TechieNotes: Leading Technology Innovation in the Middle East – 3 – Innovation or Decoration?

Fact #2- Technology Innovation is just a decoration in the companies, most of the companies which have Research and Technology are not serious about it, they do not induct a proper budget for R&D, most of these companies open R&D in The Middle East to make up a portfolio for themselves, or to Arabize their products, but are they serious about it? No they are not

When I was graduated I started working in my dream field, under the title I always wished for myself, as a Mixed IC Designer in the Research & Development of a major Egyptian brand, a Consumer Electronics Manufacturer, namely International Electrical Products, of Bahgat Group, Brand (Goldi).

Dr. Ahmed Bahgat and Dr. Hany Assal opened this center around the year 1996-1997, to be the first R&D in the private sector in this domain, if we counted El-Araby Toshiba center, which is just an arabization center, it could be counted second, but frankly speaking we can never consider Toshiba El-Araby an R&D by any means, and the time I joined in August 2000, it was a reputable position, specially that the criteria of selection was not easy at that time, and it included the elite of graduated engineers at that time, maybe the selection criteria of Mentor Graphics and MEMSCAP, which was just starting and integrating a team at that time was tougher, but knowing the numbers selected here and there, it was really one’s luck to be selected and hired in such a position. I felt too lucky at that time, and considered myself one of top 5% selected in the market.

At the time I joined, there was a conflict that settled down by a break up in the company between Dr. Ahmed Bahgat, and Dr. Hany Assal, and Dr. Hany left his position as the leader of IEP, and the direct supervisor on the R&D, and they had to hire Dr. Amr Bayoumi to direct the R&D activities, and left the other leadership activities to some ex-military leaders who filled in after Dr. Hany Assal.

Frankly speaking, this change came as the first step in the demolition of the R&D of Bahgat group, besides some other bad strategic moves, in which Bahgat Group started Horizontal growth based on bank loans, starting industries in refrigerators, water heaters, ovens, furniture, marble, the satellite channels, and the most famous of all Real Estate project Dream Land of Sixth of October, and all these steps were started at once.

This of course withdrew a lot of leadership energy into these activities, a huge budget, and the fact that Dr. Hany Assal left the group, was disastrous to the R&D activities, as a lot of consultants who used to cooperate with Dr. Hany Assal stopped appearing again (maybe relationships and act of being compassionate with him? maybe financial problems? I do not exactly know). Besides this move, the administrative leadership was transferred to the TV manufacturing leadership, and the role of the R&D Manager was more into research and development, and was treated as an internal department, interlocking with other departments, and the independence of the R&D was jeopardized by this move as a first step.

No one can blame Dr. Amr Bayoumi, he took over in very tough circumstances, and it was his first management duty in Egypt after some good experiences in the U.S., and it seems he had to learn more about the management culture and environment of Egypt before accepting this challenge, however, I can say he managed with minimal losses, and succeeded to elongate the period of keeping the R&D center open in Bahgat group for 4 more years, as I believe if it was not him, the factory leadership would have shut it down from first year.

From my humble experience I recall at this time, that Dr. Ahmed Bahgat, and the leadership of Bahgat group, used to get the visitors in tours around the office, and each visit, we were informed front end, that there will be a tour around, as the offices were behind some transparent glass, each room is fit for 3 to 4 engineers, me and my two neighbors used to giggle around this, and have some humor, start “goldfish operation” , or “fish bowl” where we imitate the life of golden fishes inside a fish bowl, and the human owner will show us to his friends, specially that when this information was passed to us by the administrative officer who ran the different administrative activities in the office, he used to tell us “open something that shows innovation on your desktops”, and this each time gave us a very good reason to keep on the laughs and jokes around these visits.

In these visits, the management team used to show us to the visitors from behind the glass we can hear them talking about how we are Hi-Tech Engineers, and that we are innovators, and we work with fabs, and make super chips, and in some cases they open the door and introduce the visitors directly to us asking us to explain, and we know well whatever bullshit we say, we will not be questioned, and this is literally what we did, and in minor cases we fell down laughing till the end of the day after they just turn around and start exiting, you can imagine where 3 fresh graduate engineers minds could take them to 🙂

Actually the message from these visits was really destroying to our morale, as besides the fact that some serious trainings were blocked, support and sponsorship to graduate studies, and we had some serious tools and Electronic Design Automation (EDA Tools) issues including expired licenses and missing licenses the company did not want to invest money in, we felt like we were there just for these visits and this made the sense of belonging and achievement totally demolished.

