Author Archives: ricardo.pauleta

With 11 years of experience completed last November, the Technology Innovation Agency (TIA) has a very clear purpose: to be the leading innovation agency to stimulates and support technological innovation to improve the quality of life for all South Africans in order to obtain socio-economic benefits to South Africa and increasing their global competitiveness and opportunities.

Silicon Valley, the entrepreneurship world in a valley

With more than 50 years of history, Silicon Valley is the most efficient economic ecosystem in the world, being a worldwide reference in innovation and entrepreneurship. Here, the venture capital is available in greater quantity and quality, plus a huge concentration of many ideas and talents. According to TIA, it’s crucial to introduce South Africa into this circuit, strengthening their entrepreneurial ecosystem and accelerating the introduction of technological innovations in Africa.

The strategic role and motivation

A South African incubator in Silicon Valley can become a key project for TIA as it addresses all of it’s strategic roles present in what they established as their mission.On the one hand while this project connects TIA to the world’s leading technology center, on the other hand it promotes links between South Africa and countries with the most advanced innovative ecosystems, the latest technology developments, competitiveness improvement, and the promotion of job creation. To summarize, we can consider six main ideas to be the focus of this decision:

1. Open up new opportunities for South African entrepreneurs and innovators by opening up access to the top innovation and entrepreneur ecosystem in the world;
2. Assist selected and promising start-ups to further develop their business ideas and models, access new knowledge and new sources of funding and also new partners;
3. In this way, promoting the incorporation of innovation into the South African economy, increasing its competitiveness and export potential and creating new jobs;
4. Leverage TIA’s role relating to technological innovation and start-ups in SA, reinforcing all strategic roles: Connector, Active funder, Facilitator, Service provider, Thought leader;
5. Reinforce the TIA’s brand, by associating it with a top brand;
6. Bring back new ideas and methods for promotion of technological innovation and entrepreneurship – sharing and application of knowledge.

This project involves the design of the acceleration program, it’s assembly and management for one year. A working visit to Silicon Valley by representatives of TIA and the South African Ministry of Finance took place from 4^th to 8^th February. The concept designed by LBC was submmited to TIA management in February and the start of the acceleration program must occur before the summer.

For Senisha Moonsamy, Director of TIA in charge of this project, LBC offers guarantees given the quality of work they has been developing on projects in South Africa, their 10-year experience of supporting for start-ups and immersion programs in Silicon Valley, as well as the vast network of partners, entities and experts with whom the company has been working in Silicon Valley.

LBC has more than 1000 projects in 12 countries in the field of management and digital transformation consulting, having been present in San Francisco since 2008, dedicated to the supporting start-ups, business innovation and immersion programs in Silicon Valley.

With the 10th edition of the GSI on the way, the consultant LBC hosted a session for its Alumni community to promote networking and the discussion of current emerging issues.

This event had the special participation of LBC’s San Francisco-based partner, who brought us the key trends and key issues of the Bay Area. Data management and growing on-demand application to various sectors, such as health, education, retail, media, and entertainment, were two of the major themes presented. This race, led by major tech companies such as Apple, Google, Facebook, and Amazon, for real-time data and service, is focused on the Bay Area. The recent acquisition of FitBit by Google is an example of this race between the tech giants.

It was also discussed the impressions and pros and cons of the WebSummit and its impact on Lisbon and Portugal in terms of promotion, the attraction of talent and inspiration, with Lisbon being nowadays a destination increasingly sought after by startups and entrepreneurs.

The GSI IEP, which has already had the participation of more than 400 entrepreneurs, has its 10th edition dated from 1 to 5 June 2020 and will focus on topics such as Smart Cities, Mobility, Agrotech, and Fintech.

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Benefiting from nowadays’s biggest technological event, where entrepreneurs and investors seek business and opportunities linked to innovation and technology, LBC brought together a group of entrepreneurs from the Brazilian ecosystem and promoted the connection with market players in entrepreneurship and innovation areas in Portugal

During their stay in Lisbon, the 32 entrepreneurs were also in contact with entities that support entrepreneurship, internationalization, and innovation such as Portugal Ventures and PLMJ Advogados. They also visited StartUp Lisboa, EDP, Talkdesk, Mygon, Unbabel, among other entities.

