Carlman Moyo of DuPont is one of the chief executives who will sit on the CEO panel at the Innovation Summit. The panel discussion is due to start at noon on Wednesday August 28. (DuPont)
The call by government for South Africa to increase its spend on research and development (R&D) to at least 1% of gross domestic product is a target that is often cited when measuring the country's innovation standing.
Spend has grown significantly over the past 15 years, increasing to just under R21-billion in 2009 to 10 from R4-billion a decade before, which is still some way short of the 1% target.
The most disturbing point about the numbers is that these are also the most recent ones available from the department of science and technology (DST), which has not conducted a national R&D survey since.
The department stated in its most recent annual report that this will be taken up again in due course following internal discussions to align strategies.
These types of markers and indicators are important to assess South Africa's progress in improving homegrown innovation, not merely as a box-ticking exercise, but especially to identify obstacles hindering progress.
"We need to focus not on the accomplishments of the past but on the innovations still to come. It is also important that we look beyond the markets we serve today," says Carlman Moyo, regional director for DuPont Sub-Saharan Africa. He was commenting about DuPont's attitude toward innovation, although the sentiment is one that applies equally to the country's innovation stance.
Moyo is on the chief executive panel at this year's Innovation Summit and is personally and professionally qualified to comment on developing a deeper culture of innovation in South Africa.
"You need a culture that can foster innovation," he adds. "Research leaders need market insight and judgment to pick the right projects. Tomorrow’s opportunities are not necessarily where today’s business is, and we need to look forward to areas were we can combine our market insight and foresight with our technology and science leadership to identify the next opportunity."
This typically involves a degree of uncertainty, requiring business leaders to make considered decisions followed by ruthless action in execution. This should always be undertaken with the understanding that failure is a very real possibility.
Fostering local innovation
Moyo says that emerging markets have been DuPont's most consistent source of growth over the past decade and will continue to be a major factor of its growth and source of its innovations.
"It is no coincidence that our new innovation centres are in China, India, and Brazil where the new customers are and where we need to be with our technical resources."
Kevin Pillay, chief executive of infrastructure and cities at Siemens Africa, is a fellow panelist with Moyo at the Innovation Summit. He says the company is clearly committed to the region and fostering local innovation.
This it does through skills development and local knowledge transfer in the various local manufacturing and service facilities it has in the country.
There is then also the matter of the German-headquartered firm having an R&D budget more than double the size of South Africa's entire R&D spend, which benefits local customers and staff.
"Potentially, game-changing innovations are everywhere," says Pillay. "They are hidden in the minds of employees and customers and in projects at universities and research institutes. Tapping these sources is something employers are doing to an ever-increasing extent. As they do so, they are opening the doors of their labs, exchanging ideas with external partners, and creating a world of synergies.
"Every year the company enters into over 1 000 cooperative projects with universities, research institutes and industrial partners in an effort to strengthen its portfolio of innovations for the long term."
He explains that the concept of collaboration and information sharing has been integrated into his organisation's daily operations, making active use of social media to accelerate innovation and problem-solving processes. Siemens also uses of its intranet extensively to improve collaboration, which it can do on that platform in a more secure environment.
Collaboration is a key competency that organisations need to build if they are to succeed, he suggests.
Collaboration
Moyo adds that a singular focus on the goal must be one of the outcomes of both internal and external collaboration.
"The way you motivate a world-class research team is to show them the big picture, make sure they know what the overall objective is and provide great clarity for their role in the process.
“Our teams are very focused on delivering, and collaboration is a key tool in accelerating results," he says.
"I think you keep things fresh by continuing to challenge the organization to look for the next new thing. When you maintain high standards and keep track of the frontiers of science — where the rate of change for technologies is the greatest — then the opportunities will follow."
Like Siemens, DuPont has a strong internal focus on innovation and new product development. Moyo explains that this is done through formal structures such as the technology council and technical leadership teams that meet regularly to drive technology coordination across the company.
It also uses its annual technical conference that gathers customers, external stakeholders, DuPont scientists and business leaders to share and learn from each other.
Among the many programmes implemented by Siemens, is its global Sustainability Idea Contest that allows employees to submit ideas online over an eight-week period. These ideas are rated by fellow employees to filter the best suggestions, which are then explored further.
Siemens also has a company-wide Business Excellence programme that is tasked with improving products, solutions, services and processes. Proebstl says initiative is used to drive its high-performance culture as it stimulates and rewards innovation.
Moyo has six pieces of advice for organisations looking to tread down the innovation path: create an innovation culture throughout your organisation; drive the cultural change; collaborate and share; listen to the marketplace; understand your competitive advantage and exploit it; and make the tough decisions that will focus the business and resources from the start.
"You can spread even a considerable amount of resources too thin. Maintaining focus is critical, and we look for the most effective innovations and make sure we are resourcing those for success," he says.
Siemens' Pillay adds that large companies that have been successful at innovating have a responsibility to support small enterprises and partner with them.
"Very often it’s the small innovators that develop new and disruptive technologies that can change industries," he says. "They have smaller organisations with less processes and organisational structures, so they have more freedom and are more focused in developing a specific technology."
DST is coming to the party in this regard through the introduction of R&D tax incentives it championed to lighten the burden on private sector innovators.
Under this new scheme, introduced in October 2012, companies can claim an additional 50% deduction on their company tax for R&D activities over and above the 100% deduction they automatically receive for such activities.
This additional deduction is contingent on receiving pre-approval of the project from the minister of science and technology.
The department posted a notice in July this year that it had received 384 applications between announcing the scheme and 30 June 2013, an indication that the private sector is both aware of the incentives and ready to invest in product development.