Software solutions: Combining creative resources to develop the sector

The expansion of the global ICT industry over recent decades has made it possible for more nations to access and develop local technology. This, however, has also increased competition for countries that are in the early stages of building an IT sector. The Sultanate’s well-educated population and pervasive use of social networking technologies are some of the factors driving its IT sector development.

GRASS ROOTS GROWTH: Brunei Darussalam’s ICT planners believe that growth in an innovative tech industry must be bottom-up, rather than being driven by mega-projects. Thus, they have sought to create initiatives and incentives for entrepreneurship. The iCentre was founded in 2008 by the BEDB as the country’s flagship tech incubator, designed to offer support, office space and business matching services to budding technology capitalists in the Sultanate. According to Hui Kwok Leong, the director of the iCentre, 30 local firms have graduated from the incubation programme and two went on to win venture capital. Most of the country’s start-ups are internet-focused, building mobile apps for the Apple iOS or Android platforms, or offering their own web portals. For example, both of iCentre’s most prominent success stories — Infindo, an app developer and solutions provider, and Mesixty, a social-local-mobile innovator — work in the mobile apps space. Infindo was one of the first to win funding from Accel-X, a Singapore-based venture capital fund which has signed an agreement with Brunei Economic Development Board’s (BEDB) to fund entrepreneurs. With a contribution of $5m from the Sultanate, Accel-X will identify and fund the promising technology start-ups once they have passed the incubation stage.

GRANT FUNDING: Another key component of the ICT funding and development infrastructure is the BEDB’s Local Enterprise Applications and Products (LEAP) Grant. This scheme provides financial assistance for developing prototypes that have innovative technological content, commercial practicality and export potential. First awarded in 2010, LEAP grants are available to companies that are at least 50% locally-owned. Most recipients work in ICT, agriculture and aquaculture, and engineering fields, according to the BEDB. To date the BEDB has awarded 23 LEAP grants, of which 15 went to ICT or multimedia firms.

REGULATORY ROLE: The Authority for the Info-communications Technology Industry, the telecoms regulator, also plays an important role in promoting local ICT companies. “The ICT industry, particularly start-ups, still needs a lot of help, and we expect to always be supporting local companies,” Hj Yahkup Menudin, the chief executive of AITI, told OBG. In October 2011, AITI worked with DST, BEDB and iCentre to launch the Future Fund, a seed capital fund designed to finance start-up companies before they reach the venture capital stage. Three or four firms every year that demonstrate commercial potential will receive seed equity money, which gives investors a stake in the firm and helps sustain the entrepreneur before the business generates revenue. Recipients of the fund will be incubated at the iCentre, where they will undergo a mentorship programme before participating in the traditional venture capital process. According to a press release issued after the three organisations signed a memorandum of understanding, the areas targeted include “gaming, mobile applications, national broadband infrastructure-related services, content aggregation and content production”.

AITI also offers other facilities for funding and training entrepreneurs, including the GRANT programme, which assists ICT and digital media producers with the development, enhancement, ownership, or marketing phases of their development. One of AITI’s main aims with the GRANT programme is to encourage local production houses to develop creative content – animation, e-learning and other forms of digital media. The programme, launched in 2010, entered its fifth round of funding in September 2012, with offers of up to BN$250,000 ($194,700) per category. As of February 2013, 12 grants had been awarded, with the fifth round providing a total of BN$464,800 ($361,986) worth of funding to four different winners.

AITI has also pioneered a programme designed to encourage the use of RFID (radio-frequency identification) tags in logistics companies and halal certification programmes, the latter of which is a key component of Brunei Darussalam’s industrialisation policy. A pilot project run in coordination with the Ministry of Religious Affairs has selected a private partner, John Harith Technology, to develop the Halal Food Traceability System. Under the scheme, chicken and other meat packages will be tracked by RFID tags from the point of production all the way to the retail destination, where RFID readers will enable consumers to verify the origins and contents of the meat.

Finally, AITI established a subsidiary in 2012, StarVentures, to unite entrepreneurs with investors, and corporate and international partners. The international aspect is crucial for firms, since the local market requires an outward focus. “We are trying to tell businesses: when you wake up in the morning, don’t look at the Sultanate. You need a regional or global market,” Hj Yahkup Menudin told OBG.

GETTING CREATIVE: Brunei Darussalam’s ICT promoters believe the country may have a comparative advantage in creative multimedia, especially technology-oriented fields like animation. With the Asian media and entertainment market scheduled to grow 6.5% annually, from $395bn in 2010 to $541bn in 2013, there is a lot of market share to be won. According to Hui, a recent trip by iCentre administrators and incubated companies to Silicon Valley and Toronto reinforced the importance of developing a creative industry in the country. “The creative multimedia industry has a lot of potential for the Sultanate, but it will require more skills training in the latest technology and techniques,” Hui told OBG. “Our long-term goal is to create local production houses that can produce ‘made in Brunei Darussalam’ feature films, especially for the underserved Islamic market around the world.” One project currently being pursued by a local company in this sector is billed as the first Bruneian 3D animation series. Ambuyart Animations Company, which received BN$180,000 ($140,000) under the AITI GRANT scheme in 2011, will produce a six-episode series to be aired in 2013.

To jumpstart the animation industry, iCentre encourages relevant government agencies to fund short animated films. The BEDB has also helped support the multimedia industry by establishing the Creative Arts Facilities (CRAFT), a shared lab offering equipment, workshops, mentoring and networking opportunities. In January 2013, the BEDB announced a partnership with Autodesk, the American 3D graphics software firm, which will co-produce a series of seminars, trainings and certifications at CRAFT.

ORGANISATION: The research centres and other supporting institutions will supplement grants and computer labs in developing a creative ICT industry. Clustering academic, industrial and commercial institutions, like in Silicon Valley, may be more difficult in the Sultanate due to its size, but it will be imperative for success. In 2010, the BEDB established the Knowledge Hub as a technology-based research and development facility. It showcases the latest in information and communication technologies, as well as focuses on computer modelling and simulations. The Knowledge Hub is also home to the country’s first commercial green building and several innovative energy-efficient technologies. Additionally, the Creative Industries Research Cluster (CIRC) at the University of Brunei Darussalam was established in May 2011.

Players in the sector claim better training and more creative spaces, like the Knowledge Hub, are needed to nurture creative industries and make them competitive on a global level. “[Locals] must have the skills in order to compete, and they need good products,” said Zahari Hamidon, an artist and lecturer at the CIRC, told local media in July 2012.

The Ministry of Industry and Primary Resources (MIPR) has pledged to identify and implement programmes that will develop small and medium-sized enterprises in the creative industry. This would encompass funding, incubation and internationalisation programmes. In May, a forum on the National Creative Industry Policy also agreed to establish a governing body and a master plan that will strengthen and enhance the creative industry.

Even with extensive government promotion and support, the small size of the private sector and the cost of accessing ICT infrastructure will continue to challenge the country’s attempts to develop a strong ICT industry. As Hui, the director of iCentre, told OBG, “For the Sultanate’s local start-ups to really grow and develop international presence, the ICT infrastructure must be cheaper and more reliable. Fibre-to-the home will help, but the challenges are end-to-end reliability and cost of access. Having reliable and less expensive access costs will help spur creativity and innovations in contents and business models.”

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The Report: Brunei Darussalam 2013

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