When venturing into the promotion and development of innovation in Hong Kong, it's paramount that the industry value chain should not focus just on upstream technology research or the downstream manufacturing process.

Instead, the value-added service at the mid-stream level should be leveraged on as such a linkage can bridge the gap between research and development and the manufacturing process, while the local technology ecosystem should also gain from the vibrancy of the mid-stream technology cycle.

The theory rang true for Kevin Li and Anthony Chien - co-founders of PlayDate who started a hobby project several years ago when they prototyped an activity tracker using an accelerometer and a gyroscope and WiFi to monitor their pet dog. In the past few years, they realized they can upgrade the equipment to a full-fledged pet monitoring device to meet market demand.

After years of research, they launched PlayDate - a pet camera in a smart ball embedding motors, sensors, speakers, a microphone and a high-definition camera that enables pet owners to monitor their pets. Pet owners can also change the direction of the camera, hear their pets and send out commands to them.

However, Li and Chien weren't sure if the pet camera is really what pet owners really want. They also want to know what sort of technical problems would arise during the manufacturing process.

They then decided to join the certification program provided by US-listed component maker Arrow Electronics Inc and crowdfunding platform Indiegogo and established in August last year. Entrepreneurs resorting to crowdfunding via the Indiegogo platform will obtain free certification services provided by the component service provider. Most of the certification programs involve consumer products that are ready for production.

Arrow Electronics engineers will then analyze the design and manufacturability of each application. Projects deemed "ready for manufacturing" will be given official "Arrow Certified" badges on their Indiegogo campaign site to let potential investors know that the project is ready for production.

"The program puts us in touch with engineers who're really familiar with the supply chain management, as well as manufacturing. When we've a few open problems that keep us up at night and being able to talk to experts, this has been incredibly valuable," say both entrepreneurs.

After having secured accreditation from Arrow Electronics, PlayDate raised more than $729,000 in funding backed by close to 4,000 investors.

According to a World Bank report, crowdfunding is set to surpass venture capital as a key funding source, while the global crowdfunding market is estimated to balloon from $34 billion in 2015 to $90 billion by 2020.

FenSens is a technology startup manufacturing smart wireless parking sensors for cars. The "ultra-sonic" technology detects objects in a car's blind spots and alerts the driver using Bluetooth technology through their smart devices.

In the process of innovation, FenSens did not know how to find the highest quality components and source components that can keep costs down. So, they turned to the Arrow certification program for advice.

"It would be great to have Arrow's experts on our side, helping to take us from a prototype hobby company to a full-fledged business. It's always good to get the eye of another expert on your product design or production strategy. That kind of input, as we ramp up for production, is priceless," says FenSens Chief Executive Officer Andy Karuza.

With the help of the Arrow certification program, FenSens raised $170,000 backed by 750 investors.

PlayDate and FenSens are among more than 50 projects that have sought the assistance of the Arrow certification program, involving more than 45,000 investors worldwide and having raised a total of $5 million since the certification campaign kicked off in August last year.

"The certification program benefits both innovators and backers, and can bridge the two parties in the startup ecosystem," says Simon Yu, president of Arrow Asia Pacific - a subsidiary of Arrow Electronics.

The program is not only a big asset to startup enterprises, it's conducive to the development of innovation in Hong Kong.

Arrow Electronics opened the Arrow Open Lab at Hong Kong Science Park in June last year to provide free certification services for startup companies based at Hong Kong Science Park.

"The program allows local startups to conduct the technology testing procedure in Hong Kong rather than in Shenzhen, alluring local entrepreneurs to maintain their innovation businesses in Hong Kong," Yu reckons.

After a startup has obtained Arrow certification, it does not necessarily mean it can source the manufacturing components and related technology services from Arrow Electronics.

"We're not targeting short-term business orders. What we aim for is long-term development of the innovation industry in Hong Kong," says Yu.

"If the local startup scene is robust enough, we believe that Arrow Electronics Inc should also benefit from it. If Hong Kong' technology industry withers, our business will be affected."

oswald@chinadailyhk.com

(HK Edition 01/06/2017 page9)