The four days of the 11th edition of WebSummit 2019, completely sold out, were marked by thousands of pitches, hundreds of lectures, a thousand speakers and more than 70,000 participants from more than 160 countries who walked miles between the Altice Arena and the other pavilions, through which it this small technological world is divided.

In the last decade, LBC has been bridging the entrepreneurship and innovation ecosystem in Silicon Valley, where organizes executive immersion programs since 2009, in which more than 400 international entrepreneurs have already engaged. Know more about the GSI’s executive and corporate programs.

What should leaders in Government and the public sector do to make sure that a country, a region or an economic ecosystem do not stay behind and that as many citizens as possible benefit from the digital revolution, or the Fourth Industrial Revolution, to use the term that marked the 2018 Davos Conference.

Countries, regions and economic ecosystems have different challenges and levels of maturity. However, from our project experience of working with Governments and several stakeholders, and from our research, it is important to act in a structured way in, at least, eight dimensions¹.

1. Make the digital challenge a priority for the country, region or ecosystem
2. Use eGovernment as an anchor
3. Ensure maximum broadband internet connectivity
4. Promote a strong and open entrepreneurial ecosystem
5. Stimulate businesses to transform themselves
6. Develop critical digital skills
7. Fight the digital divide – protect the society
8. Engage top champions and top advisors

1. Make the digital challenge a priority for the country, region or ecosystem

Government and public-sector leaders need to build a sense of urgency, define a shared vision, mobilize society and build an actionable framework or guide plan with maximum support from a wide variety of stakeholders. This is not easy, as many of the concepts of this emerging information society are vague, new models are difficult to visualize by public and business managers, resistance and fear of change are endemic in society, and the media industry focuses more on daily short-term impact events.

Several actions can be taken in this regard. Leaders should have the courage to place digital transformation high in the political agenda. After all, jobs created or threatened by technology do matter, as well as new ways of serving the citizen in health, education and other social dimensions. It is important to place the political responsibility at the highest level in Government, not in a peripheral ministry or on a political agent with low weight and notoriety. It is also useful to build and empower one or more stakeholder bodies with a real say in policy and implementation. A useful operational lever is to introduce a digital agenda in all Government budgets, at national, ministry, regional or institutional levels.

Public-sector leaders need to build a sense of urgency, define a shared vision, mobilize society and build an actionable framework or guide plan

2. Use eGovernment as an anchor

Government leaders should embrace boldly the digital agenda and build a citizen-centered Government, breaking down as much and as fast as possible Government silos, integrating the latest technologies to build a “one to one” relationship with citizens and businesses instead of the dominant “one to many” relationship.

The key to success is not conceptualization but the drive toward implementation.

Several countries provide case studies of best practices and of lessons learned which can be easily adapted. Several reputable bodies, such as the OECD – The Organisation for Economic Co-operation and Development, have researched and developed sound guidelines.

It is necessary to digitize entirely the public sector with new digital tools and to change processes, culture and service models. Empower central, regional and local Governments with budgets and people with coordination authority and implementation skills to sustain a strong implementation. Above all, it is necessary to avoid fragmented Government initiatives, which overlap, duplicate or are conflicting. Public sector CIOs need to be placed higher up in the hierarchy level. Transversal transformative projects need to have full political and budget support, based on business case proposals and tight calendars.

Digitize entirely the public sector with new digital tools and to change processes, culture and service models

Besides building a citizen-centric Government, leaders should use eGovernment as an anchor to speed up the digital transformation across society, involving business in the implementation of eGovernment, for higher efficacy and to strengthen the economic fabric and provide opportunities to start-ups, through smart procurement.

Furthermore, some strategies can accelerate digital transformation in society. For example, ICT (information and communications technology) in education has a fundamental impact on the citizens of the future but also permeates the whole society through the student’s families. “Smart city” solutions engage the average citizen in new ways of living.

