netLabs! Uganda (netLabs!UG) is a research Centre of Excellence (CoE) in telecommunications and networking technologies who had its origins in the Community Wireless Resource Centre (CWRC), Department of Electrical and Computer Engineering, College of Engineering, Design, Art and Technology (CEDAT) at Makerere University. netLabs!UG is an alternative Research and Development (R&D) model which will strive to achieve a balanced critical mass of basic research, applied research and commercialisation. Innovation is core to the research activities of netLabs!UG and as the CoE develops it will be designed into the research process. Research funding programmes should emphasise innovation as well as research and as such netLabs!UG is happy to support this two strand approach to put Uganda and East Africa at the centre of development and innovation in this very important sector. Commercialisation of these innovations as well as commercial research support of local telecommunications and networking business, thereby enhance their solutions, driving efficiencies and ultimately benefiting the local economy is an essential output of netLabs!UG. Ideas for innovation can originate anywhere. It is not necessary that all ideas are created originally within Uganda. netLabs!UG will leverage knowledge that is already in the public domain, such as Open Source. Thus for a developing country like Uganda a strategy to promote research with a bias towards an applied research centred policy rather than very basic research makes sense. However this being said, such promotion cannot be at the total expense of basic research, a proper balance is necessary for a healthy system of innovation. The innovation and research will also serve the demands of the local market in East Africa. This approach can be a significant cost saver for multinationals wishing to locate facilities in the region.