ICT International Social Networks

8/14/2019 ICT International Social Networks

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rgarcia @ alterwork . com

Bari, Italy to US, New YorkInterregional Internationalization in

Information and Communications Technology

January 31st, 2008

Presented in

Bari, Italy




Social Networks as Communities for International Collaboration in

Innovation Intensive Industries

Ray Garcia

alterwork.com




Elements of a Tech Based Economy

• Knowledge generation from Public/Private R&D• Knowledge transfer between individuals

• High Quality ICT Infrastructure

• Expert Level Workforce

• Source of Risk Capital

• Entrepreneurial Culture

• Quality of Life

• Social Networks building Social Capital




Why Social Networks

• Self-generating Innovation Clusters work throughSocial Networks which are global and actively useICT

• Thriving interdependent Social Networks

– Silicon Valley/Alley, Boston, Austin – Hsinchu-Taipei, Bangalore, Tel Aviv, Singapore

• Local Social Networks – Cambridge, Helsinki, Sophia Antipolis

– Stockholm, Munich• Common Attributes of Innovation Clusters

– Start-up Activity, Human Talent, University/R&D Institutes

– Global Links, Venture Capital, Taxes and Regulations




Impact of Social Networks

• Comparative Advantages – Lower cost of expertise

– Raising productivity and performance speed

– Creating core competencies

– Creativity• Challenges

– Generating Intellectual Property

– Incentives to discover markets and create products

– Differentiation

– Funding




What are Social Networks

• Any voluntary group that generates relevant valuethrough participation sufficient to be sustained andgrow and has a recognizable outcome.

• A goal, problem, intention, anticipation, common

interest, shared expertise, can be the catalyst for theformation.

• A means for the group to communicate and formrelationships

• Treats ideas and knowledge as a commodity• Accumulating convertible social capital


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Designing Social Networks

• Formal structures and processes typical of corporations do not create communities

• Need to invite organic interactions that buildrelationships; one on one discussions, civil group

discourse and argumentation, working towardsshared goals and outcomes

• The opportunities to communicate should be flexibleand responsive to the community



Successful Social Networks

• Define and focus on value• Allow for varying level of participation

• Invite open dialog between insiders and outsiders

• Develop public and private communication

• Balance enthusiasm with the familiar

• Create a pulse for the community

• Evolve in response to changing needs



Implications of Social Networks

• Global in scope due to ICT removing boundaries toremote communications

• Shared knowledge networks enable opportunityformation

• Tacit local knowledge can be disseminated globally• Local business can think and act globally through

participation

• No longer exclusive to academia or multi-national

corporations



Social Network as Capital

• Social Capital is the network of relationships thatfacilitate economic action

• Economic vitality is dependent on Social Capitalwithin regional innovation clusters

• Social Capital provide opportunities for knowledgetransfer within the network

• Networks can extend the reach of Social Capital



Modes of Social Capital

• Status - Familial, Social, Religious, Proximal,maintains closed communities and excludecompetition and places cultural constraints as limitingaccess. [NY Diamond Market]

• Reputation - Recognition of a reliable and consistentbehavior and competency that can be trusted andmeasured as productive in achieving economic utility.[Silicon Valley]

• Authority - Hierarchy of position in a formalorganization which affords the presumption access.[Gov’t]



Building Trusted Social Capital

• Establish a common point of introduction• Familiarity through repeated interaction of direct

interpersonal contact

• Calculating reputation through the network

• Predictable norms provided by the social context of the exchanges



Social Capital in Silicon Valley

• Access large global talent pool of engineers• High labor mobility favor relationships

• Social connections transcend company

• Quality of information source is highly valued

• Trust based on reputation for performance not socialor familial or authority connections

• Free exchange without expectation of short termreturn or subject to rational calculation within the

network.



Social Capital to Innovation

• Direct path to high tech innovation is through thenetworks of trusted coordination of knowledge andnot through markets or hierarchies.