Government regulation can unlock or block the societal drive towards digital modernization. This lever does not cost money and is often neglected.

Use eGovernment as an anchor to speed up the digital transformation across society, involving business in the implementation of eGovernment

3. Ensure maximum broadband internet connectivity

Although measuring the exact impact of broadband internet penetration poses several challenges to researchers, it is unquestionable its role as a disruptive enabler for economic growth, innovation and productivity, consumer surplus, empowerment of citizenship, job creation and poverty alleviation, amongst others. More important though, is the fact that those who do not have broadband, i.e., means of access to data communication, will be increasingly excluded from the competitive game and the social gains associated.

Therefore, the objective of having “everybody connected digitally at all times at high speed and at affordable prices” is not a utopia anymore, but a necessity for all countries which do not want to be excluded from the global digitally interconnected world of economic and social opportunities. Even for less developed economies/countries, internet access is key to reduce poverty-related to lack of information and knowledge and remoteness. The past policy of “universal access” to wireline communication should now apply to broadband.

Internet access is key to reduce poverty-related to lack of information and knowledge and remoteness

However, promoting broadband poses several issues that require strong leadership from Government.

Firstly, broadband is only effective if provided in combination with the adoption of information technology and socio-economic changes, i.e., new applications, services and contents, and changes in Government and business processes relevant to people’s lifestyle. Therefore, simplistic supply-side policies, based on infrastructure deployment, are bound to fail in its impacts and to bankrupt funders. A balanced supply and demand-side policy, integrated with societal processes relevant to people – health, education, public services, new services to consumers by business – is required. This calls for differing strategies for differing socio-economic groups, addressing in different ways wealthy and poor, disadvantaged social groups, rural and urban, formal and informal economy, age groups, geographical areas and the differing maturity of economic sectors.

Simplistic supply-side policies, based on infrastructure deployment, are bound to fail in its impacts and to bankrupt funders. A balanced supply and demand-side policy, integrated with societal processes relevant to people – health, education, public services, new services to consumers by business – is required

In addition, these services need to be affordable to citizens and consumers and within the reach of Government budgets, which is not an easy task. In general, State-owned facilities are the less desirable option, as they are less agile in serving the consumer-citizen, less innovative, more expensive and less transparent. Therefore, private sector investment should be the primary funding of broadband development in geographical areas where the market is sufficiently developed to offer sound financial returns for investments by carriers. Where there are unserved regions due to market failure, Governments should enter directly as a service provider or generate the necessary stimuli in order to render the market more attractive to private sector investment.

It is important to:

• have a national broadband plan
• promote a shared vision and to align and federate efforts of all stakeholders in the right direction
• coordinating actions of private and Government bodies
• reduce inequalities
• implement policies of digital inclusion and to target key sectors, such as health, education and public services, to widen societal impact
• increase investment efficiency
• make available regulation, competition policies and incentives for private investment in infrastructure and to implement
• platforms for sharing of infrastructure
• increase adoption levels
• stimulate and support innovation by businesses in services relevant to citizens
• make incentives available to business and consumers-citizens.

4. Promote a strong and open entrepreneurial ecosystem

The opportunities and the threats of the digital revolution derive not from incremental gains but from the disruptions that can emerge from the new technology. Digital era services and products have wide impact. These disruptions make incumbent market leaders and economic value-chains redundant, leading to reduced economic output and job losses, and, over time, to economic and social decline. On the other hand, through innovative disruption, newcomers can become the new leaders.

However, disruptive innovation requires completely new ways of working, new culture, new tools, new economics, new everything.

Technology start-ups are figuring out how to adapt and succeed in this new digital world better than the incumbents. It is therefore important that Government leaders create very strong incentives for start-ups and for the creation of innovative entrepreneurial ecosystems that attract both talent and smart capital and scale up promising new services and products. Large investment in entrepreneurs is cheaper than the alternative social security funding or joblessness unrest.

Technology start-ups are figuring out how to adapt and succeed in this new digital world better than the incumbents

In addition, since ecosystems take time to form, it is important to promote linkages to the most advanced ecosystems in the world, rather than close-up local ecosystems, attracting foreign talent and capital, and helping local entrepreneurs go global.

