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Introduction to The Honeycomb Global Electronics Hub
November 2021

 

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Introduction to The Honeycomb Global Electronics Hub

November 2021

In this episode of the Global Electronics Hub Podcast, we engage in a discussion with Mr Ron Smith, Director of Honeycomb Global UK. We discuss what The Honeycomb Global Electronics Hub is all about, whom it is meant for, which geographies it is present at, and how a global collaborative approach could truly accelerate growth of the electronics industry as a whole.

Introduction to The Honeycomb Global Electronics HubGlobal Electronics Hub Podcast
00:00 / 30:17

"In an era of artificial intelligence, we’d like to use real human intelligence to ease your expansion needs."  - Mrs. Ranjana Pathi, Director, Honeycomb Global India.

RANJANA: Hello, good afternoon! This is Ranjana Pathi from Honeycomb Global India. Today I'm speaking with my partner in the UK, Mr Ron Smith, who is the commercial director for Honeycomb Global. 
Ron I have you here today to tell everybody what the Honeycomb Global Electronics Hub is all about. It is a network for electronic companies globally. That's simplest definition anyone could put on it. We want to know more about the ideology behind it, what we're trying to solve and what the potential members will benefit from this and who it's meant for. That's the idea of the session. And I'd like to first welcome you and get a bit of an introduction about yourself, about the company where we're coming from for The Global Electronics Hub.

 

RON:  Ok thanks Ranjana. So The Global Electronics Hub, where does it come from? What's the ideology behind it? The aim of the global electronic hub? First of all, if I give you a little bit of background on me, how it's sort of come about, that will probably help understand the whole ideology of it. I've spent most of my career sort of 30 plus years in the electronics industry in electronic components, distribution, manufacturing and product manufacturing. I've worked pretty much all over the world. There is one common facet that I've seen with electronics. One of the most striking things is that electronics itself is, by its very nature, it's kind of like a giant Lego set in one respect. Its basic building block components that are then arranged in hundreds of different formats to create different kinds of products.
So, yes, there is specialisation in some areas obviously. There’s power specialists, there’s digital specialists, there's particular industry specialists. But effectively, if you take a single electronic board out of anything and have a look at it, electronics companies and people who know electronics will recognise the part, and they probably use them in their own products, even if it's a completely different product. 


RANJANA: Sounds good, coming back to also background of Honeycomb Global, we've been formed as a collaboration ourselves, right? 


RON: That’s right, yeah.


RANJANA: I have an education in Electronics Engineering as well and a Masters in Nanotechnology. And then all of the partners have some sort of electronics in their background, and you know, Dishant and Dirk also doing their PhDs from Cambridge in Physics and Chemistry, but also with an underlying electronics element. I understand that collaborations are the way forward, even in terms of building a business scope. But not just the core electronics, but even the auxiliary industries around electronics.
 

RON: Absolutely. All the supporting industries and what have you as well. And even when you look at the way that Honeycomb Global, which started, now kind of back in about 2011 - 2012, there was Dishant Mahendru and Dirk Mersch at the time, Suneel Kunamaneni, and I as well, who were working on a project for electronics development in India. And I became involved from a commercial angle to help on the commercial side. At the time we were all separate companies, and we all work together really well. Coming out of that project, we said, hey, why don't we form a company and go and do this properly, go and do this as its own entity? And that's how Honeycomb Global started originally in the UK. But then, over time, we developed into India more, which obviously Ranjana where you joined us as well. So again, the business in India is a joint venture partnership with yourself, Ranjana and with UK Honeycomb Global, as the two main partners in the business. So even the whole way the business has come about is through collaboration.
 

RANJANA:  Yes, that's what I wanted to emphasise on at this point. And I think it's great to understand the fabric of how a collaborative business works before the entire network builds on that. So it's a great starting point, and I'm really excited for the journey ahead.
Now the next thing I want to speak to you about is what do we believe will change the world of electronics? So, you know, maybe you say in the next few years, or even just the industry as it is, what do you think will ease things for everybody in the industry? And how do you see us adding value? What is the value component that we would provide? 