When I looked outside in the market, I found Sakhr, Harf, Microsoft, IBM, Orange Labs, and Quicktel, and maybe some others, who really focus on two things as a strategy:

1- Having an R&D center

2- Arabization is priority number 1

The fact that the R&D is present does not include what strategy does it adopt, what are the main product lines (besides arabized contents). But it is just a clear message from the leadership team, just we want to keep a picture perfect, hold on, here we go… Click … “SMILE.. We  HAVE R&D on board”

Of course such a strategy fires back on its holder, as the R&D develops into a cost center that would never generate revenue, instead of setting an edge in competition thus guaranteeing an extra market share, it becomes a burden, and the burden is first to cut short on the first consideration to cut costs, and this is what happened with IEP R&D around year 2005-2006, and with QuickTel around 2008, and what I see happening with Orange Labs in Cairo, as there are informations they intent to cut some extra positions, and close some teams, as for almost 3 years it was proven that there is no much added value to the center.

It has to be clear to Leadership, and this is a strong message to them, and anyone considering to open a technology innovation business… Take care where you are leading your employees to, prove them profitable by setting a profitable strategy. Yes profit is not short term, you have to spend for 3 to 5 years, but there are quick wins that could show you are on the right road, and you have to display them, you have to have product roadmaps, serious tip outs, people have to see your brand and products in the market, even with minimal developments in the beginning, but it is serious and motivating to your teams and your corporates, the peer pressure will be less from other departments in this case, and the employee “geeks” moral will be higher. And aiming high will let you reach an edge that will lead in technology by time, there are many stories of just starting companies that boomed in no time namely Flip (of Flip Cameras), Google, Facebook, MySpace, YouTube, all were nothing before they became that brand, and we can have in the Middle East our brands

Using a decoration strategy is never helpful, we need to seriously embrace innovation, and believe it is our salvation in the market, it is what defines our edge, and protects our own brands, if we intend to have one competing globally one day !

The First Article

The Second Article

About مشمش

Change is a life essential, if you do not master making it.. you will be affected by it.. In other words.. Lead, follow.. or get out of my way.. التغيير في الحياة شئ أساسي، اذا لم تتقنه، فرض عليك اما أن تقود، واما أن تقاد، واما أن تذهب بعيدا عن طريقي
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5 Responses to TechieNotes: Leading Technology Innovation in the Middle East – 3 – Innovation or Decoration?

  1. Hossam El-Ashkar says:

    Sharaf, I believe that our region ins not really for innovation. If you think of the global market, and the trend of off shoring, you can see that they mve labour intensive, and mostly low tech jobs, and keeping the value to themselves. If you think pragmatic, you can see it makes big sense. The expensive countries jobs have to have high value, to justify keeping them. So, they keep the high value jobs in high cost countries (i.e. The west) and move the low value jobs to the lower cost countries. There are some exceptions to this rule, like having R&D centres in India or china, but this is happening because of the peculiarity of those two countries which have probelms that have to be tackled locally because of different reasons. But what really counts are the centres which are really founded by local companies following a sound business model. In india for instance, the software industries started with just low cost coding, the developed into a complete industry later on. This development required the l,coal companies to invest in R&D to evolve.
    In our region on the other hand, we seem to not have this local enthusiasm, or planning. And looks like our markets are not rally mature enough to impose it’s own problems that need local work. Our governments and regulatory bodies rare satisfied with what vendors give as a solution, and even serious arabisation is coming from Israel, and not om an Arab country (with few exceptions of course).
    I just hope that we realize how important is our markets to the multinationals, and use this to get more benefits than they readily give us.


  2. Perfectly said Hossam 🙂 and 100% agree, I will take your comments and quote them in a next article, talking about the fact are we leading or are we following ? which is article no. 6, and article no. 13, Strategy, Marketing and Branding, inshaa Allah
    The main objective of these articles is to create knowledge and market awareness for enthusiastic patriots, who really want to do something to their countries, I believe that India and China are there because they wanted to be there… and I believe we do not still have this devotion to the idea, except in very few people I know from those who are struggling in the market, and I would love to have these articles really supporting them in their way forward..


  3. Ahmad Amr says:

    I really love the way things are discussed here. I believe that understanding the problem is the first step towards solving it, and the second is discussing it in such a healthy constructive manner, way to go Sharaf


  4. Pingback: TechieNotes: Leading Technology Innovation in the Middle East – 4 – Academic Leadership « Techie Notes

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