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SA Companies Are Slow To Innovate – Shows Accenture Innovation Index

The index shows that only eight percent of companies are successfully managing to convert innovation into substantial bottom line growth.

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The pace at which South Africa is innovating needs to accelerate if the country hopes to continue to compete in the 21st century. This is according to the Accenture Innovation Index released at the Innovation Conference held yesterday in Johannesburg. The index shows that innovation has increased by four points in 2016, a pace not required to for a stable economic growth.

Analysis of the results puts the majority – 57 percent of companies surveyed that scored less than 52 points out of a possible 100 – into the innovation laggard category. Only 29 percent can be categorised as innovation leaders. However, there is one further category that is truly setting the pace – innovation value champions.

“Digging deeper into the research we found that eight percent of companies are successfully managing to convert innovation into substantial bottom line growth,” said William Mzimba Chief Executive of Accenture South Africa and Chairman of Accenture Sub-Saharan Africa.

“These innovation value champions are seeing returns on their innovations in excess of 40 percent and generate three times more value on their innovation investments than market average.”

“The innovation excellence of innovation leaders and value champions sets a benchmark for corporate South Africa. So, how can laggards close the gap to become leaders? And what is it that innovation champions are doing differently to achieve such impressive returns on their innovations? The first, most significant finding is that innovation value champions invest more in innovation,” said Mzimba.

“On average, South African companies invest 13.7 percent of their annual revenues in innovation and realising a 14.5 percent return. Innovation value champions invest 17.8 percent of revenues and their average return is 42.6 percent – almost three times higher than the market average.”

Mzimba further emphasised that investment is not the only factor that underpins their success. “A strong innovation culture is central to their innovation strategy, they use digital as a business enabler and as a revenue generator, and they leverage the power of ecosystems to gather intelligence and insights that help them differentiate their offerings in the market.”

In this year’s Accenture Innovation Index results, there are three stand-out dimensions of innovation maturity in which innovation leaders are gaining momentum: Engagement, Resources and Digital.

Engagement: Innovation embedded

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To achieve a truly sustainable innovation ecosystem, engagement needs to be encouraged and facilitated on all business and employee levels. Among South African companies surveyed, levels of engagement have increased by seven percent to 50 percent in 2016. This is driven primarily by innovation leaders who are acutely aware that for innovation to be embedded within their organisation it needs to be a persistent mindset among all employees.

Engagement is an important recurring theme in the 2016 Innovation Index with companies continuing to drive innovation from within their organisations. Notably, almost 70 percent of companies reported that their employees see innovation as an important part of their day jobs and believe it has the ability to enhance the life span of a company, its products and services.

innovation value champions see embedding innovation in their organisations as a cornerstone to their innovation strategy. Their talent development is directed at acquiring new skills to support innovation and they have a high success rate in terms of retaining top talent to support innovation, and attracting and acquiring new talent to drive innovation.

The Accenture Innovation Index results show that innovative businesses encourage their employees to be innovative and openly promote the use of interactive tools and digital platforms for employees to pursue innovation.

This is in line with Accenture’s 2016 Tech Vision report, an annual report that identifies technology trends essential to business success in the digital economy, which shows that 76 percent of South African businesses believe a more fluid workforce will improve innovation.

The index indicates that 95 percent of innovation leaders are giving more control to their employees to ideate and innovate, and are offering strong incentives and opportunities to encourage and cultivate innovation.

Incentives include professional development, varied work assignment opportunities, financial rewards and annual rewards programmes recognising innovation. 

The value of internal collaboration is also receiving strong attention – 85 percent of Innovation Leaders are making use of dedicated multi-functional innovation teams to generate new ideas, and have dedicated innovation teams set up to manage innovation. 

Resources: The power of the ecosystem

Along the innovation value chain, resources in the form of financial capital, human capital and partner relationships are needed to generate ideas, facilitate innovation and bring it to fruition.

In 2016, the Resources dimension of innovation maturity measured by the Innovation Index witnessed an impressive general increase of 20 basis points from 2014 to reach 55 points. This score was primarily driven by innovation leaders who increased their score in the Resources dimension by 32 percent to reach 77 points. 

