From Innovation to Entrepreneurship: The ITESM Experience

Interview with Arturo Molina, vice-president of Research and Technological Transfer at Tecnológico de Monterrey

By: César Guerrero Arellano

With a vision set in the future, the Tecnológico de Monterrey has taken a risk in transforming the university teaching model. A pioneer in promoting entrepreneurial culture in the country and in the use of technologies in education, their bet must be taken very seriously. In this interview, its vice-president of Research and Technological Transfer explains how they will train graduates with skills that go beyond discipline. Dr. Molina has extensive international experience in promoting technology-based SMEs in which he himself participates and thanks to that, he can identify why current incentives are not enough.

The World Economic Forum cites a study that estimates that 65% of children in primary school today will have a profession that does not yet exist. Considering this context, what are the main challenges for higher education institutions?

First, to continue developing mathematical, reading and logical reasoning skills, which are useful in any discipline and profession to understand and solve problems. Likewise, universities face the challenge of changing their disciplinary approach to one enriched by differentiated skills, like technological culture, given its growing influence in our day-to-day lives. At Tec de Monterrey we have also started working with the skill of unlearning, i.e. when facing new behaviors, business models and technologies, not always doing things the same way is necessary. Faced with an uncertain and ever-changing world, with jobs that do not exist today and constant setbacks, resilience and risk capacity are essential.


When Google knows it all, what should be the most valued alumni competencies?

Google has information about everything, but it doesn’t know everything. It cannot process all the knowledge, nor can it reason everything. At Tec we have identified seven competencies that we call “the seven Cs,” and these are: self-knowledge and management, to build professional and personal wellbeing projects; innovating entrepreneurship, that allows creating innovative and versatile solutions; social intelligence, to create effective collaboration and negotiation environments; ethical and citizenly commitment, indispensable to develop projects seeking to transform the environment and common wellbeing; reasoning to face complexity; oral and written communication in many languages; and digital transformation to build solutions through the intelligent incorporation of cutting edge innovations.


What are the main characteristics and objectives for your new educational model?

We call it Tec 21 and started designing it five years ago. We tested it in various academic programs and finally launched it in August 2019 for all Tec degrees. The seven Cs I mentioned are integrated like arms of a spine, the latter being discipline based (physicians, engineers, administrators, lawyers, designers…). A second aspect of the model is that, given that higher education does not apply the knowledge that is acquired, we are guiding learning towards the solution of challenges; based on what they have learned, every five weeks we present students a real problem to solve, problems posed by governments, companies or society. Third, we made the academic program more flexible, based on paths. Some students may have not defined what they want to be, and so they will find three blocks: the first year and a half will be dedicated to exploration, having access to disciplines, such as social or health sciences, business, engineering or creative studies. They then choose, focus, and finish core subjects they chose three years after starting their degree. In the last year, they specialize in something. It is challenging; nobody has ever dared change the entire syllabus. We are worldwide leaders in this.


How did the student community and teaching force take this, what is your conclusion?

We very much took into consideration the students and learning processes in the design, so they are very excited. An important factor here are the lecturers, those who created it. Addressing a challenge with students and seeing how they will apply their knowledge to searching for solutions is much more intense than traditional lecturing, it requires other types of skills. It involves major academic and work efforts from everybody. We have been asked to adapt the rhythm, but we are convinced it will make students very successful. In Europe, the challenges have been applied to some academic programs, not the entire university, like we did. So, many institutions have come to see how we are doing it. Universities have done almost the same thing for centuries; we must change in order to generate alumni who can face the challenges of the future.


Inclusion or high performance: where should universities head?

I don’t think these concepts are opposites; they are very important, and should be aligned and added.  Naturally, human beings have different ways of learning: in a visual, kinetic, abstract, etc. way, so inclusion means equal opportunities for all and high-quality education, starting in elementary education. The challenge is for universities to educate 100% of applicants with world standards. As Thomas Friedman said, “the world is flat.” Mexico and the world need graduates who can compete internationally, and our country will be more competitive if we create conditions so they stay in Mexico with good professional growth opportunities.


What are the biggest Tec contributions in innovation and technological development?

It has had two major contributions, where innovation does not only concern artefacts. The one that stands out most is its entrepreneurial culture. We were the first university in Latin America to promote it in a mandatory way, not only to create companies, but as a spirit of resilience, leadership and teamwork. As a classical entrepreneurship, we are the only university in Latin America in the Princeton Review of entrepreneurship universities, coming in in eighth place. As part of our 75th anniversary celebrations, we conducted a study last year with alumni and we discovered that 41% of our graduates, over 200 thousand, created companies (of different kinds, some NGOs) that generate close to 223 billion US dollars a year, which is 19% of Mexico’s economy. The second contribution is the educational use of IT and communication. We were the first university in Mexico with Internet and that used computers significantly, as well as in developing virtual portals to train our teaching staff and students. In the classroom, we use many technologies, like virtual and augmented reality, holograms, among others.

This year we launched an innovation hub to open up business opportunities to technologies and Mexican entrepreneurs in China. With it, we transferred our remote laboratory model to the University of Hangzhou Dianzi, of which Jack Ma was a professor. It is a physical laboratory with a virtual agenda, giving access to experimental education to anybody in the world, 24/7. It was inaugurated a few weeks ago, with the chancellor of the university, and we have now been asked for other projects that we could scale up. With this technology we are breaking an investment limit in physical laboratories, which will have an impact in years to come. If we manage to have an impact on the Chinese economy, which amounts to 400 million people, as Tec de Monterrey, we will be major education transformers in the future.