• The absence of an explicit quid pro quo in network

enhance the transmission of knowledge which isconsidered a commodity



Silicon Valley Innovation

• Three large networks facilitate new entrepreneurs – Firms, R&D Labs, Universities

– VC’s, Investment Bankers, Law Firms

– Supplier and Customers

• They all rely on reputation and trust within ahorizontal and vertical network to make decisions

• These networks are highly purposeful and dynamicand are supported by adhoc Communities of Practice

• The networks are highly diverse and global



Barriers to Social Networks

• Lack of physical proximity may not foster degree of familiarity needed

• Sense of belonging, cross-national/cultural/languagedimensions

• Task focused versus practice based• Shifting membership or level of participation

• Expertise may not easily disseminate

• Proprietary or exclusivity of information



Challenging Cultural Perceptions



Global ICT Mitigates Cultural Differences

• Belief in ICT as an agent of change• Freedom to participation as empowerment

• Equal access to information regardless of role

• Self organizing networks eliminate power distance

• Force of competency over personality or authority

• Future uncertainty is adopted as the norm

• Risk are managed as a rational choice decisions

• Individualism is absorbed into the collective

• Time/Space are virtual, continuous, and shifted

• Communication skills are computer mediated• Trusted relationships built through network connections

• High diversity of roles and cultures to shared outcomes



Overcoming Obstacles to Global Relationships

• Identity and Purpose established• Open, frequent, exchange of information on

opportunities, contacts, and developments

• Use of ICT to bridge global divide

• Visits to understand tacit and cultural factors• ICT to bridge entrepreneurship effort

• Local representation



Studies for Innovation Clusters

Justification for establishinga Social Network as the basis for building an

interregional bridge for entrepreneurial ventures




Why Source ICT from Italy

• Unique Combination – Experience Design

– Embedded Systems

– Cultural Institutions

– Academic Research

– Desirable Destination – Presumed Familiarity

– EU and Global Reach of Italian Business

• Concerns –

Economic (Euro Fx) and Political Climate – Government Regulation

– Language

– Competitiveness versus US options

– Size of local versus EU market




ICT Business Case Studies

• CIIM (global & virtual) – Italian business network

– Events for business development

– Service brand Model

• Tinker.it (Milan) – Experiential Technology Company

– Board design and software development kit

– Manufactured enabling product model

• DolceChannel (New York) – License Italian film content

– Delivery via internet and mobile

– Entertainment and Advertising channel model




Why should Italy ICT operate in US

• Assets – Innovation Clusters and Competition

– Large homogenous ICT market

– Gateway to Hemisphere

– Marketing and Sales focus

– Venture Capital and Public Financial Markets – Early adopter market culture

– English as linga-franca of ICT business

– Global transient tech entrepreneurs

• Constraints – Provincial business and market mentality

– Lack of truly global ICT product experience

– Lack of standards in Cellular constraints market

– Military Industrial complex drains resources




Why New York City

• International Destination and population• Central to entire North Eastern corridor

• Large local ICT Market

• Large Media Hub

• Financial Markets and Venture Capital

• International Law expertise

• Varied University and Research resources

• Mobile workforce and globally receptive• Italian Business network




Case Study NYC

• Quick Start – NY Software Industry Association

– NY Angels

– International Business Law

–Incubator Office Space

• Example ICT Intensive Markets – Banking and Finance

– Media and Advertising

– Healthcare, Pharmaceuticals and Biotech

– Hospitality and Tourism

– Retail and Entertainment

– Business Services




Formula for Innovation Cluster

• Foster entrepreneurship with global relationships• Find large markets first then develop products

• Participate in global social networks

• Support international business exchanges and local visits toseminars and conferences and tourism

• Fund applied product Research and Development

• Transfer IP from University to Corporate ventures

• Think Globally first, EU/US but test market regionally

• Manufacture in Asia or lowest cost regionally

• Invite EU/US VC’s to locate regionally• Solicit government support to remove barriers

• Involve innovation cluster mentors

• Build the Social Capital and Speed to Market




Promote the Innovation Cluster

• Increase awareness – Network throughout local ICT sector and layer value chain

– Brand recognition leverage made in Italy

– Promote regional business tourism

– Present at conferences under the Bari Brand

– Manage perceptions in US and Global media.