In an increasingly competitive world, companies need to take advantage of a wide range of resources to innovate; they cannot rely on ideas to come only from within their organisation. Encouragingly, the use of Open Innovation, which is characterised by partnerships among a range of players in a global ecosystem, is a strong theme emerging under the Resources dimension in this year’s Innovation Index as a means to drive innovation agendas.

“Our results show that 66 percent of innovation leaders are proactively embracing innovative ideas that come from sources inside the organisation as well as platforms and channels located externally. Innovation value champions clearly see opportunities in leveraging a broader ecosystem: 71 percent look to academia, clients, customers and suppliers to crowdsource information to innovate rather than relying on traditional sources,” said Mzimba.

Digital: leading in the new

Innovation Leaders are using analytics to drive innovation – a successful strategy that laggards are not taking full advantage of. Big Data analytics enables companies to harness data and use it to identify new opportunities and more efficient ways of doing business, as well as speed up decision-making and attend to customer needs with precision.

Digital technologies are also being adopted by innovation leaders internally to support business process innovation and streamline operations. This translates into significant cost efficiencies within the business.

Digital technologies are also being used for process automation, with over half of South African organisations currently automating their core business processes, and eight in 10 innovation leaders moving to automate core business processes as part of their digital progress.

The digital environment makes a strong customer focus a competitive advantage. By leveraging digital, South African organisations can improve their cost-to-serve throughout each layer of the value chain.

Innovation Leaders are also strongly invested in reducing the time to respond to customer needs.

They are using digital technologies to improve their service delivery and, ultimately, customer satisfaction; social media for product and service promotion; and technology apps to improve route-to-market processes, ensuring market strategies are optimised for their business.

The journey from laggard to leader

Overall, South African companies understand the importance of open, collaborative innovation and the positive impact it can have on employee engagement and company performance. Accenture believes that South Africa needs to catalyse change to drive next steps.

The Innovation Index provides some insight into how the country’s innovation value champions and leaders are building successful systems of innovation. If South African companies can better mobilise their resources, engage their talent and leverage digital technologies, they can increase their innovation success.

However, the journey from innovation laggard to leader requires a new mindset and adequate investment in innovation and development. To become an innovation value champion, companies must take the next step, creating an innovation ecosystem designed to capture value and promote and reward risk-taking and performance.

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Africa’s Top 10 Tech Start-Ups Selected For #Africa4Future Accelerator Programme

Airbus and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) have announced the top 10 African tech start-ups that will take part in the latest Airbus Bizlab #Africa4Future accelerator programme. They were selected after an open public pitch event in front of experts, potential investors, the media and other stakeholders in Kenya’s capital city.

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#Africa4Future is a joint business accelerator initiative of Airbus and GIZ’s Make-IT in Africa initiative together with the Meltwater Entrepreneurial School of Technology (MEST), a non-profit seed fund and pan-African organisation that brings together startups, entrepreneurs and the tech community, and Innocircle, the South African-based innovation consultancy.

The top 10 start-ups were selected from 314 entries representing 19 African countries that were received when the challenge was opened last October. These were assessed by a panel of Airbus and other independent experts.

The programme aims to encourage and support entrepreneurship in Africa. The continent’s young and increasingly techno-savvy population is likely to be the driving force behind Africa’s socio-economic development. The competition identifies Africa’s own pool of talented entrepreneurs using innovative aerospace based solutions to tackle the continent’s most pressing challenges such as transportation, agriculture and healthcare.

As a global aerospace accelerator, Airbus BizLab is ideally suited to help African startups transform innovative ideas into viable and valuable businesses. In doing so, it increases the aerospace industry’s engagement with hardware and software innovators and entrepreneurs in Africa while helping to nurture the establishment of competitive entrepreneurial ecosystems on the continent.

The Nairobi event kicks off an intensive 6-month business incubation and accelerator programme involving technical, commercial and mentorship activities in France, Germany and South Africa. This includes workshops and coaching sessions with Airbus experts, GIZ’s Make-IT in Africa, MEST and Innocircle coaches.

The programme will culminate with Demo Day events at the biennial Paris International Airshow and a special event in Germany from 19-26 June, when finalists will launch their products, define their collaboration with Airbus and announce their investment commitments in front of representatives from across the aerospace industry.

