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Saturday October 1st, 2022

Hatch-IFS collaboration to elevate innovation in Sri Lanka

Ranil Rajapakse, Executive Vice President & Chief Operating Officer, Sri Lanka Operations (right), and Jeevan Gnanam, the co-founder of Hatch

Hatch-IFS ChallengerX Incubator to elevate startups up global value chains with purpose-driven open innovation to solve global problems with AI and machine learning.

Two pioneering companies in the Sri Lankan tech community, Hatch and IFS, are collaborating on a new initiative to fast-track the development of open innovation through the startup community by elevating them up the global value chain. Called the Hatch-IFS ChallengerX Incubator, this initiative targets startups, tech companies and professionals with AI and machine learning capabilities to focus on building solutions for global problems.

“We wanted to do something very new and disruptive and create a new paradigm in open innovation in Sri Lanka. That is why we wanted to create Sri Lanka’s first AI-Machine Learning Accelerator,” said Jeevan Gnanam, the co-founder of Hatch, and founder of other initiatives that support the ecosystem. After initiatives such as LAN to bring angel investors together, he then co-founded Hatch as a shared co-working space for like-minded people and entrepreneurs to build innovative businesses. Hatch has since gone on to win the coveted Best Coworking Space in the world at the Global Startup Awards 2021 and Best Accelerator/Incubator at SAARC Regional Awards 2022.

“As one of the largest IT companies in Sri Lanka we wanted to be part of this, we felt that we had a duty as well to invest in this thriving tech ecosystem. So to do that, we saw some good synergies between IFS and Hatch to work on a common set of problems and build solutions,” Ranil Rajapakse, Executive Vice President & Chief Operating Officer, IFS Sri Lanka Operations, said. Rajapakse has been instrumental in building and growing IFS Sri Lanka and leading its efforts to develop the capacity of Sri Lankan tech professionals by collaborating with local universities on curricula, internships and scholarships.

The digital-tech-led industrial revolution has changed the way enterprises approach innovation. Traditionally, companies invested heavily in siloed and secretive R&D and innovation capabilities. Enterprises with big budgets were better at innovating. In the early days, startup entrepreneurs travailed for years to build successful companies, and there were more failures than successes. Closed innovation usually encounters some challenges. It consumes far too many resources and time, and solutions sometimes fail to satisfy market expectations because developers are far removed from the real world, where market upheavals are frequent and rapid.

Open innovation emerged as a solution to these problems. Now, companies do not need to reinvent the wheel and can access more market information to build better, more relevant solutions. Open innovation has significantly improved the speed of innovation, productivity and success rates for companies worldwide. Also, governments use open innovation to engage tech companies to build better solutions for public sector infrastructure maintenance and disaster management.

Open innovation is yet to take hold in Sri Lanka, and Gnanam and Rajapakse want to change that.

“In Sri Lanka, all corporates focus on sustained growth. In other words, they have an existing product which they improve upon, like a particular food product, they improve the packaging or change the formula to make it more relevant to a particular market. But these are what I call sustained variations and not disruptive innovations,” Gnanam explains.

Rajapakse believes Sri Lankan companies, including startups, need to focus on moving up the global value chains. “It is important to create a better Sri Lanka and move up in the value chain. For that, we need to do more high-end innovation and product engineering to create an edge and generate more demand and foreign exchange for the country. That is the opportunity we are trying to unlock with the Hatch-IFS ChallengerX Incubator,” he said.

With purpose-driven open innovation, Gnanam and Rajapakse believe Sri Lanka can fast-track tech industry growth, giving large companies and startups better opportunities to build successful global solutions. And the Hatch and IFS partnership is a perfect match to promote the concept of purpose-driven open innovation.

Hatch is on a mission to develop a thriving startup ecosystem and empowers budding entrepreneurs to incubate, collaborate and accelerate. It brings together innovation, creativity, knowledge sharing, and networking to provide opportunities for startup entrepreneurs to experiment with their ideas, acquire knowledge, share lessons and thrive together in a creative co-working space. Hatch has already pioneered open innovation in partnership with leading companies in Sri Lanka, including multinationals and is therefore well placed to connect and support prospective startups in the Hatch-IFS ChallengerX project.

“I think a startup coming out of Sri Lanka today does not have the perspective of a very mature software company and to understand a problem from a multi-faceted approach, which is what IFS brings to the table. So the perspective that IFS can bring will help startups see the bigger purpose of the problem they are trying to solve,” Gnanam explained.

IFS, a global tech giant, brings global perspectives and exposure that would suddenly elevate the game for startups by encouraging them to solve global problems. IFS Sri Lanka is the innovation and R&D centre for the global powerhouse in storeyed ERP solutions, IFS Global. With a team of 2,000 tech professionals, IFS Sri Lanka is the biggest product development and support centre within the group. It also includes a sales and implementation team that serves the Sri Lankan and South Asian markets and the IFS Labs, a special ops unit that looks at new trends and technologies and how to deploy these in their products. IFS Sri Lanka is focused on improving its enterprise applications software products with technologies like IoT, wearables, augmented reality, software bots and drones.

The Hatch-IFS
ChallengerX team

The Hatch-IFS ChallengerX Incubator aims to create IFS ERP solutions for global challenges using their existing platforms. It will offer qualifying startups a six-month residency at Hatch with access to world-class co-working spaces, events and membership benefits. They will also receive mentoring by international experts from Hatch and IFS’s mentor pool while the team with the winning idea will receive a reward from a pool of Rs3 million and other benefits from Hatch.

“We have a special interest in promoting the entrepreneurial startup culture within Sri Lanka, and there are certain benefits for us as well. It will accelerate the development of our suite of products,” Rajapakse said.

The partnership will initially revolve around creating solutions in predictive modelling and geographic information systems utilising the AI and machine learning talent in Sri Lanka. During the first three months of 2022 alone, natural disasters caused economic losses of US$32 billion. “There are tremendous opportunities that will open up for solving problems in this area,” Rajapakse says. The startup that wins the Hatch-IFS programme may go on to build other global solutions and create more job opportunities for tech Sri Lankans, and Gnanam and Rajapakse look forward to expanding this collaborative initiative.