RON: Great questions. A couple of things: one is certainly the collaboration element for electronics company. It's a tough market out there, and all electronics manufacturers and companies that I've come across have a lot of great ideas but have not always got the full picture of how to bring those ideas to the market, or how to make them actually work. Or they might not have the scope: they might have the equipment for manufacturing certain things; they might not have the contacts in a particular area to go into a new industry or a new market.
And that collaboration element I see as being a really big game changer, which really is. I'll be quite honest in some respects we’re copying from the pharmaceutical industry. When you look at what happened in pharmaceuticals over the last sort of 20-30 years, at one time, each pharma company would operate on its own, develop its own products, bringing them to market, and manufacture them. Over a period of time because of different legislation in different countries, because of the cost of developing products and the speed of development, it became more and more difficult for standalone companies to do that. At the same time, there were lots and lots of small companies growing up who were coming up with fantastic ideas in pharmaceuticals and new products and medical devices and all kinds of things.
And it was only once the pharmaceutical industry started this journey of collaboration where they now have shared resources into development labs, they also, a lot of the big pharmas now don't develop actually their own products, they are actually developed by third parties who are collaborating as well. That's where some of the real big breakthroughs have come. If you just look at what happened during COVID in getting the vaccines out. If it hadn't been for that ideal of a lot of collaboration and trust throughout the whole industry, we would not have got the vaccines anything like as quickly as we did, which is quite, you know, phenomenal the speed with which those vaccines came around.
So, from the electronics business point of view, we're now on the cusp of this amazing age of the Internet of Things, and automated driving in cars, and, you know, electronics, as always, is on the verge of yet another boom. And I see so many companies all scrambling around with, quite often lots of the same ideas, not achieving the kind of economies of scale and scope to be able to bring them to the market properly. And if the electronics industry takes from the pharmaceutical industry in the way that it's operating, and starts to gain more trust and more collaboration, lots of companies can gain a great deal more, both economically, and in terms of ideas, and bringing new products to the market, and really driving this electronics business forward.
So, I see that where our value add is, there are a couple of things where we add value here: One is to help encourage this kind of collaboration. I think the second big part that we play is overcome the trust issue. Now, One thing with the way that the Honeycomb Global Electronics Hub is operating is, we call it a managed peer-to-peer network. And what we mean by that is the idea is that eventually the companies will all start talking together, and you can start talking together at a very early stage. So it's a peer-to-peer network.
The managed part comes in, what we're doing is we are going to bridge that gap between companies from the trust element. So, for example, if a company has got a great idea, and they're looking for a collaborator to help manufacture or to help finish the idea off, there's a lacking, you know, maybe one piece of the picture. Instead of having to go out to other electronics companies and say to them, “this is our idea, this is who we are; can you help us?” Which leads into an issue of that company is just going to take that idea and run with it and ignore the original company that came along.
Where we stand in this is tell us and say “this is what we're looking at; this is the kind of company we're looking for”. We will then go out and find in our database or, if it's not in our database, will go out and find the companies who can work with you, who can give you the skills, the reach, whether its market reach, whether it's technical capability, we will help find the companies that will make that happen. But the key thing is, in the initial stages we’ll keep everything confidential. So we will simply be talking to another company and saying, “we've got Company A who've got an idea based on, say, a medical device” that's got roughly it gives you this kind of capability, and we'll give a rough outline of what exists, but not enough so another company can actually take the idea and run away with it. What we’ll  then do is start the conversations to find the companies who are genuinely interested in collaboration. And then we'll come back to Company A and say “we've got a couple of companies here who look like a good fit”. We’ll give a general profile of those companies, again, probably without mentioning names at this point, or giving too much information away to protect the rights of Company B.
