Tech innovation company Strategic Elements (ASX:SOR) has caught the market’s attention in the second half of this year with a run of positive news flow.

However, it’s far from an overnight success story, with a suite of advanced technology products that are the product of a multi-year development process.

Stockhead recently caught up with CEO Charles Murphy to discuss the 2021 outlook, as momentum continues to build across each of the company’s product channels.

Unsurprisingly, Murphy said Q1 is shaping up as a “very busy quarter” as the company moves towards commercialisation on key projects.

ASV – a global market

Among SOR’s innovation success stories is the Autonomous Security Vehicle (ASV), which leverages robotics and AI to provide a cutting-edge solution for unmanned perimeter security.

SOR subsidiary Stealth is now in final testing with the WA Department of Justice as it moves towards commercial deployment of the ASV in correctional systems.

But it’s Stealth’s collaboration with NYSE-listed engineering giant Honeywell that potentially gives it a key commercialisation advantage, Murphy says.

“If you look at Honeywell as a whole, its Building Technologies unit is a significant part of their company and their products, software and technologies are in more than 10,000,000 buildings worldwide,” he said.

“Their EBI (Enterprise Buildings Integrator) system is a leading global solution involved in building management and security.

“We have worked with Honeywell’s Asia-Pacific software team to connect the Stealth operating system with the Honeywell Security Management System.

“That’s an important step because this integration means that alerts, messaging and other data from the Autonomous Vehicle can interact with the overall building management system. To have our technology already integrated into one of the leading building management systems used globally is a huge advantage.”

He added that if a commercial partnerships develops, Honeywell could potentially play a key role in wider commercialisation of the ASV, given that it’s one of the biggest players globally in the correctional justice sector.

Multi-channel opportunity

Just as importantly, Stealth is leveraging the IP generated in development of the ASV to make inroads into other addressable markets including the global agriculture sector – a $34.5 billion sector in the US alone.

Murphy also cited recent plans introduced by the federal government to enforce stricter standards around physical (perimeter) security and cybersecurity.

The measures will be applicable for all critical infrastructure sectors, such as water, power, shipping ports and transport (road, rail and air).

“They also expanded the terms they use to classify critical infrastructure. And if you’ve been classified as such then you have to report back to the government to confirm that your organisation meets certain levels of security,” Murphy explained.

“So we think that legislative change will drive the market. And legislative change is a great thing to be selling into, because if the government mandates it, it’s something companies have to do.

“It’s not just a cost-benefit solution and the net effect is demand becomes stickier.”

Electronic Ink’s IP advantage

Along with the market opportunity for the ASV, SOR has also highlighted strong technical advances for its self-charging battery ink technology – itself a by-product of the company’s research on the Nanocube Memory Ink data storage technology.

On that front, Murphy explained how SOR’s status as a specialist innovation company helps to unlock new technologies.

Working with UNSW, VTT in Finland  and the CSIRO, “the scale up for the Memory Ink took nearly two years”, Murphy said.

“And that’s because functional electronic ink is very advanced material. It contains nanoparticles, and when you take it from a 200ml measurement to one litre, you’re actually scaling up billions of particles that have to work the same way they did on a smaller scale.”

“So we have really pioneered some of the work we’ve done in that field on a global level. And a lot of the IP on the memory ink is really helping us out with the development of the battery ink. There is just so much upside to the battery ink technology and it has injected the whole company with a real sense of excitement to be working on it”.

“Our ultimate aim for the first half of 2021 in the Nanocube Memory technology is to develop a world first 1Megabit printed memory prototype with the ultra-low power, transparent memory ink.

“The success the company is experiencing at the moment is the product of many years of sustained effort. I feel very pleased that our long standing shareholders were able to participate in a capital raising that has significantly rewarded them. I am also pleased that they and our management team have also been able to be rewarded for the many many years of hard work in a very high risk environment.

“Directors and associates that founded the company still have the most at stake today and are extremely determined to drive the company further from here.”

Looking ahead, Murphy said the SOR management team is on the lookout for new innovation opportunities, with a particular focus on the fast growing data sector.

Murphy said the focus on data stems from SOR’s strategy to use the in-house skills of its management team – in this case, director Matthew Howard who worked for 10 years at global data software giant Oracle.

“That’s what we’re supposed to do as a Pooled Development Fund (PDF) – keep backing high-risk, high-reward ventures, and we’re looking for the next one at the moment,” he said.

This article was developed in collaboration with Strategic Elements, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.