• Avoid Imitation – India, low cost software and call centers

– Taiwan, bulk manufacturing

– Israel, military focused IP

– Cambridge, IP generation but life style companies

– Helsinki, isolated outpost, wireless valley




Continuous Innovation

• Entrepreneurship = disruptive economic dynamism – Breaks old established order

– Uncontrolled networks of self-organizing behavior

– Performance is the only requirement

– Do first ask later attitude

– Be different, create the opportunity, have a vision

– Take responsibility and risk

– Share the rewards

– Spread the work to whenever it is best done

– Execute with speed




Summary Attributes of Innovation Clusters

• Self-generating innovation clusters build social capitalthrough communities of practice that extend globallyand have a workforce that is mobile andentrepreneurial – Find the largest markets and innovate

– They generate IP and speed to market

– Source from the lowest cost and create value chains

– Attract venture capital through local offices

– Get to US market to attract public capital

• Entrepreneurs will do this many times regardless if they succeed or fail at each attempt




Resources

• Italian Venture Capital and Private Equity Association – www.aifi.it list PE & VC’s investing in Italy

• Continuous Innovation Network – www.continuous-innovation.net Academic Research

• The Competitiveness Institute – www.competitiveness.org Cluster Development

http://www.aifi.it/

http://www.continuous-innovation.net/

http://www.competitiveness.org/

http://www.competitiveness.org/

http://www.continuous-innovation.net/

http://www.aifi.it/




Entering the US Market

Is your company ready?




Typical Aspiring Local Tech Company Scenario

• Excellent technologically advanced product• Attractive product benefits and success in home market

• Self funded and profitable

• Interest from foreign customers and partners

• Opportunity to exploit government program to promote crossborder markets

• Views US as large market for its products

• Little or no US market research on differentiation

•Never visited the US

• Slow to respond to initial sales request




Tech Company Readiness Questions

• Why do you want to enter the US Market?• What lead to the conclusion that a market for your products

exist?

• Is your company succeeding in its own home market?

• How and when will you prepare for entering the US market?• How mature is the company and products?

• Are the management and decision makers willing to travel to the

US?

• Does an English language product brochure and web site exist?

• What strategic process do you have for entering the US?




US Product Distribution

• Localization• Marketing Assessment, Pricing, Support

• Distribution Channel Options

– Sales Representatives

– Distributors

– OEM/VAR

– Branch Office

– Subsidiary




US Operations

• Business Structure and Capitalization• Legal, Tax, Regulatory Issues

– IP Protection: Patents,Copyrights, Trademarks, Trade Secrets

– Customs: Tariff, Product Marking, Drawback

– Commercial Law: Contracts, Warranties, Liabilities

– Tax: Federal State taxation

• Employee and Immigration Law and benefits




Foreign Direct Investment Attractiveness

• Location, Cost of Living, Life Style• Vibrant Local Private Sector

• Population and Market Size

• ICT Infrastructure Quality

• Productive, Flexible, Affordable High Skill Talent

• High Tech R&D and Innovation Generation

• Financial Services

• Active Government support



US Tech Outlook 2008

• Historical Context – Mortgage Lending crisis 150 - 400bn $ estimated economic loss

– US Dot com losses estimated at 93bn $ ~ 2000

– Saving and Loans crisis 189bn $ ~ 1980’s

• IT Budget components are Capital Spend and Ad-hoc

– Capital Spending likely to remain flat at below 5% increase – Ad-hoc spending likely to stall

• Tech Cycle at absorption of previous advances – Some incremental Enhancement

– Little innovations or growth

– Consolidation through Virtualization – Business Intelligence in times of increased risk

• Horizon – SaaS, Green Tech, Governance, Enterprise 2.0

Documents

ICT International Social Networks