Government leaders should take caution and not engage in what must be led and done mostly by business and university/research centers. The government should concentrate on creating the right conditions for success by these players, through regulation, incentives, taxes, policies, legislation, and funding. Government support must be selective and focused on high economic impact/high long term social impact entrepreneurship, i.e., transformational entrepreneurship and social entrepreneurship, not wasting resources on exploitative entrepreneurship.

It is important to promote linkages to the most advanced ecosystems

5. Stimulate businesses to transform themselves

Businesses create jobs and revenue, not Governments. Hence, a country can respond successfully to the digital challenges only by mobilizing its private sector to react quickly to digital challenges.

Therefore, Government leaders should incorporate into their role to create the conditions to stimulate and support businesses to transform themselves.

Digital technology has only begun to penetrate industries. As it continues its advance, the implications for revenues, profits, and hence for society, will be dramatic. Comprehensive digital strategies for companies and for value chains/ecosystems will be the biggest differentiator between companies/value chains that win and that don’t. Those that engage in disruptive innovations related to creation of new markets, new value propositions, new hyperscale platforms, new supply chains, and business systems will have the highest returns.

Government leaders can act in a variety of ways. Three types of actions should be considered. Firstly, promote the creation or emergence of a strong ICT sector that can serve the rest of the economic sectors to help them export and compete globally. For existing ICT sectors, its reinforcement should be a priority of economic policy. Secondly, increase ICT spending in terms of investment and consumption. Thirdly, implement participated sector approaches, whereby economic policy is not only directed at the economy as a whole but also directed at very specific economic sectors and with specific measures, for example, connected manufacturing, customer centric retail, smart farming, smart cities, digital education and human centered health.

Digital technology has only begun to penetrate industries

6. Develop critical digital skills

Because the Fourth Industrial Revolution runs on knowledge, Government leaders need to promote a concurrent revolution in training and education.

This requires a national plan for digital skills. Such a plan needs to address both the new skills necessary and the impact of the new digital technologies on jobs.

The new skills set needs to be addressed at three levels. Firstly, regarding STEM – science, technology, engineering and mathematics – mostly at high school and universities, to power the digital capacity of the economy in the short term. Secondly, at all school levels, introducing digital access to all students (laptop per student or other methods) and changing the teaching method, whereby the teacher is no longer the center of the classroom, but the facilitator to a wide range of knowledge accessible through the internet. Thirdly, basic digital literacy for the population at large in order to reduce the digital divide.

Because the Fourth Industrial Revolution runs on knowledge, Government leaders need to promote a concurrent revolution in training and education.

On the other hand, balancing between job gains and losses and overcoming the mismatch of skills required/skills available (shortage) is a complex undertaking that requires close cooperation among education providers, Governments, and businesses.

The best way of protecting jobs is not to delay technologies that take up jobs but to accelerate those technologies that create new jobs. Efficiency innovations reduce jobs. Disruptive market creation innovations create jobs.

Lastly, Government leaders must be bold in engaging as early as possible with social institutions and labor unions regarding the flexibility of work in the digital era.

Efficiency innovations reduce jobs. Disruptive market creation innovations create jobs.

7. Fight the digital divide – protect the society

The digital revolution can have a dramatic impact on those sectors of society less prepared to adapt or already in a disadvantaged position. The tendency is for digital disruption to increase inequalities, unless Government leaders take decisive action to work on models of greater inclusiveness.

Equal access to the internet is a necessary basic levelling field that can open up new opportunities for the poor and for those previously excluded by providing cheaper and faster information and knowledge to all.

Government programs directed at the youth, the urban poor, the rural and remote dweller, the elderly, women and recycled workers, can make technology a liberating factor. Mobile devices and communications, DIY (do it yourself) models, social media and other technologies can allow for new economic models to emerge, that can more easily give competitive resources to the individual and the small economic operator than in the past.

