IN SOUTH AFRICA, BUSINESS MODEL INNOVATION RECEIVES VERY LITTLE ATTENTION BY BOTH BUSINESS LEADERS AND THE PUBLIC SECTOR
efforts to stimulate science, technology, industrial and human resource development.
However, I would like to shift the attention a bit closer to the real world of business by taking a regional perspective. A regional innovation system describes all the private, public and intermediary actors that network, compete, collaborate and learn together about regional competencies, regional resources and unique local framework conditions. Typically, a regional innovation system describes the identity, patterns of interaction and unique or differentiated institutions that exist that stimulates
knowledge creation, knowledge
diffusion, collaboration and competition. Thus the emphasis is less on individual firms towards sectors or even whole regions, cities, towns or communities. It involves both public and private leadership and can be passive (it is just the way it is), or actively shaped. Successful regions often have active programmes to diversify their economy,
build unique local institutions that
support not only capacity building but also enables networking and collaboration. Regional innovation systems reduces search costs (the costs of finding suppliers and collaborators) and creates a density of networks that are rich in sharing and disseminating knowledge and information.
What do we see when we look at regional innovation systems in South Africa? This section will draw on my experience in the last years at diagnosing sectoral and local innovation systems in South Africa in the foundry and metals sector in the Vaal region, electronics, tooling, power engineering, pharmaceutical, chemical and food technology innovation systems. Much of this work was done in the context of supporting Technology Stations at the various universities. While some of these innovation system diagnoses was at a national level, most was biased to a building a regional innovation approach that combined local institution building with sectoral innovation system approach.
The Innovation Journal
Firstly, we see that too many of the policies to stimulate industries and innovation is driven from the national level policy priorities. This means that interventions often remain generic, while interventions are designed using national aggregate trends that ignore sub-national structural shifts. For instance, at a national level the electronics sector appears to be doing well, while at the regional level there has been a complete collapse of the sector in some regions. At the local level, very little is done to exploit or leverage unique local circumstances, local institutions, patterns, competencies or networks. Even local universities are focused more on national incentives and directives than on exploiting unique local opportunities, obstacles or problem pressures. At least these institutions can still respond flexibly. Small enterprise development, development finance and other public agencies
represented at the local
level are extremely unresponsive to the local context. Despite a favourable climate created by the mandate of local governments to facilitate Local Economic Development, the focus remains on getting the marginalised into the mainstream economy rather than on building local competitive advantage that creates jobs, wealth and unique local framework conditions. I will not even express my dismay at how difficult it is to get local public organisations to respond to unique problems or challenges in the locality that could provide a much needed innovation impulse into the private sector.
Secondly, the main priority of the broader public sector is on product and process innovation. There is too little focus on creating new markets, experimenting with new business models and exploiting new technologies in a systemic way, never mind stimulating the broader innovation system. Researchers and policy makers also measures patents more than market access, wealth creation, or jobs created. There is too little focus on how
September 2012 | Management Today 33
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