VST's predecessor was a famous R&D center in the Soviet Union specialized in power electronics and semiconductor design. The history of VST's innovation and R&D is rich with traditions crystallized over the last 30 years. Its management includes well-respected scientists, who have extensive experience in R&D and innovation.

Current Situation and Objectives

The lifecycle and interrelation of science and innovation is well known - with science converting money into knowledge, and innovation converting knowledge into money or new products, services, processes, strategies or business models. In today’s knowledge-driven world, and in new competitive environments, new technologies appear at increasingly shorter intervals, and innovation should be a continuous response to changing circumstances.

Until recently, innovation has primarily been seen as the means to turn research results into commercially successful products; however, not all research leads to innovation and not all innovation is research-based. Certainly research is a major contributor to innovation, and it is a vital component of VST's innovation strategy.

In its current stage of development, VST's R&D and its innovation processes are becoming the lifeblood of its activities. They are integral parts of its culture and values-driven tradition. Viasphere sees innovation as the vehicle for its corporate growth, built on constant reinvention. And its strategic intent is to boost innovation in Armenia by focusing on tomorrow’s opportunities, and to create competitive new business models that convert innovation to economic value.

The ultimate objective of VST's innovation strategy is to achieve corporate growth through new ventures such as new business creation through spinouts.

Innovation Process

VST's innovation process does not go through a traditional linear or consequential model, but includes phases that start with concept development and implementation, and end with market introduction. In order to effectively adapt to a rapidly changing business environment, they structure the innovation process through flexible models, where these phases overlap. Therefore, no design is. They also encourage improvisation during the innovation process in order to ensure a free flow of ideas and have the effect of incidental discoveries.

In the infoDev project framework, VST undertook six Hi-Tech pilot projects with extensive utilization of ICT. During project implementation, VST was using a balanced "loose-tight" style of leadership for effective innovation management. Such a leadership model alternates the creation of space for idea generation and free exploration, with deliberate tightening that selects and tests specific ideas for further investment and development. Looseness usually dominates in the early stages of the innovation process; in the later stages, tightening becomes more important to scrutinize the concepts and prioritize the selected ones, especially those which have a better chance of becoming commercialized. For example, out of six pilot projects implemented in the infoDev project framework, 3 projects were identified as having a better chance of becoming commercialized, while the other 3 still needed further investment and development. Currently VST is making steps to conduct local rollout of the developed product. VST believes that such an approach reveals the true economics of the business and can help enormously in determining how much money the new venture actually requires, and in which stages. VST conducts marketing research in new ways through early prototyping, experimentation and adaptation.

Leading innovation, which is a delicate and challenging process, was one of the difficult tasks while implementing the pilot projects. VST overcame such difficulties by encouraging expansive out-of-the-box thinking to generate new ideas, and to filter these ideas in deciding which ones to commercialize.

Brainstorming techniques were used by VST to generate a large number of alternative solutions to a problem in a short period of time. The entire chain of brainstorming from problem identification, idea generation, and idea selection was present during the brainstorming process. During brainstorming, VST also encourages cross-fertilization. As a result, VST combines and synergizes ideas. In order to effectively manage the brainstorming process and to make sure that the process is under control, VST sets aside a time to generate ideas, and a completely different time to evaluate each one. This is done to keep each and every idea alive until it is absolutely necessary to be withdrawn from the selection.

VST employees’ motivation is considered to be a very important aspect in the overall innovation management system. It is managed through, for example, performance bonus plans. Apart from this, VST tries to make the innovation process fun. VST makes sure that people aren't afraid of the possibility of failure. VST does a lot of experiments and learns from failures. VST's attitude is that transforming problems into opportunities leads to solutions.

Environmental issues and eco-effectiveness are considered seriously in the VST projects, as no business in today's world can afford to ignore the global demand for environmental quality. Concepts and tools such as cleaner production, life-cycle assessment (LCA), design for environment (DfE), and extended producer responsibility (EPR) were adopted during pilot projects implementation.

Outcomes

Within the infoDev project framework, VST focused on new product development jointly with several collaborative R&D actors. This was mainly achieved through technical assistance activities within the infoDev project, e.g. by hiring individual consultants from universities, academia, industry, etc. VST also recruited team members from different tenant and client companies and facilitated constant interaction among them. In order to receive better feedback, VST also facilitated regular cross-pollination of ideas with peers outside the Technopark. These cross-functional teams were involved at every stage of the innovation process and had access to every resource and technology that was needed for project success. These teams addressed technology, manufacturing, and marketing concerns with every new idea and experiment, and they worked to keep all these functions synchronized. They were able to determine quite early in the innovation process the fit between technology, customer and market needs, as well as manufacturing constraints.