Equal access to the internet is a necessary basic levelling field that can open up new opportunities for the poor

8. Engage top champions and advisors

The digital revolution makes the competitive landscape more complex. Our life is becoming a combination of physical, technical and biological dimensions.

Due to the rapid pace of technological advancement, countries that harness digital technologies stand to reap significant economic benefits in the long run. Nations that are slow to embrace the digital run the risk of falling further behind.

In this context, Governments, political parties and the public sector should adopt practices that attract the most qualified individuals and should give them the necessary conditions to succeed. In this regard, nationalistic perspectives should be balanced with the gain associated with getting the best-qualified individuals in the world, independent of nationality, to reinforce universities and public institutions.

In addition, a new type of leader is required, one who is able to think creatively of the new social frameworks needed to adjust to the challenges of the digital revolution. Moreover, a new type of leadership is needed, more related to learning and coordinating than to instructing, to sharing than excluding, to experimenting and innovating than to managing, to communicating digitally than formally, to formulate agile responses than bureaucratic rules.

Moreover, a new type of leadership is needed, more related to learning and coordinating than to instructing, to sharing than excluding, to experimenting and innovating than to managing

Government leaders of today have a very high responsibility in creating the conditions for future generations to live adequately in a technologically driven future.

1. This article is based on a keynote speaker presentation by LBC’s CEO, Carlos Oliveira, at the Technology Innovation Conference in Johannesburg, 2018. ↩︎

The last decade witnessed the creation of Corporate Venture Capital (CVC) divisions by hundreds of companies. The participation of CVCs to the overall Venture Capital (VC) ecosystem is growing and VC is no longer strictly associated with financial companies. In fact, in 2018, the average CVC deal size reached an all-time high of $26.3 million, according to CB Insights. Apparently, CVC has emerged as a relevant source of entrepreneurial capital.

But this prompts 2 questions: How does the nature of CVC as a corporate investment differ from the traditional intermediary VC model and why are established companies focusing on venture capital?

Firstly, it is important to clarify that Corporate Venture Capital (CVC) can be defined as an equity investment by an established corporation in an entrepreneurial venture. According to the article Making Sense of Corporate Venture Capital, the definition of  CVC excludes investments made through an external fund managed by a third party, as well as, investments of more general “corporate venturing”.

The nature of CVCs differs from the traditional VC model as the firm seeks to maximize the value for shareholders on both financial and strategic value, contrary to a pure focus on financial return. It seems the essence of Corporate Venture is more than an investment, instead, it consists in bringing up structural collaborations, partnership arrangements and a fantastic marriage with external ventures – start-ups and scaleup companies – benefiting internal corporate innovation and generating a mutual growth.

And we are already halfway to answering the second question – why do companies invest in entrepreneurial ventures? – Previous studies reported that CVC may perform as an instrument to identify potential substitutes for existing corporate offerings such as novel products, services, or technologies. In light of most surveys results, firms have stated key strategic objectives for investing as follows:

• “gain a window into new technologies and new markets”;
• “import or enhance innovation within existing business units,” and
• “identify potential acquisition opportunities”.

“This is the single best time ever for corporations to invest in early stage start-ups because the cost of starting a start-up is the lowest it has ever been (…) we’re in a key moment in time”. Pierre Rogers, Venture Investor and Founder, PuroTrader

Corporations are partnering with start-ups earlier and earlier, and 2018 mirrored a high-flying growth in Global Corporate Venture Capital. CVC groups participated in $52.95B of funding across 2,740 deals and 264 CVC firms invested for the first-time (Maersk Growth, Porsche Ventures, Coinbase Ventures, to name a few).

Google Ventures (GV) once again took first place as the most active CVC, investing in over 70 companies. Salesforce Ventures was the second most active, followed by Intel Capital. Concerning the most active investors in unicorn companies (companies valued at $1B+), the top 3 was occupied by CapitalG (Google Capital), GV and Dell Technologies Capital.

Internet, mobile and healthcare sectors attracted CVCs investment in 2018, showing an increasing number of deals and funding. Regarding emerging industries, AI, Cybersecurity and Digital Health were the trends of Global Corporate Venture Capital.