If both companies then agree that these companies sound good and we should be able to collaborate together, then at that point, we say, OK, here are the contact details, we will facilitate the first calls if you want or just go and talk to them directly ourselves. So what we're doing, we're standing in the way to try and offer a bit of confidence that the IP isn't going to get ripped off at the start, isn't going to get  stolen from the start, to start to build a bit of trust before the two companies start to come and talk together and open the gate in that way. 
The other thing I would like to add to that as well is what we're not going to do is go out and find, you know, 25 different companies who can all offer the same thing to you and start of some kind of reverse Dutch auction or whatever you want to call it. We'll vet the companies, we’ll find the ones that the most likely fit, we’ll only come through with a couple of the time. And it's for Company A to then decide whether they look good for them or if they want us to go out and find, do some more work and find some more companies.
I'm very conscious of not creating some kind of auction market place for companies to work together. It shouldn't be like that because that is a bad start to collaboration anyway. It should be companies who want to come together, and it should be companies who fit well and avoid all the kind of, you know, sort of “auction kind” of mentality. So that's one of the ways I can see we can add real value.
A second way is the network that we're building, I've been looking at networks. When we came up with this idea for the network, we were looking and I'm sure you remember Ranjana and you know, we were looking at all the other networks that we come across and we came across, you know, Chambers of Commerce within particular countries, within regions of countries, we come across industry associations. It seems that they all have some kind of ulterior motives.
So, for example, if you want to go into China, for example, and you're from the UK, you might go to the UK-China Chamber of Commerce or Business Council or something like that. That Business Council will only be interested in linking up UK and Chinese companies effectively. That's all they’re interested in. If you go to an industry body, so say the automotive; all they're going to be interested in is automotive manufacturing. There doesn't seem to be one overall electronics industry body that is purely focused on bringing companies, world electronics manufacturing companies, and design companies and supporting industries, worldwide, bringing them together. They all have an ulterior motives that if I'm looking for a company in India, I'll go through UK-IBC. If I'm looking for a company in Malaysia, I'll go through the Malaysia Chamber of, British Malaysia Chamber of Commerce. I might not quite know where I'm going to find my best collaborators anyway.
So the way that we're building this electronics hub is, it is just that, it is the electronics hub, the Global Electronics Hub. It's to encourage collaboration, and it's to help companies find new markets and go into new markets to find the technologies they need to find the inspiration they need or to find the manufacturers they need to build their inspiration. 
We're also standing in the middle of this in terms of running the hub itself. There's going to be a small amount of management cost for us. Obviously, we want to recover that cost. So we have a basic membership, which is, I'll put it in pounds sterling. But you can convert it to dollars or whatever, it starts at £99 a year. And that £99 a year, as you can imagine, doesn't buy a great deal. What it does do, though, is it gives us the ability to run the hub, so that's kind of like the management cost of running the hub. And then there's other memberships you can add on where you can get bespoke services and what have you. But the basics are there.
Let me take it a step further; the basic membership that gets you things like access to our discussion forums. And, you know, the usual kind of newsletter type things that come in from around the global electronics industry; what's going around global electronics at the moment, both technically and commercially. And it includes you in what we call a passive collaboration search so effectively into our database will take a few details of what your company is about, what kind of things you're looking for.  And then we’ll do a search for companies looking for what you've got to offer, or who have got to offer what you're looking for, we'll find you in that way, with the passive search. You can then add on with other memberships, where we do a lot more hands on bespoke research for you, which you know, obviously, it starts to take a lot more of our resources and time and money and what have you, so that starts to cost a little bit more. But again, I think you'll find all the costs are incredibly reasonable, especially when you compare them with a lot of the other industry associations out there.
And then, of course, we can do bespoke consultancy work as a separate thing as well, which is probably kind of where we came from. 

