we cannot minimize the tragedy from these problems, we cannot say we have realized true richness. “Social innovation” is the introduction of new methods and structures to address these problems in society, and the leaders of these activities are called “Social Entrepreneurs”.

Recently, The BoP (Bottom of Pyramid) concept has come to light. BoP includes new thinking and new ways of doing business in the world’s poor markets. Four billion people remain outside the global market system. Social entrepreneurs are expected to introduce new innovative strategies to overcome poverty and save the environment.

The most well-known story of a successful social entrepreneur is Yunus Mohammed, the 2006 Noble Prize winner. Starting with Grameen Bank in his native country of Bangladesh more than 20 years ago, Yunus has created the most important social innovation — the creation of better tools and processes for social entrepreneurship in poor markets.

The Grameen Group is creating not just new organizations, but new blueprints — literally a “how-to” methodology — that can be copied, replicated and applied to different contexts and ultimately improved upon, like open source software.

Universities in Indonesia are challenged to produce not only technological innovation, but also social innovation — a technological innovation which leads to the creation of a business
enterprise and a social innovation which leads to the creation of a social enterprise.

Our universities have to be able to become the machine of regional as well as national economic growth and the producer of sustainable social innovation. The success in facing the challenges depends on the attention the Indonesian government pays to national research and development.

More attention is needed by providing more funds for research, development, and commercialization of innovation (venture business and social enterprises fund). Compared to Singapore, Malaysia, Thailand and The Philippines, Indonesia has the lowest research and
development funds, at about 0.65 percent of GDP.

And this small amount of funds has to be competed for by 2,700 universities, excluding state research institutes. Regulations should be made easier for scientists/researchers to patent their

Additionally, our government must harmonize the work of the Directorate General of Higher Education, the Ministry of Research and Technology and the Ministry of Industry. Hopefully, this will create a mutual understanding and cooperation between scientists/researchers/innovators with industrialists, and lead to the involvement of our industrialist in the commercialization
process of the innovation in Indonesia.

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