All that said, we would like to suggest a moment of reflection on your own company’s growth path and how corporate finance and innovation policies are perceived within your area of operation.

Don’t miss the bus and join us on the Global Strategic Innovation Program (GSI) to meet Silicon Valley’s experts, leading companies and emerging start-ups. Learn about the impact of disruptive technology on business and society development and how to improve business models and strategic management capabilities.

Silicon Valley is known as the world of technology and innovation. We may not remember well but the world existed before the internet. But how about Silicon Valley? Is it an exaggeration to say that from this Valley emerged companies that revolutionized the way we live today?

Today in Silicon Valley, there are highly qualified scientists and engineers, large investors and elite universities. Although hard to imagine, until the 1950s, the Santa Clara area was predominantly an agricultural zone, full of fruit trees. San Jose, where the famous Bay Area is located, was the capital of canned fruit and Stanford University (now one of the top universities in the world and the starting point for what SV would become) was just another higher education school.

The term Silicon Valley appeared in 1971 by Don Hoefler, an American journalist, and stands for determination, intelligence, and passion for technology. And this name could not be more in agreement to what was going to happen when by the hand of two colleagues from Stanford University, HP was born and with it, emerged also what we know today as Silicon Valley. Hewlett-Packard became one of the great pillars of technological progress in the area and, for a long time, was the reference company where all engineers would like to work.

Since the beginning, this “Valley of Dreams” was the birthplace of big companies and HP was not the only name born and raised in the Valley. In 1959, it was invented what would change the life of the entire world population and Silicon Valley’s electronics industry: the first integrated circuit capable of being produced commercially, a complete electronic circuit inside a silicon chip. With this invention, the revolution of the personal computer began, and Intel is born.

In the mid-1990s, with Apple, Microsoft, and IBM already in the race, the technology industry grew at a very fast pace and Silicon Valley was the stage for all the news and events.

In the middle of 1994, with the launch of the Internet to the general public, a several of new companies appeared – predominant in the current market – such as Cisco, Yahoo!, Amazon and eBay. And, again, through two colleagues from Stanford University, comes what came to redefine the way we use the Internet today – Google.

As the Internet grew with the help of large investments, Silicon Valley was the place where everyone with new ideas wanted to be. At this point, the Bay Area was where all the action took place.

The beginning of the 21st century confirmed the true power of the Internet, and over the past 19 years, industries have been reinvented and new ones emerged. Industries that would change our lives forever.

With the rise of social networks, Apple’s revolutionary inventions and the positioning of Android, we have seen a fierce evolution of smartphones, tablets and personal computers.

So far, the 21st century has confirmed what a place with huge potential, innovative and technological spirit and highly qualified as Silicon Valley can achieve.

There is no doubt that the Valley led the technological progress of the 20th century and shows ambition to continue to do so. The report of the most recent study by CB Insights, which focuses on the locations of the world where the largest technological activities take place, highlights the dominance of Silicon Valley which, since 2012, has seen more than 12,000 businesses made by 7,000 companies. This hub has done more business in the technology field than all the metropolises outside the United States combined.

It’s impossible to predict what the future holds, we can only look at what we have and know so far and try to understand in what direction things will evolve. Still, we know that inevitably new industries will emerge. At this point, it is possible to understand that the future involves Artificial Intelligence, the Internet of Things, autonomous cars and quantum computers; and these are just some of the topics that show the ability to face the future and win. On the other hand, we also have technologies such as Blockchain and Cryptocurrencies, that should continue to evolve and that also show great potential.

Despite the corporate level, where Silicon Valley’s impact is most easily felt is at the personal and individual level, as said by the testimonies of participants in previous editions of the Global Strategic Innovation Executive Immersion Program, managed by LBC.

For all this, we can consider Silicon Valley as a “state of mind” of permanent challenge where aspiration and dream are the engines for generating ideas, where the acceptance of risk and trial and error are a way to grow and develop companies and, above all, where the construction of networks of trust and sharing of knowledge and experiences are the true reward of this technological journey.