INNOVATIVE BUSINESSES GAIN MORE ACCESS TO GLOBAL MARKETS, STUDY FINDS

Fri 08 March 2024:

Innovation-active South African businesses have more skilled labour and greater access to the global markets compared to non-innovation enterprises, according to results from the latest round of the South African Business Innovation Survey (BIS).

The Human Sciences Research Council (HSRC) survey revealed that during the 2019 to 2021 period, 62% of South African businesses took scientific, technological, organisational, financial, or commercial steps aimed at realising an innovation.

According to the statement, training emerged as the most common innovation activity for 47% of innovation-active businesses, followed by software and database activities (29%), and marketing initiatives (25%).

Of the employees involved in these innovation activities, only 38 in 100 workers were female and 62 in 100 were African.

In addition, the computer sector had the highest proportions of businesses with innovation activities and innovation.

“There remains significant scope for businesses in South Africa to undertake innovation activities that result in novel innovations, and do so in an inclusive manner.

“In South Africa, where we face multiple challenges, a more innovative business sector can contribute to productivity and business resilience as well as job creation, improved working conditions and quality of life,” said the HSRC’s Dr Amy Kahn, who led the BIS.

South Africa’s BIS, covering the period between 2019 and 2021, examined the innovation activities in about 5 500 enterprises — from small to very large, and across a range of industries.

Among these innovation-active enterprises, 37% introduced both product and process innovations, while 23% had only product innovations and another 23% only process innovations.

The remaining 17% of innovation-active businesses either did not have innovations or abandoned their innovation projects by the end of 2021.

Among advanced and emerging technologies, the Internet of Things (IoT) technologies were most widely used or developed by 80% of all innovative businesses.

The IoT describes devices with sensors, processing ability, software and other technologies that connect and exchange data with other devices and systems over the internet or other communications networks.

The survey report, prepared for the Department of Science and Innovation by the HSRC’s Centre for Science, Technology and Innovation Indicators (CeSTII), provides new evidence for policymakers to foster business innovation and offers new insights for business leaders and industry associations regarding the innovation landscape in South Africa.

“The innovation situation for all South African businesses should concern us, including why firms do or do not innovate,” added CeSTII Research Director, Dr Moses Sithole.

Meanwhile, high costs were a significant barrier to innovation for 27% of all businesses, the survey found, as well as too much competition (25%) and lack of funds (24%).

“Product and process innovations tended toward quality improvements, including enhanced working conditions, product quality, and overall quality of life and well-being, rather than cost-related outcomes,” explained Sithole.

The BIS report also delves into the distinct innovation practices of a wide range of South African businesses.

“The analysis conducted in this round of the Business Innovation Survey takes us significantly closer to understanding the South African business innovation practices that shift the needle. This informs how we should design support for greater business innovation in our country,” said Executive Head of CeSTII, Dr Glenda Kruss.

For example, HSRC said the survey highlighted that businesses without formal innovation processes, such as research and development (R&D), patenting or not collaborating with external entities, were more likely to abandon their innovation projects.

On the other hand, companies with the capability to develop their innovations in-house and more novel product innovations had the highest turnover in 2021.

Also, businesses more connected to global markets and with higher product innovation novelty held greater intellectual property rights.

“A fine-grained understanding of the patterns of innovation exhibited in South African businesses enables us to build the capabilities suited to South Africa’s context and its challenges.”

– SAnews.gov.za

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