A win-win model for local innovation
Taking the view that good ideas without business innovation are not worth the paper they are printed on, the University of Johannesburg's Professor Willem Clarke is spearheading a multi- million rand project to marry tech- nological innovation with industry and business, to create an African- ised "silicon valley" in Johannes- burg.
It is a model he believes could prove effective for driving inno- vation and job creation across numerous sectors in South Africa, in line with the government's drive to promote innovative job creation projects and a knowledge economy. It also supports the government call for more emphasis on science, tech- nology and innovation.
Recently, Science and Technology Minister Derek Hanekom said there was a need to increase local research, development and inno- vation capacity, to address South Africa's socio-economic challenges.
The project, Resolution Circle, is an independent entity formed this year to incubate technology and engineering start-ups.
Clarke said that the model goes way beyond providing office space and plug points. It is a model based on global success stories and tailored for the South African market.
The total investment for the whole project by both the National Skills Fund and UJ is more than R300-million to date, he said.
Best of all the funding needed for on-going support is available in South Africa, from broad-based black economic empowerment (BEE) enterprise development funding, he said.
If early signs are any indication, Resolution Circle can in future expect to launch multiple start- ups and could even attract inno- vations from around the world to Johannesburg.
This win-win model will allow engineering students to get practical industry experience that completes their diplomas, provide start-ups with the support they need to launch their business, enable locally-based technology research and develop- ment — and give companies a means to improve their BEE scores with tax incentives to boot.
The model will enable entrepreneurs to grow their technology businesses, develop products or take innovations to market with the backup of experienced industry players and a wealth of resources. "With UJ's Resolution Circle, you have a ten ton gorilla behind you," said Clarke.
It is a viable model that could work in other industry sectors, and Clarke said he had met with overwhelming enthusiasm from industry so far.
Although the full project is around two years from realisation, the first 12 research and development labora- tories are being built and five start- ups are already up and running.
Clarke said South Africa is rich with innovation.
"If I look at how many people pitch ideas to me – I can tell there's no shortage of ideas. What's missing is innovation in business models," he said.
A lack of resources, funding and business skills also stands in the way of entrepreneurs taking their inno- vations to market.
Clarke believes Resolution Circle will overcome these challenges and allow for innovative technology entre- preneurs to thrive in South Africa.
Resolution Circle Pty (Ltd), launched in May this year, is a 100% UJ-owned company with its own, independent, board of directors that reports to the management of UJ.
To date, the company has recruited 19 employees, a number of whom are recognised and experi- enced engineers.
The concept was born of the reality that many engineering students lack practical experience but large numbers of students battle to find placements where they can complete the one-year practical training component of their diploma courses.
"This has been a significant problem for many years," said Clarke. "Students are required to undergo six months' workshop training and spend six months working on industry projects. If they cannot find suitable placements, there is a delay in them obtaining their qualification."
This, he said, is a problem in other technical degrees too. The new entity aims to combine students from a range of disciplines, including engineering, information technology and industrial design, in a multi-disciplinary environment, collaborating on projects.
Resolution Circle will supply the experienced engineers and facilities, and facilitate collabora- tion between students and new or existing companies, to enable commercially viable research and development and innovation devel- opment work.
The company will also help drive the commercialisation of technology through licensing, projects, joint ventures and start-up companies.
It has even gone so far as to embark on a campaign to make engineering, science and technology "sexy", with the help of its own TV production studio, which produces programming to market the fields and Resolution Circle.
What makes Resolution Circle different from academic institu- tions, said Clarke, is that it has an industry and profit focus.
"Its operating processes are designed for doing business, not primarily for education," he said.
The entity is fully involved in product development, from the generation of intellectual prop- erty, to prototyping development, sourcing or co-funding of develop- ment and the formation of start-ups and joint ventures.
As its contribution to a joint venture, Resolution Circle will provide admin support, office space, legal support, patenting and commercialisation services, HR support and tax registration and compliance, in addition to the research and development support and access to facilities.
Resolution Circle is in talks with a local bank to determine what risks factors stand in the way of financing for entrepreneurs, with a view to Resolution Circle helping miti- gate those risks and enable more financing for its partner start-ups.
In addition, the resource is not reserved for UJ students and start- ups. Established enterprises that want to develop new products or engage in research can partner with Resolution Circle too. Depending on their needs, companies can partner with Resolution Circle on research and development and project devel- opment, work on a project as a joint venture, or rent a research and devel- opment lab for their exclusive work.
When enterprises collaborate with the students on projects at the new hub, they will also benefit from a "try before you buy" employ model, Clarke said.
For production, Resolution Circle is setting up rapid prototyping small manufacturing labs.
"To compete with China on volume is difficult," Clarke said.
"WhereIseeagapisinoneto100 unit manufacturing. After 100 units have been manufactured and sold, it is easier to get funding for large- scale manufacturing, because proof of concept exists." The small scale manufacturing labs will enable entrepreneurs to produce small runs of product locally, before embarking on large- scale manufacturing.
"Because UJ or Resolution Circle will have a shareholding in start- ups, the support is geared to ensure the success of the new company. And fortunately, the funding may be available," he said.
"Resolution Circle is structured from the start to be tax and broad- based BEE efficient. Funding the project allows for a 150% research and development tax rebate."
This means R1 spent on research and development at Resolution Circle can be claimed back at R1.50 and it can also count as a broad-based BEE enterprise development exercise, with associated enterprise development points for companies, he said.
For more information, contact Professor Willem Clarke on [email protected], call 011 559 2156 or visit resolutioncircle.com
Resolution Circle takes a three- pronged approach, through a training workshop, design centre and industrialisation centre.
A R100-million, 900-seater training workshop is under construction, where students will spend 24 weeks in training, rotating through 3 different stages:
A "theoretical" stage where students will learn about workshop techniques, the Occupational, Health and Safety Act, do their first aid certificate, learn about quality standards, as well as product devel- opment and compliance issues.
A "mechanical" stage where students will learn important prac- tical skills, such as basic hand tools, power tools, fitting and turning, welding, and the like.
An "electrical" stage where students will learn many practical electrical and electronics skills, ranging from using advanced electrical test equipment, wiring practices, fault-finding, the full diagram-to-product development cycle, among others.
At the end of this 6 month period, students will be required to complete a project to demonstrate their practical skills.
A design centre with 100 custom- ised research and development labs will be built near UJ in Auckland Park, Johannesburg, where inter- disciplinary groups of approxi- mately five students each will work on industry problems, projects or products. Until they are complete, 12 labs are being rolled out at the Auckland Park campus of UJ.
Once complete, approximately 100 experienced and skilled profes- sionals, all employed by Resolution Circle, will support these labs. These will include engineers, tech- nicians and artisans. They will be supported by high-end workshops, with high-end equipment.
An industrialisation centre will be optimised for test and evaluation purposes, to simplify new product development efforts towards obtaining certifications from the South African Bureau of Standards, the CE mark (the mark of compli- ance to European Union standards) or other certifications.