I recently had the opportunity to attend the annual R&D Management conference at the University of Cambridge. Whilst the conference provided diverse views on innovation from around the world a couple of key points stood out for me:
Firstly, the “velocity” associated with innovation activities. In our somewhat isolated economy, we do not realise the extent to which rapid and continuous innovation is a prerequisite for competing in more developed and open markets. South African companies, especially in more established industries, need to explore how they can improve their ability to innovation on a continual and sustained basis.
Secondly, collaboration and complementaries, may an increasingly important role in developing a strong competitive position and maintaining it into the future. Increasingly, products and services rarely “standalone”; whilst this is more obvious for products such as smartphones and apps, this principle is valid across most economic activity. A highly effective innovator then develops insights into the relationship of its products and services to those around it and subsequently seeks opportunities to exploit and strengthen these relationships. It is probably less likely that a “value network” of complementaries will be dislodged by disruptors – although this possibility should never be discounted.
Lastly, innovation ecosystems, play an important role in developing highly innovative economies. Virtuous circles are created in which continuous learning in the economy forms a rich source of new innovation opportunities. Risk sharing occurs, this mitigates the impact of failure which is more likely to occur than not. A more “robust” economy is therefore created. Learning and risk sharing to some extent provide “buffers” that allow freer capital allocation – put differently, highly innovative economies that have a track record of success are more likely to attract capital seeking good returns.
The obvious question is : “How closely does South Africa as a country align to these principles?” I would argue that we have more to do on all three point. Companies that operate in our geographically distant and highly regulated economy do not face the same competitive pressures as firms competing in more integrated economies. Firms need to be more aware of the value and importance of collaboration and complementaries – more so in traditional “bricks-and-mortar” industries. Except for pockets of excellence, innovation ecosystems remain underdeveloped in South Africa.