Innovation at the Frontier

With concern rising everywhere about taking care of our planet, the first thing you probably think of when you hear the term “sustainable” is the production of environmentally friendly goods.
Unless, of course, you are managing the finances of a non-profit organization. In that case, you are likely to think first about whether your organization is sustainable enough to be around in five or ten years. Countless organizations with worthwhile missions that depended on government or other donor support have faltered or disappeared when funding has dried up.
At first glance, industry associations may seem to be immune to this problem; after all, they are supported by for-profit business members. As long as Indonesia still has a widget-producing industry, then surely a trade association of widget manufacturers will thrive, won’t it? Not necessarily. Indonesian trade associations often count many small businesses among their members; with relatively modest revenues such concerns are not in a position to contribute hefty annual membership dues. Quite often, it is not membership fees, but support from the Indonesian government as well as financing from donor agencies that make up a substantial portion of association income.
Associations that fit this profile may not be in danger of ceasing to exist entirely, but they may be unnecessarily constrained. Government funding is unlikely to grow substantially and it potentially hampers an association’s ability to provide independent advocacy on regulatory matters. Donor income is typically project-based and rarely finances ongoing operating costs. Thus, venturing into new, high-impact but possibly costly initiatives may be difficult for trade
associations that remain reliant on these traditional income sources.
A better approach for associations that hope to carry out their mission effectively is to explore cutting-edge techniques for enhancing organizational sustainability. A number of resources exist to help forward-thinking associations do this (see the links list bellow).
What recommendations do they offer that apply to trade associations in Indonesia?
The essential, and most vital, first step is membership development. This does not simply mean attempting to expand the number of members in an association (which is typically what most associations unfortunately try to do). “Membership development” involves taking a step back and thinking critically about how the association is an asset to its members. What is it worth to members to be part of the association? What high-value services does the association offer (or, if these are limited, what services should the association begin to provide)? What value, in explicit financial terms, should be assigned to those services? One example of a readily quantifiable, high-value service that associations can offer is skill or technical training. Other assets may or may not be as tangible: examples include trade promotion and advocacy efforts on behalf of members that can lead to important revisions in tax, labor or custom laws. While such benefits may seem hard to quantify, it is important to do so and communicate this to members: for example, customs reform may lead to a significant drop in clearance times for imported components of a locally manufactured product, or to a reduction in the need to pay expensive
bribes. Trade promotion may result in new overseas markets for exporters.
When association leaders determine the value of their assets, they can set appropriate membership fees and create service packages that reflect the true needs of their membership.
Another important step in achieving financial sustainability is to diversify income sources. Every non-profit organization should strive to have at least three revenue sources. For industry groups, a particularly promising revenue category is fee for services.
Associations are well placed to know exactly what businesses in the industry they represent need – whether it is training programs, an information clearinghouse or website, technical assistance in gaining international certification, and/or other services.
Meeting these needs for a price can simultaneously benefit association members and round out the association’s revenue. Sophisticated association managers can also look toward developing partnerships with the private sector. A good example is the partnerships Exxon Mobil Corporation has developed with entrepreneurial associations in several countries. Exxon Mobil has underwritten the development of business centers that operate on a for-profit basis, offering
services such as training, meeting facilities, and other forms of business support.
As important as these strategies are, they are incomplete if they do not occur within a context of long range planning. Associations that thrive do so not only by taking advantage of near-term opportunities but by planning for their financial future.

Caesar Layton
SENADA Grant Manager
(Competitiveness at the Frontier, Mar 2008)
Links list:
• http://www.uneptie.org/Outreach/bi/practices.htm
This site is devoted to the role of industry associations in promoting sustainable development. It contains a collection of 18 case histories that introduce associations from more than 10 sectors. It also provides commentary from industry association partners such as governments, NGOs, and trade unions.
• http://searchsecurity.techtarget.com/tip/0,289483,sid14_gci994335,00.html
Provides tips on whether joining an industry association will be worth the cost, and how to make the most of membership. (The site is targeted to the IT sector, but the advice is applicable to all firms.)
• http://www.faa.gov/about/office_org/headquarters_offices/ast/media/vol_std.pdf
Offers a thoughtful look at the role of voluntary standard setting by trade associations, how such actions should be analyzed in the regulatory context, and benefits and pitfalls of such standard setting.
• http://www.nbsolutions.org/index.html
Targeted at all non-profit organizations, it helps them to develop business plans and to explore what earned-income potential each organization has, and if the potential is there, how to exploit it successfully.
• http://www.npgoodpractice.org/
This “nonprofit good practice guide” sponsored by the Johnson Center at Grand Valley State University offers best practices information in many areas relevant to industry association activity, including advocacy, evaluation, financial management, fundraising, governance, marketing and communications, organizational management, technology, and volunteer management.
• http://pemd-pdme.infoexport.gc.ca/pemd/tradeassociations/bestPractice-en.asp
is devoted to “Best Practices of Trade Associations.” Sponsored by Foreign Affairs and International Trade Canada.

