During the National Council Of Provinces (NCOP) budget vote speech delivered by the Deputy Minister of Trade and Industry in June 2011, it was highlighted that the South African Government sees the SME sector as “critical in stimulating economic development, and that it is also a pivotal area in terms of innovation, skills development, entrepreneurship, labour- absorption and job-creation”.
South African SMEs are classified according
to the National Small Business Act in terms of number of employees, total annual turnover and total gross asset value. The general measurement used is normally number of employees, which are less than 50 for small companies and less than 200 for medium companies.
‘In South Africa, it is estimated that about 80% of the formal business sector and 95% of the total business sector (including informal) can be considered to be SMEs or MEs, accounting for about 46% of total economic activity, 84% of private employment and 97.5% of all newly registered businesses’.8
Open Innovation Types There are various Open Innovation approaches or types which can be deployed in an organisation. These Open Innovation types have different application and focus areas and should be understood when deciding which to pursue. Marais9
sites and defines the following Open Innovation types:
• Platforming: Providing a base product to which consumers can extend the capabilities of the product and add value to all involved (such as iPad and Apple store applications). • Idea Competitions / Challenges: Rewarding individuals, groups or companies for providing ideas to solve specific stated problems in the form of a competition or challenge.
70 Management Today | September 2012
87% OF COMPANIES RATED THEMSELVES TO BE INNOVATIVE
The Innovation Journal
• Customer Immersion: Observation of the customer-product interaction process to further enhance products or services. • Collaboration: Developing new products, services or other capabilities through collaborating with customers, suppliers, or other third parties.
• Innovation Networks: Incorporating the input from a network of contributors such as innovation hubs, advisory boards and science centres.
Other important innovation types cited in literature (10,11)
are:
• Innovation Intermediaries: Companies which focus their business on helping other companies implement various facets of Open Innovation. • IP or Tech In-Licensing or Acquisition: Licensing or buying patents and technology and incorporating it into your organisation. • IP or Tech Out-Licensing or Selling: Licensing or selling your own patents and technology to other organisations or spinning out a new company.
• Lead Users: Identifying innovations added to your product by users for their own use and then incorporating the ideas back into your product.
One or more innovation types can be followed at any given time depending on the organisation’s innovation strategy and preference.
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