Media release | South African agribusiness innovation survey kicks off

Friday, 19 August 2022 – South Africa’s official Agricultural Business Innovation Survey (AgriBIS) 2019-2021 gets underway today, with fieldworkers reaching out to commercial farming, forestry and fisheries businesses in the coming months.

Performed by the Human Sciences Research Council’s (HSRC) Centre for Science, Technology and Innovation Indicators (CeSTII) on behalf of the Department of Science and Innovation, the survey will be taking place for the second time in South Africa.

Covering a three-year period, 2019 until 2021, the survey takes stock of activity in a stratified random sample of 1700 large, medium and small or micro enterprises.

The AgriBIS project aims to monitor innovation performance in the agricultural sector in South Africa, using an internationally comparable methodology to generate statistics.

Information about each business’s innovations, which may include new products, new processes, as well as improvements to existing products or ways of working, is collected.

HSRC fieldworkers will contact businesses and the survey can be self-completed online or via a telephonic interview.

According to the head of CeSTII, Dr Glenda Kruss, global challenges of climate change, and pandemics like COVID-19, reinforce the importance of innovation. Countries are best placed to solve wide-ranging social and economic challenges when innovative products and processes are adopted, and technological capacity is built.

“The performance of South Africa’s agricultural sector, as a source of food security, job creation and the sustainable use of natural resources is critical for South Africa’s growth and development, to address goals of sustainability and inclusion,” says Dr Kruss.

“Understanding the nature and volume of innovation provides the insight government and industry actors need to fine-tune policy instruments and expand innovative solutions to diverse challenges across the agribusiness sector, including small and emerging businesses.”

“We thank the agricultural business sector in advance for contributing their time and insight when approached to participate in this important research, and we look forward to sharing the findings with government, industry and civil society stakeholders,” says Dr Kruss.

The survey results will be analysed in 2022/23 and published in 2023.

FOR MORE INFORMATION

About the Centre for Science Technology and Innovation Indicators 

–Contact the HSRC survey management team: Dr Yasser Buchana ybuchana@hsrc.ac.za

Previous results of the South African Agricultural Business Innovation Survey, 2016-2018

END

FOR MEDIA ENQUIRIES
Adziliwi Nematandani, HSRC
Email: anematandani@hsrc.ac.za
Join the conversation: #BusinessInnovationSurvey #SAInnovationData

FAQ | SA Agricultural Business Innovation Survey, 2019-2021

*You can also download these FAQ

SURVEY GOAL

What is the purpose of the Agricultural Business Innovation Survey?

Commissioned by the Department of Science and Innovation, and performed by the Human Sciences Research Council, the Agricultural Business Innovation Survey aims to deliver an internationally comparable report on innovation activities in South African agriculture, including farming, forestry and fisheries. Survey results will play a vital role in policymaking for technology, innovation, and economic development.

YOUR COMPANY’S PARTICIPATION

Why has my company been selected to participate in this Survey?

Statistics South Africa has drawn a random sample of approximately 1700 agricultural firms from the business register in line with its agreement on official national statistics with the Department of Science and Innovation (DSI)—and your firm was selected. The sample consists of a variety of businesses, ranging from very small to very large firms that operate in agricultural sub-sectors. Sub-sectors covered by the survey include: agriculture (crops, wineries, livestock and poultry), forestry, and fisheries.

What will my business gain from participating in the Survey?

A source of business intelligence, the Survey’s results can be used to benchmark your company’s innovation activities against other agricultural firms in your sector, both nationally and internationally. An added benefit of participation is the opportunity it presents for an internal review of potential business development areas that might not otherwise be explored. The results of previous South African innovation surveys are available online.

What does South Africa gain from my company’s participation in the Survey?

National business innovation surveys provide an essential source of data for evidence-informed policymaking towards increased inclusive economic growth and competitiveness. This is the second time South Africa will measure innovation in agricultural enterprises, filling an important gap.

Is there someone on the Survey’s team that can communicate in my mother tongue?

Our research assistants are ready to deal with the questions, comments or concerns of Survey respondents. Should you need to speak to one of the research assistants in your mother tongue, they will gladly assist you in South Africa’s official national languages.

I would prefer to complete the questionnaire electronically. How
can I do that?

The Survey questionnaire is available to be completed and submitted online through the RedCap platform or via telephonic interview, as well as via an Adobe Acrobat form that you can save and email to us. The online tool allows respondents to save progress and return later using a ‘Return Code’, which will be automatically issued to you when you save. Should you have any problems submitting your firm’s response to the survey, please contact innovation@hsrc.ac.za.

How will my company’s data be managed?

Questionnaires are stored in secure rooms and captured data is stored on secure servers at the Human Sciences Research Council premises in Pretoria and Cape Town, South Africa. All staff who work on the survey have signed strict agreements on the confidentiality of the data. Your company’s details and firm-level data will not be shared with any third party.

WHAT WE MEASURE

THE DEFINITION OF INNOVATION

What are the different types of innovation the Survey measures?