The three Hi-Tech products deemed ready for commercialization:

• Digital density measuring system for high-precision measurement of green density of porous materials
• PV water pumping station with automated sun tracking system
• Hail suppression system, which operates on the base of suppressing acoustic waves generated by acetylene explosion in the special chamber

Three other projects resulted in ready-made Hi-Tech products:

• Diamond quality control system
• Energy-saving devices for various uses
• Power RF amplifiers.

VST organized Technopark on-site visits for policy makers, particularly for the Minister of Economic Development, the Deputy Minister of Energy, as well as several parliamentarians. Visits were used as a way to raise awareness about VST activities, and the synergy that business incubation can bring into the overall picture of economic development. They highly appreciated VST efforts towards Hi-Tech development in Armenia.

VST could showcase the strength of Hi-Tech/ICT and the essence of business incubation, as well as the role that technoparks can play in Armenia for the development of a knowledge-based economy. It was also an undertaking to gain more confidence in Armenia’s capabilities. VST's example eventually broke the overall perception among local policy makers and authorities that Armenia has lost all its well-established and respected traditions in Hi-Tech after the break-up of Soviet Union.

VST is considered to be one of the leading companies in Armenia for Hi-Tech/ICT development in Armenia. Currently VST is organizing a big event, the ArmTech Congress 2007, in San-Francisco for the promotion of Armenian Hi-Tech/ICT companies in the USA.

Current Developments

• As part of VST's commercialization activities, one of the local companies already placed an order for a similar PV water pumping station. Negotiations are also underway with the water supply company to install several PV stations in rural areas for water pumping purposes where electricity supply doesn’t exist.
• A principal agreement has already been reached with the Ministry of Agriculture of Armenia to place an order for at least 10 hail suppression systems. In the mid-term, negotiations are ongoing with the Ministry for the organization of a wide network of hail suppression system, where VST will be playing a leading role both in the design and implementation stages.
• VST's efforts and experience in PV applications, as well as active dialogue with the Chamber of Commerce and Industry of Armenia, enabled the Government of Armenia to include a project on organization of solar cells production in Armenia in the agenda of Armenia-Russia intergovernmental committee. The Government of the Russian Federation has already approved the project and in the near future mutual visits by leading institutions are planned for a detailed project design. VST will be the leading company from the Armenian side.
• Currently VST is actively negotiating with a local company to join efforts in the pilot production of silicon ingots built from local raw materials, which will in turn be aimed at further development of production to high-efficiency PV cells.
• VST is initiating two additional pilot projects in “green energy”: ethanol production and efficient and biological ways for hydrogen generation, storage, and usage.

Lessons Learned

• Achieve corporate growth through new ventures such as new business creation through spinouts
• Innovation as the vehicle for corporate growth, building on constant reinvention
• R&D and innovation process could be the lifeblood of your activities
• Balanced "loose-tight" style of leadership for effective innovation management proved to be successful
• Conduct local rollout of the developed products
• Organize the innovation process through a flexible and overlapping model where phases start with concept development and implementation, and end with market introduction.
• Conduct marketing research in new ways through early prototyping, experimentation and adaptation.
• Encourage expansive out-of-the-box thinking to generate new ideas, but also analyze these ideas to decide which ones to commercialize.
• Encourage cross-fertilization during brainstorming to combine and synergize ideas.
• Set aside a time to generate ideas, and a completely different time to evaluate each one.
• Employee motivation is a serious factor in the overall innovation management system.
• Try to make the innovation process fun.
• Makes sure that people aren't afraid of the possibility of failure.
• Do a lot of experiments and learn from failures.
• Transforming problems into opportunities leads to solutions.
• Innovations should start small, require only a small initial investment, few people, and a limited market.
• Purposeful and effective innovation comes primarily from analysis, a system, and hard work.
• Recruit managers with a high energy level, positive, pro-active, and buoyant with a "can-do" attitude.
• Strongly consider environmental and eco-effectiveness issues, as no business in today's world can afford to ignore the global demand for environmental quality.

For further information

URL: www.viasphere.com
Khachatur Khachikyan: khachikyan@viasphere.com