Related: How To Start A Business With No Money

Finalists:

1. Astral Aerial (Kenya) – using drones for humanitarian cargo transport, surveillance and emergency response.

2. Cote d’Ivoire drone (Ivory Coast) – locally-manufactured drones for various applications.

3. Elemental Numerics (South Africa) – applies computational fluid dynamics techniques to the design of machines and components, ranging from aircraft to heart valves.

4. Lentera Limited (Kenya) – applying remote sensors to monitor and transmit environmental data to enable more efficient and smarter farming.

5. Maisha ICT Tech PLC (Ethiopia) – deploying locally built drones for delivering medicines, blood and healthcare items to remote and rural areas.

6. MamaBird (Malawi) – provides a platform to help Governments, NGOs and other organisations deliver vital life-saving supplies to remote communities.

7. Map Action (Mali) – a solution offering real-time online urban mapping to identify problems affecting water supplies, hygiene and sanitation.

8. MobiTech Water Solutions (Kenya) – an online real-time water monitoring solution that allows businesses, homes and water-service providers to manage their available water using an app-based dashboard and instant messaging.

9. Track Your Build (Nigeria) – a novel infrastructure management tool for construction and operations.

10.WiPo Wireless Power (South Africa) – offers reliable and convenient wireless power chargers for businesses, conference centres, airports, restaurants and other venues for the charging of mobile devices, laptops and drones.

Related: 21 Steps To Start-Up Success

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Top Sectors For SMEs In 2019

“As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and sub-contracting agreements over the coming years.”

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While the South African economy has been underperforming for a number of years, the first positive signs of turnaround started to become visible by the second quarter of 2018, and by the end of the third quarter, data supplied by Statistics South Africa showed that the economy had indeed grown by 2.2 percent, compared to the previous quarter. This uptick is expected to have a positive effect on business confidence in 2019.

This is according to Jeremy Lang, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), who says that certain business sectors have already seen an increase in opportunities for small businesses and start-ups.

“While these sectors will not be without challenges, the following four industries are likely to offer the best opportunities for small and medium enterprise (SME) owners to grow their enterprises in the coming year.”

Tourism

The World Travel and Tourism report 2018, revealed that the direct contribution of the travel and tourism sector to South Africa’s GDP has been projected to rise from R136bn in 2016 to R197.9bn by 2028 – set to make up a total of 3.3 percent of the country’s total GDP, says Lang.

“Although this sector experienced some setbacks in 2018, such as the drought in the Western Cape and stricter visa regulations for children entering the country, both the water restrictions and visa regulations  have been relaxed and the sector is once again poised for growth,” he says.

Related: Government Funding And Grants For Small Businesses

Manufacturing

Statistics South Africa has credited this industry with being the biggest driver of growth in the country’s GDP, having expanded by 7.5 percent in September 2018, says Lang. “To bolster this, Government has made a concerted effort to stimulate small business growth in this area with initiatives such as the Black Industrialist Programme and the SA Automotive Masterplan.”

He adds that businesses in the manufacturing sphere could therefore likely see significant opportunities in the form of outsourcing contracts and new partnerships with large corporates.

Agriculture

“The debate around land expropriation has occupied most of the discussions surrounding the agricultural sector in 2018, with some questioning growth prospects of this sector. However, this industry has a lot of growth ahead of it, as demonstrated by its 6.5 percent growth over the last three months of 2018,” explains Lang.

“Further to this, the industry is also already taking significant advantage of seven climatic regions in South Africa, with the export of a wide variety of high quality fruit and vegetables increasing substantially,” he points out. The recent outbreak of foot and mouth disease that has resulted in the suspension of the country’s FMD-free status will however significantly impact meat exporters.

In terms of opportunities for SMEs, he says that these may most likely be found in the rural and underdeveloped regions, where the need for resources like efficient transport, state-of-the-art cold storage, better irrigation and private power generation will be key to making agriculture projects more productive and competitive in the export market.

Data and information technology

Connectivity and information technology infrastructure are both crucial to business and employment growth in South Africa, says Lang.

