Stimulating support for early stage funding
The Global Forum on Innovation and Technology Entrepreneurship was held from May 28 to 30 in East London. It was the fifth biennial event convened by infoDev, a funding programme managed by the World Bank Group, and the first time it was held on the African continent.
The event attracted about 800 policy-makers, entrepreneurs, business incubator managers, financiers and development agencies from 99 countries to the Eastern Cape for five days of training, talks, plenary and break-out sessions, and networking.
The global forum was brought to South Africa by infoDev in partnership with the department of science and technology (DST) under the theme "Harnessing innovative entrepreneurship for social and economic growth".
In his opening speech, Science and Technology Minister Derek Hanekom said: "It's a huge honour. This is a very significant forum. And the very fact that Janamitra Devan, vice president for finance and private sector development at the World Bank is here, tells you how much importance is attached to the global forum and the processes surrounding it by the World Bank itself.
"For us it's an acknowledgement that there's a great deal happening in South Africa and around the continent that needs to be unearthed, discovered and showcased."
He said that it was an acknowledgement of the opportunity and the need in South Africa. "The fact that there is an abundance of budding entrepreneurship doesn't mean it results in the growth targets we've set for ourselves, or the growth of those enterprises."
The country had a lot of potential, but more was needed to harness the nation's talent, said Hanekom.
Measures that could support entrepeneurship and innovation were important aspects for growth, including mentorship and advice, training people with the basics on how to set up businesses, financing small businesses and IP protection.
He stated that banks often saw these businesses as too risky, and there was a need for funding, "not recklessly, but to be less risk adverse than the traditional banking sector. We need institutions that are targeting the promotion of and support of innovation, including at the early stage where the risk is seen to be quite high. This is critical."
The partnership with infoDev is part of a broader partnership between the organisation and the South African government.
DST director general Dr Phil Mjwara said: "Why have we partnered infoDev for this event? We tend to think of a bank as a bank, but the World Bank has a wealth of knowledge on how to develop innovative technology enterprises.
"We have, of course, an ongoing relationship with the World Bank, and infoDev in particular, on how to best put policy and institutional arrangements in place to promote and support technology-intensive entrepreneurs.
"Additionally, because it's a bank, we can look at innovative financing mechanisms for financing these ideas. I always say if my son, who had just finished his undergraduate, comes to me saying 'dad, I have this earth-shattering idea,' would I fund that? Financing ideas is not a trivial thing, so we hope to share knowledge on risks and financing schemes."
South Africa's Technology Innovation Agency (TIA) was formed to do just that. So far it has been floundering with many objectives, however, Hanekom said that the DST had decided to steer the TIA into early stage innovation support as there were existing financiers for later stage innovation. He said that in the later stage, companies had opportunities for partnering and more conventional loan funding.
He added that there was not enough being done to stimulate and promote innovation. The DST was promoting a shift from purely academic research to research, development and innovation through the National Research Foundation, which would support research at universities, and establish research chairs and centres of excellence.
"We're putting more emphasis not only on funding research and measuring ourselves on how much we've done, but also on the value and impact of the research. In some research areas it's [about] translating the knowledge generated into something that is of value to society — a product or service. This is where the gap has been traditionally."
As part of its efforts to address such gaps, the government had set up the technology Innovation Agency, the Innovation Fund and technology stations. All these stations were located at universities around the country and offered support for small and medium enterprises (SMEs) in a particular sector, for example, the technology station in product development at Tshwane University of Technology assists SMEs with developing products for the market, he said.
Hanekom said there was a need for more expert eyes to identify innovative ideas and make those ideas commercially viable in ways that addressed market opportunities for commercial and social entrepeneurship. He emphasised that ideas on how to better education were also important.
Objectives of the Global Forum
The global forum offers attendees an opportunity to gain knowledge, first hand, on how to stimulate innovation and technology entrepreneurship.
The global forum aims to:
• Provide a platform for knowledge-sharing, capacity-building, networking and technology-based economic and social development;
• Bring together north-south and south-south communities for practice on innovation and entrepreneurship across core sectors including mobile applications, agribusiness, energy and clean climate technologies, technology-influenced social and human development;
• Convene international and regional partners and networks and create opportunities for learning and business;
• Strengthen infoDev's role as an entrepreneur and knowledge brokerage platform and underscore the value of being a member of infoDev's global network;
• Provide a platform for World Bank and the International Finance Corporation to engage client countries on issues relating to innovation and technology entrepreneurship;
• Strengthen South Africa's transformation to a knowledge-based innovative economy;
• Showcase South African knowledge and innovation initiatives such as provincial innovation systems, technology localisation and rural innovation; and
• Showcase high-potential and inspiring entrepreneurs through a competition, and provide them opportunities for partnerships and business linkages.
About the Technology Innovation Agency
The TIA was formed through merging seven department of science and technology entities previously tasked with supporting and promoting innovation. They included the Innovation Fund, Tshumisano Trust, Cape Biotech Trust, PlantBio Trust, LIFElab, BioPAD Trust and the Advanced Manufacturing Technology Strategy (AMTS).
The agency provides financial and non-financial support to its stakeholders — science councils, public entities, higher education institutions, private research institutions and entrepreneurs.