Monthly Archives: September 2014

Relentlessly building a business in the Third World

The incredible effort we put in to build our business makes us ask the question occasionally what are all the sacrifices for. The incredible energy (life), money, time expended; there is nothing else anyone of us can do but devote every waking life to building Sunfu Solutions. We are not in Silicon Valley, or New York, or Seoul. This is Manila, where four-hour traffic, red tape, and the human resources challenges are the stuff of legend. So we will list some of the reasons why we do it, when we can just walk away from it all:
1. The artist in us drives us to create something beyond and bigger than us.
2. The challenge of sharing and educating those who join us in our journey; hoping from employees they will become and transform to real partners.
3. The challenge of raising health care standards, solving health care issues, and making sure the bottom of the pyramid is considered in the equation.
4. The possibility of building something great.
5. Family: not just our (the founders’) biological family, but the biological family of those who are part of this company as partners, employees, investors. We hope we can be a lasting and innovative company that will attract the next generation to build where we have left off. We hope our values are such that the next generation will want to pass these to those coming up after them; and that a truly generational company that contributes to mankind will emerge.

It takes a lot to build the kind of company we want to become. But all these years of relentless work, we do know we are becoming that company we want to become. Let’s get back to work.

Interview: Reynaldo Vea, PhD (Academic Administrator, Engineer, Scholar)


We have opened discussions in our website with all kinds of leading medical doctors, and with the best among them, there is a clear recognition that for our health care to improve, we have to have thriving manufacturing industries (good jobs are crucial to good health), research (to be at the cutting edge of knowledge for health, but as a consequence in order to start real manufacturing), and quality basic science education (in order to build a culture of producing goods and knowledge). We are starting a series of interviews with those who can start the conversation from a non-medical doctors point of view, from academics, industrialist, politicians. We start this series with Reynaldo Vea, Ph.D, who is the President and CEO of Mapua Institute of Technology. He graduated from the University of the Philippine with a degree in Mechanical Engineering. He earned his Master’s Degree in Naval Architecture and Marine Engineering at the Massachusetts Institute of Technology, and his Doctorate Degree in Engineering at the University of California at Berkeley.

You are an engineer, teacher, administrator, scholar: which one is your predominant role for you?
First and foremost I have always been an administrator of schools. I did professional practice for a short time, but never in the Philippines. I designed off-shore supply vessels for the Gulf of Mexico. I designed container ships and tankers as well in San Francisco. But this was not for any long period, as I immediately came back to the Philippines to begin my academic career in the University of the Philippines.

What was the motivation in coming back to the Philippines after having earned your degrees in the United States? Or did you belong to the generation that still wanted to come back?
Basically we wanted to contribute to building the research capability of the country. We did hear about many coming back and getting very frustrated because the research infrastructure was not there, and so they go back to the United States. We wanted to break that cycle. When we came back, there were no vacant positions in UP, and they could not give us the title assistant professor. We jokingly referred to ourselves as api , the Filipino word for oppressed, which we used as an acronym to stand for the association of permanent instructors, because we were still pegged as instructors in the University of the Philippines, in spite of the fact that we already earned our masteral and doctorate degrees. But the administration moved quickly and gave us support.

Engineering is now the priority for many things and programs in the University of the Philippines. During the term of President Gloria Arroyo, she donated a big sum for the infrastructure of engineering.
Yes, but it started long ago, it was a long process, which we can see the fruits only now. During my time there, in the 1990s, because the stars were somehow aligned that the president of the university, Dr. Emil Javier, is a scientist; and the President of the Philippines was Fidel Ramos, who is an engineer: it was at that time that the concerted effort to build the student base, the infrastructure, the profile of engineering was really strongly pushed. We presented even at the level of the president’s cabinet as to a national vision for the University of the Philippines School of Engineering. The land earmarked for engineering where the buildings are now being built came from that time. But a lot of ground work was also already done at the time of then Dean Francisco Viray, who I served as associate dean. Dean Viray of course eventually became Secretary of Energy during the term of President Ramos.

Do we have research projects from the University of the Philippines that we can show the world and be proud of?
From what I have read of what are on stream, we may not be in the map yet, but for sure we have the PhDs who are capable of high quality research. I have no doubt something will come out of it, but we also have to set up the infrastructure, which I think they are doing in the University of the Philippines, for the commercialization of the research output. There is a real and credible improvement moving towards producing very high quality research. There is a technology transfer office now in the University. In the area of Radio Frequency Identification (RFID), or the transfer of data using the magnetic field, there are interesting advances. In the area of optics in hard disk drives there are also interesting advances.

When we train great engineers, do we have jobs for them when they are done with their studies?
The semiconductor industry and the electronics industry have been pleading for more and better engineers all the time. They are crying out for people who have advanced degrees. Of course if we want to move up the value chain in electronics, we will really need engineers who have advanced degrees.