 

RANJANA: I mean, all of the details are there on the website and there is a chat help line on the website for anybody who's looking for more information, which is great. Just to sum up, it's truly global and truly decentralised hub.
 

RON: Yeah, it is. We are not working on behalf of anyone else. This is a totally independent organisation. There is no manufacturer involved with us. There's there is nobody who is pulling our strings. We are totally independent people who love the electronics industry, to be honest. 
 

RANJANA: Ron, I'd like to add a point to everything you said with our value addition. One other important element with, given everybody's background, is the technology scoping, the technology intelligence, of also knowing, for example, if there's quantum computing that's coming up, or the Factory 4.0, also in understanding what a potential member or a client would require, and steering them in the right direction. I see that to be also very, very strong value addition in terms of what we do and well, Dishant and Dirk are highly technical and from the UK being at the forefront of so many technology innovations.


RON: Yeah, sure, you know, it's not just the UK and either. I mean, between all the directors of the company, we are actually four different nationalities German, Danish, Indian, British. We also have associates in China and the US and obviously in India as well. So we've got a wide scope. Everybody has got a good understanding of electronics and the electronics industry, both technically and commercially. From the technical point of view, we can go so much deeper than a lot of normal technical companies because we have a very strong network of experts that we can call on effectively.
So, if a company came towards electronics company came and said “okay, we want to get into IoT sensors and it needs to be something for sensing air quality”, then we can go away, we've got the technical capability ourselves in pretty much anything you can think of. We've got the technical capability to understand fairly quickly what it is you're looking for, to be able to look at where the industry is going in the future, where those technologies are going in the future, and to help find the companies who are in the right position to understand those technologies and be able to support you or, alternatively, understand your technology and find the companies who have got the equipment and the capability to actually manufacture what you're looking for.
So we come at this as being, not me personally, I'm very technically minded, I've been in electronic industry for a very long time, more commercially, but certainly some of the other guys in the organisation, very, very, very strong, technically, as strong as you can get, technically. Really know their stuff. So we come at this from this angle of being able to mix the technical capability with the commercial capability. We understand the market. We understand how electronics manufacturers work. We understand the price points. We understand the global market from consumer and business-to-business and industrial electronics, automotive electronics, aerospace, you name it. But we also absolutely understand all the technologies that go into it. So we're rarely stumped on a question; given a few hours to check a few things out, we're very rarely stumped on any technology question.
So bringing those things together as well, I think really adds another dimension. Again, a lot of the industry organisations I see are either very good technically or very good commercially, and don't mix the two very well. So there we are. We're independent. We've got a love for electronics and the electronics industry. We've got huge commercial experience. We've got huge technical capability and we're on a mission to bring electronics companies together to make this industry collaborate more to help this industry collaborate more.

 

RANJANA: And when we say, managed to peer-to-per network, all of this is what any of the members will have access to. So I wanted to throw light on that. And of course, anybody listening to this can go over to our website to find the detailed information about that. 
I think we've covered most of the points, but I have one important question left. A discussion point, more than a question. I'd want us to throw light on who would really benefit from this hub and this network and who do you think should join? 

 

RON: In terms of companies, any company that is involved in the electronics industry in one way or another. It could be, if not pure electronics companies, it can be supporting industries, you know. Companies who are making plastic injection moulding specifically aimed at the electronics industry. That's fine, even if you’ve never touched an electronic component, that makes perfect sense. You know, metal work, companies who make metal work and chassis particularly aimed at the electronics industry, absolutely perfect for us. Software companies as well, who are writing software for industrial controls, for automotive, for consumer electronics applications. You know, if it's software that's going to go into chips and what have you again, absolutely great. Supporting software for, you know, most electronics now are in some way connected through the Internet. If they're supporting software for that, you know, apps kind of thing aimed at specific kinds of electronic devices. That's fine as well.
We are going to try and limit it to avoid it, just becoming a “free for all” with any kind of company joining. There has to be a striking element of being involved in the electronics industry that goes through it. Whatever it is you're doing, there has to be some deep involvement with the electronics industry in one way or another. That's on a company level. From anywhere in the world, you know, we're not forcing anywhere in the world; I see electronics companies in the most remote regions popping up with some great ideas. So from anywhere in the world, feel free to come and talk to us.
Now, within a company, the level of people who would be interested, the kind of people would be interested. The real collaborations usually has to be executive level, but certainly for starting the conversations. I see people involved in procurement, operations managers, quality managers, R&D managers as well as the executive level above. So any of those people will find this this network very useful.