The South African Agricultural Business Innovation Survey recognises two types of innovation in firms:

Product innovation (including both goods and/or services);

Business process innovation.

This section of the FAQ provides detailed explanations and examples of each, as well as examples of what would not be considered an innovation in each category.

What makes a product or business activity an “innovation”?

Most people picture an invention new to the world when they think of innovation. In fact, three criteria are important in defining an innovation:

Does the product or activity represent significant change or improvement?

Is the activity or product new to the firm?

Has the product or process been made available to users or potential users?

Identifying an innovation: Three key criteria

If the change meets these criteria, it can be considered an innovation. While a given change could be an innovation for one firm, the same change may not be an innovation for another firm. In answering the Agricultural Business Innovation Survey, each firm has to decide for itself whether a particular change is new to the firm, whether the product or process has significantly improved, and whether it has been made available for use.

When does an innovation “belong” to an enterprise?

  1. If an enterprise has internally developed and implemented its own significant changes.
  2. If the enterprise has significantly improved or modified its existing products, processes, services, methods or delivery processes, either by internal development or by introducing a new idea from external sources.
  3. If an enterprise has implemented a new or significantly improved change, which may have originated elsewhere, such as the head office or a subsidiary company, another company, sector or country.

PRODUCT INNOVATION

What is a product innovation?

Product innovation relates to both goods and services. When a good or service is introduced to the firm and is new to that firm OR shows significant improvement with respect to the capabilities or planned uses, then the change represents a product innovation. A product innovation may include significant changes in technical specifications, components and materials, incorporated software, user experience, or other functional characteristics of the good or service.

Examples of product innovations that relate to goods and services in the agricultural sector

GOODSSERVICES
*Customised business software
(e.g. farm management software)
*Inclusion of eco-friendly products
in product ranges
*Automated harvesters
*New wood, furniture or paper varieties
*New wine blends
*Drought-resistant seeds
*Products with enhanced shelf-life
*Bio-energy or bio-fuels
*New smartphone apps
*New logistics services
*Online sales or direct sales to
end-users
*New kinds of product certification services
*Combining solutions, such as technical and consulting services
*Introduction of extended warrantees on new or used products
*Remote software maintenance
*New information technology applications for client servicing

What is NOT considered a product innovation?

  • Design changes that do not alter the function or technical characteristics of a good
    or service.
  • Routine upgrades, or minor changes or improvements.
  • Customisation for a single client that does not include significantly different attributes compared to products made for other clients.

PROCESS INNOVATION

What is a business process innovation?

A process innovation relates to improvements in production methods, delivery methods or distribution methods. For these process improvements to be considered innovations, they must be new to the firm OR significantly improved. These significant changes include those that relate to specific techniques, equipment and/or software, changes that are intended to improve the quality, efficiency or flexibility of a production or supply activity or logistics, or changes that reduce environmental or safety hazards.

Examples of business process innovations

  • Predictive data analytics
  • Introduction of software to identify optimal farming practices
    (e.g. smart irrigation)
  • New or improved software or routines for purchasing, accounting or maintenance systems
  • Robotics and sensors
  • Vertical farming, micro farming, hydroponics
  • Automated packaging
  • Computerised equipment for quality control of production
  • Mapping by drone
  • Smart boreholes
  • Installation of automated trucks and drill rigs
  • Radio-frequency identity tags

What is NOT considered a business process innovation?

  • An increase in production or service capabilities through the addition of manufacturing or logistical systems that are similar to those already in use.

WE’RE BLOGGING ABOUT THE SURVEY

If you would like to learn more about innovation measurement in South Africa, or interact with our technical team, explore our blog sabizinnovationsurvey.blog

Follow us on Twitter

@BizInnovationSA

FAQ | SA Business Innovation Survey, 2019-2021

Business Innovation Survey 2019-2021

*You can also download these FAQ

What is the purpose of the Business Innovation Survey?

The Business Innovation Survey aims to deliver an internationally comparable report on innovation activities in key sectors of the South African economy. Survey results will play a vital role in policymaking for technology, innovation, and economic development.

Why has my company been selected to participate in this round of the Survey?

Statistics South Africa has drawn a random sample of 5,500 companies from the business register in line with its agreement on official national statistics with the Department of Science and Innovation—and your business was selected. The sample consists of a variety of businesses, ranging from very small to very large firms that operate in key industrial and services sectors. Sub-sectors covered by the survey include:

  • financial intermediation
  • research and development
  • wholesale and retail trade
  • manufacturing
  • architectural and engineering activities
  • technical testing and analysis
  • computer and related activities
  • mining and quarrying, and
  • electricity, gas and water supply.

What will my business gain from participating in the Survey?

A source of business intelligence, the Survey’s results can be used to benchmark your company’s innovation activities against other enterprises in your sector, both nationally and internationally. An added benefit of participation is the opportunity it presents for an internal review of potential business development areas that might not otherwise be explored. The results of previous South African innovation surveys are available online.

What does South Africa gain from my company’s participation in the Survey?