Do university researchers have the right incentives to get involved in industry and contribute to the country’s technological development?

Behavior depends on evaluation. All around the world, incentives are aligned to the generation of knowledge. If you are evaluated every year and patents take up to three years, you might as well publish academic papers. And then comes the next step, connecting that new knowledge to the generation of a new commercial product or service and apply it to a new business model. This requires managers of these process in universities, it requires to build a different team that includes at least one entrepreneur. In Mexico, we must rethink the incentive system to reward the economic or social application of new ideas.


Do companies have incentives to better liaise with universities?

I have worked in many Mexican and international companies, and there is no culture of collaboration. We must understand that the cycles of a company and those of a university are different and that it is not easy to connect them. In the specific case of Mexico, companies lack the risk capacity to bet on new technological developments, since they generally seek a quick return on their investment. Companies with no innovation or research groups hardly connect their process with experimental scientific dynamics. Hence, economic and fiscal incentives must be medium and long term. The companies we work with have incipient innovation groups, which are allowed to experiment, and so it is easier to establish two or three-year programs with them. Others, or rather, multinationals like John Deere and Nestlé, have very consolidated groups and they know how to carry out this process. They look for a researcher who publishes on topics they are interested in, they give him resources or a chair, and a way to his technology of processes or product. They do so professionally because they have learned it is the way to do it.


How do you see Mexico’s current situation in terms of research and development?

Mexico has achieved something very important: a critical mass of specialized talent, a little over 28 thousand people registered in the National System of Researchers. It might be a small amount compared to other countries, but recognizing researchers for their work is the basis to foster technological research and development. That is what new economies like Israel, Singapore or China did; the latter made a huge investment to repatriate its talent allowing them to keep relations with the universities abroad from which they came; it also destined a significant amount to the development of its local talent, and so from a manufacturing country, it became a technology innovating one, surpassing the United States. Singapore gave incentives to attract researchers from around the globe, and Israel created a network with its diaspora.

In Mexico, we could link the local critical mass we have abroad and create incentives and programs to connect innovation with entrepreneurship. The risk capitals in Mexico are escalating; they do not finance disruptive innovations. I don’t know of any local fund with that focus, the infamous angel capital. It is a high-risk portfolio, but it also has high profits. It is very difficult to create knowledge-based economies without these instruments. It took me 12 years to consolidate my engineering systems company, which digitizes industrial processes, because there was no way to get a loan of three million pesos to scale fast. I could only turn to friends and family. Today, it has 150 employees. I had another company with which I developed in 2003 a web-based technology called “Manufacturing Execution System,” but I could not scale it. The world moves at high speed and so you have to do it quickly. The Germans, for example, give new companies that first opportunity to test a product in their processes.


What should companies do to improve their performance in technological research and development?

In my first years at Tec I worked a lot with Mexican SMEs. I came from England with models to improve their production processes. I found that their capacity for action was very limited compared to US and European SMEs: since they need to cover the payroll every two weeks, they concentrate their talent on sales and production. They need technology and to learn to do their processes differently. Hence, risk capitals are not enough, since government incentives are essential for their technological innovation and development processes.

As a technological entrepreneur, the toughest thing is closing the first sale. Therefore, we are exploring in Nuevo Leon a similar model to the one in the Basque Country where big tractor companies, Mexican or foreign companies with a risk culture, are giving technology-based companies an opportunity to connect to their production processes. Although they still don’t have a defined product or process, they are given medium- and long-term spaces to develop it and show it in their plant. With time, I think it will have very good results.


How can cooperation in innovation and development increase in Mexico?

One of the differentiating elements of our 2030 plan are the poles of research, innovation and entrepreneurship. In order to develop technology-based knowledge or an entrepreneurial economy, public or private sectors step out of the limelight; so, in these city and regional ecosystems, Tec does not play alone.  Universities should give their researchers time, one or two years, to look for funds to market the technology or the patent they developed. If this were not successful, at least there was a learning process. Universities do not promote this because they still think training work is the most important. At Tec de Monterrey we are already doing it, which is what happened in China: the professor left six months with his/her team of students to a total immersion.


What policies would help intensify technological innovation and development?

Tax incentives are an investment for the government, because if the company grows, it will pay more tax. There was experimenting with public and private funds in past federal administrations, and this should continue. Israel did it, with 80% government and 20% private capital. Today, it is completely private.

The government has a dominant role, it can give the first opportunity to national companies like user and client of technological development. Many companies start in China selling to the government. In this process, digitizing is the best way of avoiding corruption, it allows public information to be transparent and for society to witness the transfer of funds. Citizens must assume that the money spent by the government is theirs and decide where they want it, demanding the funding of risk capitals and support programs for the development of local and regional ecosystems. It is much easier to work with a city, with a region; there are emotional, economic and social connections. If our ecosystems work well, they will evolve into knowledge economies, first at city level, then at regional level.


How can universities accompany companies in the digital leap and in the demands of the knowledge economy?

Universities must spread technological culture so that people understand the implications of any technology in their development and in changes in their lives, not only technologies related to information and communication, but also nanotechnology, biotechnology, artificial intelligence, and others. Difficult times will come if we do not properly move from labor-intensive environments to the new knowledge economy. People need education, health and quality work, as well as a good social system in which to develop. Technology already exists, it is a vehicle, another mechanism, but its political and economic implications where human development is more important are not clear. At Tec de Monterrey we have a vision towards 2030 that places human beings at the center of things in order for them to fully develop.