RANJANA: Great.
 

RON: There is something that I think needs covering and it needs adding. One of the key things with the organisation as well is, in our roots, by some kind of serendipitous means that we're not quite sure how it happened. But we started off working with companies in India was our starting point, in terms of Honeycomb Global and how Honeycomb Global was formed. It just so happened our first contract was in India. We developed a bit of a love for India. You know, one of the original Directors is actually Danish, but of Indian descent and, you know, a dual passport holder.
And because of our work in India, we then partnered with you Ranjana as well, and you're based in Bangalore. So, one of the things that you'll see in our website as well is there is quite a lot of talk of India, which is deliberate. It's also because that's where our roots came from. We do have particular relationships with some of the Indian electronics clusters. And in India, there is a huge amount of finance going in from central government, and local government, and regional government, in building state-of-the-art electronics technology parks. And there's lots and lots of them, and the trick is finding the good ones.
We've got quite an expertise with working with technology parks generally, and we have good relationships with a few of the Indian ones, some of the best Indian ones. We also see that the Indian electronic market has been on the verge of exploding for a good number of years now, but it is creeping closer and closer all the time is already exploding to some extent. There’s particular Indian policies that mean, if you want to get into the electronics market in India, you need to be manufacturing in India. Or at least be partnering with the manufacturer in India because of the way some of the tax regimes have been set up by the government, et cetera.
Also, you've got a population of 1.3 billion, which is, you know, similar to the size of China. It's a population that is getting, the middle classes are rising in terms of, you know, the middle-income classification is growing all the time. There is 100 million - 150 million plus, that are classed as middle income now, and that's growing hugely, continually. The overall wealth of the country is coming up quite well.
And it is a country that has some surprising attributes to it, from, you know, electronics point of view. One is the cheapest mobile phone connection in the world. It's got excellent mobile phone and Internet coverage, fantastic electronic design and software design. Electronic hardware manufacturing, electronic hardware manufacturing not too good at the moment. And it is an excellent opportunity for other companies from, the electronic companies from around the world to come into the Indian market and start to learn it, and start to develop what is going to be a huge market in the not-too-distant future.
So you will see this quite an “India focus” there. And I would say in terms of our work, we’re probably you know, 30-40% India and then the other 60% is the rest of the world. So it is a big focus. It's not the dominating focus. Overall, no country so dominates what we do. But if you are interested in India, we have a specific version of the electronics hub. So if you join up to the specific version, the India version, you get everything that you get from the rest of electronics hub, plus we add on some more India content as well.

 

RANJANA: Yes, and from the India point of view, the electronics hardware manufacturing and the assembly, many of the state governments are really pushing to increase and to incentivise hardware production. That’s definitely a growing field and an  opportunity, and India is looking towards the world to come in and to invest and to collaborate, to take the technology skill set further both for the local talent pool, as well as the export market as well. So India is very flexible in that regard, and diversity of opportunities is vast.
With collaborations, not completely restricting it to India, but I'm saying from inside of India, we’re very, very open and very, very, you know, excited about collaborating with the rest of the world.