Are we still at the level of assembling chips?
No, we are already producing products based on chips that are competitive globally. Integrated Microelectronics Incorporated of Ayala is ranked eighth worldwide in the microelectronics industry, which is great, but overall the developments have not been fast enough.

Is manufacturing still possible in the Philippines?
I think the stumbling block right now is China. They still manage to manufacture at a very low cost. It will be very difficult for us to compete. However, the wages in China are said to be rapidly increasing, and maybe that will present us with an opportunity. But we can’t just have the engineers, we also have to have highly trained educators, researchers, managers, industrial park designers. It takes a lot to have that system, culture, and infrastructure that can produce ground breaking technology-based products.

I have heard Dr. Roger Posadas arguing that South Korea and Taiwan are great models for the Philippines, but I argued that the United States poured in large amounts of money to help these two countries because of the cold war politics at that time.
Well yes, there is one factor that we don’t have; there are no Filipino engineers and managers in significant numbers, and if we have them studying and working abroad, we want them to come back and sacrifice, and with government support, to build and innovate here.

Morris Chang is an incredible story, of bringing chip manufacturing to Taiwan. He isn’t even an entrepreneur, but with government help, he was able to build Taiwan Semiconductor Manufacturing Company Limited (TSMC), which has become a global powerhouse in manufacturing.
They did a study in UC Berkeley and they took snap shots of the first and second generation leaders in research, engineering, and management of Silicon Valley. The Filipinos are just not there in substantial numbers. While people from India, Taiwan, Japan, South Korea are there, and many of them went back to their country, using their connections in the United States, to build industry in their home countries.
We also need to scale, as the UNESCO benchmark would say we need 34,000 research scientist and engineers for our population of 100 million, and DOST last calculated that we only have 13,000. So how do you jump from 13,000 to 34,000? And the ideal of course is for that 34,000 to have PhDs. We can do it in 10 years if we produce around 2,500 PhDs a year: again, the question is how do we do that? You have to send out at least 2,000 scholars to do their PhDs every year. The government we now know has the money, but the money just ends up in the wrong hands.

Will these engineers come back if we send them abroad to study?
The record has actually been good. I worked administratively as associate dean to send 20 scholars abroad for their PhDs, and everyone came back, except for one, and the only one who did not come back paid the University for his studies. We should not be scared. People do come back. To stay here is not only a question of monetary rewards, you also have to give them an environment where they can find fulfillment.

So when they come back, don’t get them stuck in teaching Physics 101?
Or worse, make them academic administrators. (Laughter)

How does the University of the Philippines compare with say other top ASEAN universities like the National University of Singapore? Are we okay?
Yes, no doubt we are okay. Our problem is we have too few of our students and faculty going out for their PhDs. But those who do go out to earn their PhD, most do well academically, so that is already an indicator that we are not missing anything in our own universities. I myself when I went to the Massachusetts Institute of Technology found that my training here in the Philippines prepared me well for what I had to face abroad.

In going to MIT, what struck you most that made you realize, this is a First World institution?
For sure it is their research. Of course when in UP we were analyzing motion of bodies, for example, in 2D, while in the MIT it was already in 3D, so there was the facilities advantage, but this was because this was MIT, as most universities at that time in the US were also still using 2D. And of course in their undergraduate engineering, they already had advanced engineering mathematics. But other than that, there is not much difference. I do remember they did really overload the students with reading materials.

When you say overload, does this mean it was still humanly possible to digest all the materials given?
No, impossible to digest everything. But that is the atmosphere they want, the atmosphere is very competitive. The best will survive. The system in MIT was called being graded on a curve, so some are sure to get As, and a certain number flunk. They like to say getting an education in MIT is like drinking from a fireman’s hose. You won’t be able to catch everything.

I remember listening to an entrepreneur who has made it big saying the only advantage he had of going to MIT was that in college in another university, he was thought of as the smartest guy in class. When he went to MIT for his masteral degree, his first exam grade was so low, he ended up locking himself in the dorm to cry. He said the humbling experience has been good for him.
Oh yes, there are many stories like that. It really happens.

Is this why some of the research of their graduate students are good?
Yes, but it is not just that: but there is a whole organized effort to support, publish, commercialize the research results. You become just part of a large undertaking. Even if you just contribute a small but original research to this large undertaking, then you become part of a big breakthrough. It is not just one individual in a lab, although there is that as well.

How was your transition from U.P . to Mapua?
Well, when I first came I had the reflexes of an administrator of a state university. Mapua’s existence is only made possible by its wits, since it is a private enterprise, meaning unlike a state university which will always have a budget no matter how small, we have to find a way to generate resources to keep the school going and to keep upgrading. I have been lucky that the stockholders of Mapua have been very supportive. In my first year here there was hardly any computer, within a year we had almost 2000 computers. We were the first to get a gigabit network, when no one else had one. We invested a lot in infrastructure. Our proposals to keep improving the standards are all supported by the school’s owners. Of course UP has changed now, and faculty can also now propose ambitious projects. We were also the first school in the Philippines to be accredited by the US-based engineering school accreditation body. We have also raised the profile of the faculty. We now have the full-range of the masters programs in engineering, and we have five PhD programs.