“With many municipalities and the Western Cape government committing to providing all of its residents with free data as part of a plan to expand public Wi-Fi network access, it is clear that this is also becoming a high priority on a state level.” 

Related: 9 Ways To Elevate Your Small Business To The Next Level

It has also been reported that South Africa is awaiting the arrival of three international data centres, and large players in the communications sphere, including Vodacom, Telkom and Vumatel, are making huge strides in drastically growing the country’s fibre optic backbone, he adds. “As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and sub-contracting agreements over the coming years.”

In conclusion, Lang says that as South Africa’s economic growth has started to turn around, business owners should keep their ears to the ground as 2019 is highly likely to be a year of opportunity.

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Herman Mashaba To Talk On City Of Jo’burg Job Creation Initiative

Herman Mashaba to talk on City of Jo’burg job creation initiative at 2019 Business Day TV SME Summit.

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Mayor of the City of Johannesburg, and one of South Africa’s most successful entrepreneurs, Herman Mashaba, will be one of the presenters at the 2019 Business Day TV SME Summit which will be taking place at The Empire Venue in Parktown on 7 March 2019.
Now in its third year, the Business Day TV SME Summit provides an opportunity for small business owners, entrepreneurs, incubators, franchisors, investors, as well as suppliers to the SME sector to come together and engage with experts in the business, technology, marketing and investment fields.
Having founded the now iconic hair-care brand, Black Like Me, more than thirty years ago during the apartheid era and on the back of a R30,000 loan from a friend, Mashaba’s experience in establishing an entrepreneurial enterprise holds great value for small and medium-sized business owners in South Africa. Mashaba will also be highlighting the City of Johannesburg’s innovative drive to stimulate inner city opportunities and job creation.
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Managing finances and obtaining funding and expansion capital are challenges many entrepreneurial businesses face as they look to grow their footprint in the market. Darren Segal, Personal and Business Banking Innovation executive at Standard Bank – one of the partners of the SME Summit – will present advice on negotiating funding and finance, to ensure effective cash flow management.
Complex tax issues will also be covered by a representative from the office of the Tax Ombudsman.
Taryn Westoby, Head of Tiso Blackstar Events which manages the SME Summit and curates the speaker line-up says: “We work alongside Business Day TV to meet the requirements of those engaged in the SME sector, so that the content of the Summit aligns to some of their most pressing concerns and needs. The line-up of speakers includes experts in the fields of business scaling, marketing strategy, intellectual property (IP) rights, and risk mitigation.”
As such, Graham Mitchell from GROW has been engaged to share insights into the leadership required to scale a winning management team.  Vishen Pillay, partner at Adams & Adams and an authority on copyright, patents, and trademarks, will provide guidance on protecting IP. Therusha Bhagarette of Credit Guarantee Insurance Corporation of Africa Ltd will expound further on the do’s and don’ts of risk management. The full line-up of expert speakers and topics will be published on www.smesummit.co.za.

International perspective

An international perspective to entrepreneurship will also be provided through Business Day TV’s The Big Small Business Show and a pre-recorded session with Uri Levine: renowned serial entrepreneur and founder of Waze.  Levine was recently in South Africa as a guest of Tiso Blackstar to deliver the keynote presentation at the prestigious Sunday Times Top 100 Companies Awards to an audience of CEOs from the top-performing companies on the JSE.

Leading organisations at the SME Summit

Once again, leading organisations have committed their participation at the Business Day TV SME Summit, recognising it as one of the most effective platforms for SMEs to engage professional insights and facilitate knowledge-sharing in support of much needed entrepreneurial development in SA.
This year’s headline partners are Credit Guarantee Insurance Corporation of Africa Limited, SAICA, and Standard Bank. Other partners include BDO, Adams & Adams, Liberty, Payfast, GROW, The Tax Ombudsman, W&R Seta, Telkom, Santam and The Little Green Number.
For sponsorship and exhibition opportunities:  Stephen Horszowski – stephen@tisoblackstar.co.za
Delegates who wish to purchase tickets for the full day event (07h00 – 15h00) at R995:  Lucy Johnson – johnsonl@tisoblackstar.co.za or visit  www.smesummit.co.za

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