You could be forgiven for thinking 3-dimensional printing (3DP) sounds a little far-fetched. It’s not quite printing as most of us know it, and going straight from the drawing board to a prototype you can pass around the room perhaps conjures up thoughts of a future age better seen in science fiction movies. But in fact such technology really exists, enabling companies to speed up design and production in the midst of what many call a design revolution, and it’s recently made inroads in Indonesia. Just how far it goes may be up to the ability of Indonesian industry leaders to think both outside and inside the new box.
3DP is a form of rapid prototype creation whereby a 3D computer rendering of a product can be quickly assembled in three dimensional form. A 3D printer, or “additive fabricator,” does this by analyzing the design data and “printing” layer upon layer of materials such as plaster powder, sand, and cellulose, until it’s built a small product prototype. It’s a bit like brick-laying, where
the bricks are a fraction of a millimeter thick and laid down by a machine that costs about
as much as a luxury car. Add enough layers and bind it all together and you’ve got a model of just about anything you can put into a computer-aided design (CAD) program: sports shoes, pistons, heart valves, electronics, or the kitchen sink. Printers vary in price, materials used, speed of processing, and prototype sizes, but the end result is more or less the same: a small model to be used for presentations and design proofing.
Chief among the benefits is the speeded-up time-to-market, as 3DP shortens product design time by allowing the faster production of prototypes, potentially allowing a company longer selling periods and time and resources to turn out more products every year.
Indonesian 3D printing pioneer PT Design & Teknik, a mechanical engineering company in Bandung, has been using the technology for three years, recently to make automotive prototypes for Suzuki and metal casing moulds for PT Stampo Prima Akurasi.
It says the technology is starting to catch on and change local design practices. “One of our observations is that product development in Indonesia is very slow, and it’s mainly caused by designers being unable to present accurate ideas of their product in real time,” says company head of marketing Syahri Andi Rivai. “As a result, many companies in the past have gone overseas for rapid prototyping needs to Korea, Japan, and Singapore, or other places where the technology has advanced into the mainstream. Nowadays, though, some of them have already turned to us.”
For example, a housing development company used to go to Singapore to create the mockup models of building developments it used for sales and marketing. Today the same company makes the trip to Bandung.
“Orders are increasing, although still below our targets because companies have yet to become aware of all the benefits of 3DP technology. University engineering and design students are starting to learn about it, though, and their arrival in the industry will likely change the shape of things.”
Regionally, Indonesia is still far behind in 3DP technology among Southeast Asian nations, with the smallest number of both 3DP service providers and users. Japan, China, and Korea have the most, with Singapore, Thailand, and Malaysia also advancing.
“This significantly affects their [other countries’] designers’ ability to create products and raise the number of new products each year. Their customers end up with more choices, and the company ends up with a better image,” Rivai says.
“Ultimately it stimulates all industries to become more competitive.”
In Jakarta, a handful of companies offer 3DP services, including the Tangerang based Serempak, which, in the last year, has also doubled as a reseller of 3D printers.
“Most of our business is on the services side, since the printers are an expensive investment for smaller companies,” says the company’s managing director. “Bigger companies that need regular prototypes, like Adidas, purchase printers from us.”
He says the company has seen a steady increase in need for its printing services, with recent orders coming from home furnishings, footwear, automotive parts, and home accessories companies, both for conceptual modeling and rapid prototyping.
The technology, he says, speaks for itself. “Compared to current systems for assembling prototypes, the 3D printers are 5 to10 times faster, and they provide fullcolor and high-definition resolution, and multiple models can be simultaneously produced for a lower per-model cost.”
“Currently many of our customers consider the return on investment too far off to make purchasing a unit worth it. If 3D printer manufacturers find a lower price point, though, I believe many competitive companies will invest in a printer of their own.”
Worldwide, prices will likely continue their downward trend until even small developers
can afford to design in-house. Further on the horizon, affordable printers could move beyond
today’s prototype production and begin producing final products of their own.
Let that be a note to Indonesian industry everywhere: Today’s designers are a printer away from being today’s producers. And with a new generation of engineers, designers, and printers at the ready, Indonesia industry may be poised for a faster age, at home, thinking about the possibilities of the new box.

Ben Otto
Contributor
(Competitiveness at the Frontier, Mar 2008)

SENADA and Microsoft Indonesia jointly held an award ceremony on 26 February at the Crowne Plaza Hotel in Jakarta to announce the three winners of the iMULAI competition. This competition, designed to highlight the important role that innovation plays in enhancing Indonesian competitiveness, solicited proposals for the design of innovative software and business solutions and generated 106 submissions.
The awards, attended by US Ambassador Cameron R. Hume, go to these three winners:
PT Dycode Cominfotech Development, for “Portmap,” a web-based and internetbased application for port management.
Laboratory of Logistics & Supply Chain Management, ITS SURABAYA, for “Application Software to Optimize Product Shipment Consolidation.” This software will permit small firms within an industrial cluster to consolidate their shipments, for more efficient allocation of transportation resources.
PT Sentra Solusi Integrasi, for its “Mobile Application Development for Inventory Management.” This application uses mobile devices (wi-fi) to perform a variety of inventory management tasks.
The winners are receiving hardware and software from Microsoft and up to $75,000 in grant financing for innovation costs for six months from SENADA.
(Competitiveness at the Frontier, Mar 2008)