 

RON: And when you look at some of the history of of why India does not have its own very strong electronics hardware manufacturing industry already, but it is world renowned for electronic software, even electronic design. So how has that happened? How is it that hardware hasn't taken off? And the answer to that lies in some of the past government policies, which really is, when you look at India, it  joined the World Trade Organisation not that long ago, relatively speaking, which means that for quite a long time India was really quite protectionist and had a lot of policies in place that stopped the importation of electronic components. 
Some kind of, I'm going to choose my words carefully here, good intentioned but perhaps a bit misguided, and probably a lack of understanding the electronics industry for hardware at the time. So what it did was, it stifled the ability of Indian entrepreneurs to develop electronics manufacturing at the time. Because, as we all know, most electronics manufacturing companies buy end components and build assemblies. That's what most electronics manufacturing is, apart from the actual component manufacturers, which is dominated by the Americans, the Chinese and Japanese, German, et cetera.
So without that importation, that ability to import electronic components, no surprise that the hardware industry never developed. Focused a lot on software, but it couldn't make products at a reasonable price because the cost, of the amount of tax that  was levied upon to electronic component importation going back a while was so high there was no point trying to make your own electronic products in India at that time. It was far cheaper to import completed products. 
That's completely reversed now. Over the last few years, it's reversed the point where most electronic component imports are virtually zero duty. They were actually zero duty at one point. I think because of the pandemic, like most countries, they've tweaked it a little bit, so there's a small duty maybe I think, 5% off memory. But the other thing that they have done as well is they've also put much bigger duties on finished assemblies and on finished products, so it is now becoming a lot more economical to produce products in India.
The problem is that the Indian hardware manufacturing capability hasn't developed; not at the same speed as the software and the electronic design has developed. So India now not only welcomes electronics manufacturing capability from other parts of the world, it desires them, it needs them. It wants them to be able to help build the industry, to help build the electronics industry in India. So that's really a key point that why India is now on the verge of exploding.
The other big point as to why the Indian government are putting so much resource behind building its own electronics industry: if you look at the balance of payments on electronics, it is incredibly negative, you know. Looking hundreds of billions of dollars a year of electronics imports. And India, to maintain its own growth, and its own welfare has got to switch that; has got to, at least in the initial stages, reduce the reliance on imports, and the only way to do that is encourage foreign companies to come and manufacture in India, and then eventually to start building industry that's strong enough to start exporting as well.
So they're doing both simultaneously incentivising companies to come and manufacture for sale in India, but also for re-export. And when you look at that, compare with the Chinese model, a lot of people try and draw comparisons between India and China. You can't really, because in China, the everything in terms of building their industries, was around export. In fact, for a long time it was very difficult to even sell products, even if you manufactured in China, it's very difficult to sell into the Chinese market. India is exactly the reverse of that. Getting to India, make the products in India, sell the products in India and export. So it's kind of, the emphasis is the other way around. It’s switched around the other way, which makes it quite an interesting place to be operating at the moment.

 

RANJANA: Yes, all of what you said is true. So I think we'll have another podcast to delve into different geographies. So I would like to bring this to a close with this one sentence I'd like to add. “In an era of artificial intelligence, I'd say we'd like to use real human intelligence to ease your expansion needs.”
 

RON: Very good. I like it.
 

RANJANA: That's what I'd like to say to anybody who is looking to collaborate and expand and grow their business further in any part of the world with anybody else in any other part of the world.
 

RON: Yeah, absolutely.
 

RANJANA: I'd like to thank you for your time for this discussion and looking forward to the next one.
 

RON: Excellent. Me too. Thank you.

Key Takeaway Points​

  • Electronics is a like a giant Lego set in one respect, basic building block components that are then arranged in hundreds of different formats to create different kinds of products.

  • Collaborations could really drive innovation in the industry. We learn this from the Pharma industry over the last 20-30 years.

  • The Honeycomb Global Electronics Hub is a managed peer-to-peer network, which is truly global and decentralised, and facilitates finding partners for collaborations in a trusted and expert guided environment.  

  • There is no scope for an auction marketplace. Highly qualified HCG team does the due diligence before connecting companies.

  • HCG team is both highly technical and highly commercial.

  • The network is open for all electronics companies, be it manufacturing, design, or auxiliary industries such as software, catered to the electronics industry. It is for any company with a strong focus on electronics. 

  • India specific membership packages available as well