What kind of engineers does Mapua produce?
I think we produce engineers that are out in the field, the problem solvers of the industries that require engineering. Our students, when they graduate, I think tend to stay in engineering for a long time. But we also want to go beyond that, and so we have a building that will be finished soon, which is a building that will be devoted to research.

Are we able to retain young engineers in the country?
Many leave, but what can we do but to keep training engineers.

We are a population of 100 million. Even Israel, a very small country, admittedly a great recipient of US money, has been able to scale their software development for example. People were saying in that Roger Posadas talk in the Diliman Book Club that maybe what we have is a cultural problem. The culture of consumption is just too strong now, for example.
If you read Nick Joaquin on our supposed culture of smallness, maybe there is some validity in that. We are not ambitious enough. Japan in the 1950s was being laughed at. People said, don’t even buy toys made in Japan, as it was supposed to be of such bad quality it was dangerous to a child’s health. Samsung of Korea was considered low end.We have to want to make it badly enough, the way these countries did when they decided they wanted to become an export-led industrial country.

Maybe we should just give up, for those of us interested in manufacturing. I read an article where John Gokongwei said the best chance of the Philippines in manufacturing was up to the 1970s, and after that, the chance passed us already. Dado Banatao in the ASEAN Integration forum organized by the AIM basically answered my question by saying it is impossible for us to have a real manufacturing, since even Singapore has given up on this.
I disagree. The story is never finished. No outsider would have been able to predict the South Korea of today just 50 years ago, or the China of today just 30 years ago. The face of manufacturing is changing. If you can plan for the coming changes, like hyper automation, maybe you have a chance. The systems and process do not remain static and unchanging forever.
For me we just have to get the politics right, maybe that is not the right term, but we need some kind of process of maturation. We must also remember that the story is not yet over. Countries which supposedly got it right, also sometimes unravel all of a sudden; those considered hopeless are suddenly emerging as industrial giants in spite of say their size, or previous leaders.

What can industries do?
I think industries should just tackle the basic issue of productivity, we have to increase our productivity. We have to educate our labor force to be better, more productive, and more imaginative.

If you look at the instability of economies in Europe, you can see the most stable is Germany because of manufacturing. In Asia, Korea is also powered by manufacturing, even if they are greatly threatened by China.
Yes, you really need to create things. Harry Turman, after World War II, when he was president of the United States, asked what were they going to do now that the war was over and there was so much they had developed in the sphere of technology because of the war. Vannevar Bush, the inventor of the radar and vice president of MIT, answered in his capacity as one of the key advisers on science to the government, that their national mission was to dominate commerce through science and research. Basic research in schools and applied research in industry have become cornerstones in the rapid growth of the United States after World War II. You really have to work on the basic science before you talk about anything else. We must also realize that it did not happen overnight for the United States. There was a lot of preparation and confluence of events.

What books would you like to share with our readers.
I forgot the title, but there is collection of science fiction stories by MIT professors and students I thought was very good in showing me the future, or at that time the immediate near future. I thought the collection was amazingly accurate in many of the speculations of the authors about the future. Nicolas Negroponte’s Being Digital may be a bit dated, but I thought it was very perceptive in showing the relationship of technology and society. These two books I would recommend to anyone interested in issues about technology and the future.

There is now some criticism of these young and new billionaires channeling their wealth to space exploration and some such grand projects. Some argue the money is best spent elsewhere, and these capitalists are now determining the science agenda by the sheer fact that they have the resources. What do you think?
Science is always about exploration. I am all for it. If we stop exploring, what will happen to the human species?

Many of the doctors we have talked to, like ophthalmologist Harvey Uy, like you, talk a lot about the need for a good basic science education. Please give us an idea what is a good teacher. Who are your good teachers in engineering? Why were they good? What is a good basic science education?
Edgardo Pacheco and Oscar Baguio were my favorite engineering teachers. You take their exam without a calculator or a slide rule, and maybe you can finish the exam in 15 minutes. They were not worried about your not having to do a lot of numbers crunching, but it is really the principle behind the problem that they want you to understand, not the numbers crunching. I look back and realize their exams were really elegant and well-thought out. They were very committed teachers. They really provide students with the right environment to learn. You could really see their commitment to teaching.

Filmbox: a bad business model


Filmbox, which you can find in smart TVs like Samsung, will offer you a few days free trial only to reveal later on in your credit card that the few days free is actually an additional free days from what you already bought.There is no free trial. Such marketing strategy to get one’s $5 USD guarantees this company won’t amount to much in customer-service. You inquire about it, and there is no response. This is an important reminder to us that: We in Sunfu Solutions, Inc. commit to NEVER do deceptive advertising.