National business innovation surveys provide an essential source of data for evidence-informed policymaking. In addition, the 2019-2021 survey round is being undertaken so that results are internationally comparable.

Is there someone on the Survey’s team that can communicate in my mother tongue?

The fieldwork team, based at GeoScope in Durban, are ready to deal with the questions, comments or concerns of Survey respondents. Should you need to speak to one of the research assistants in your mother tongue, they will gladly assist you in South Africa’s official national languages.

How can I complete my company’s innovation survey questionnaire?

The Survey questionnaire can be self-completed online through the RedCap platform or via telephonic interview.

How will my company’s data be managed?

Captured data is stored on secure servers at the Human Sciences Research Council premises in Pretoria, South Africa. All HSRC and GeoScope staff who work on the survey have signed strict agreements on the confidentiality of the data. Your company’s details and firm-level data will not be shared with any third party.

The definition of innovation

What are the different types of innovation the Survey measures?

The South African Business Innovation Survey recognises two types of innovation in firms:

  1. Product innovation (including both goods and/or services)
  2. Process innovation

This section of the FAQ provides detailed explanations and examples of each, as well as examples of what would not be considered an innovation in each category.

What makes a product or process an “innovation”?

Most people picture an invention new to the world when they think of innovation. In fact, three criteria are important in defining an innovation:

Does the product or process represent significant change or improvement?

Is the product new to the firm?

Has the product or process been made available to users or potential users?

Identifying an innovation: Three key criteria

If the change meets these criteria, it can be considered an innovation. While a given change could be an innovation for one firm, the same change may not be an innovation for another firm. In answering the Business Innovation Survey, each firm has to decide for itself whether a particular change is new to the firm, whether the product or process has significantly improved, and whether it has been made available for use.

When does an innovation “belong” to an enterprise?

  1. If an enterprise has internally developed and implemented its own significant changes.
  2. If the enterprise has significantly improved or modified its existing products, processes, services, methods or delivery processes, either by internal development or by introducing a new idea from external sources.
  3. If an enterprise has implemented a new or significantly improved change, which may have originated elsewhere, such as the head office or a subsidiary company, another company, sector or country.

What is a firm’s “innovation expenditure”?

Innovation expenditure is the amount of expenditure committed to innovation-relevant activities, including current expenditure (personnel, for example) and capital expenditure (for example, buildings or equipment). For the 2019-2021 round of the Survey, we request that you provide:

  1. turnover data for two years (2019, 2021), and
  2. expenditure data for one year.

If these data are not available to you when completing the questionnaire, please provide estimates. We also remind you that all firm-level data provided in this section of the questionnaire are kept strictly confidential and are not made public in any way.

PRODUCT INNOVATION

What is a product innovation?

Product innovation relates to both goods and services. When a good or service is introduced to the firm and is new to that firm OR shows significant improvement with respect to the capabilities or planned uses, then the change represents a product innovation. A product innovation may include significant changes in technical specifications, components and materials, incorporated software, user experience, or other functional characteristics of the good or service.

Examples of product innovations that relate to goods and services in the industrial and services sectors

GoodsServices
Services sector*Ticket automation for cash or pay card (e.g. parking systems)
*New point of sale systems
(e.g. scanner cash box)
*Customised business software (e.g. anti-fraud software that profiles and tracks individual transactions)
*New multimedia applications
(e.g. tablet)
*New smartphone apps
*New logistics services
*Dial in services (e.g. goods delivery)
*New or significantly improved insurance services (e.g. gap cover)
*Remote software maintenance
*Direct clearance with hospitals
Industrial sector*Inclusion of eco-friendly products in product ranges
*Introduction of client or loyalty cards
*Changes to materials e.g. breathable textiles
*New types of paper for specific printers
*Improved purity of final mining product
*Automated tunnel borers
*Autonomous mine site infrastructure
*Online sales or direct sales to end-users
*New kinds of product certification services
*Combining solutions, such as technical and consulting services
*Introduction of extended warrantees on new or used products
*Remote software maintenance
*New information technology applications for client servicing

What is NOT considered a product innovation?

  • Design changes that do not alter the function or technical characteristics of a good or service.
  • Routine upgrades, or minor changes or improvements.
  • Customisation for a single client that does not include significantly different attributes compared to products made for other clients.

Process innovation

What is a process innovation?

A process innovation relates to improvements in production methods, delivery methods, distribution methods, marketing methods, information systems, or organisational processes. For these process improvements to be considered innovations, they must be new to the firm OR significantly improved. These significant changes include those that relate to specific techniques, equipment and/or software that are intended to improve the quality, efficiency or flexibility of a production or supply activity or logistics, or changes that reduce environmental or safety hazards.

Examples of process innovations by sector

Services sector*New online banking modules
*Improved premium clearing systems
*Electronic Data Interchange
*CASE tools for customer-specific hardware
*Introduction of software to identify optimal delivery routes
*New or improved software or routines for purchasing, accounting or maintenance systems
*A reduction in the number of management levels to create greater flexibility in decision-making
*Integrated monitoring system for firm activities (e.g. production, finance, strategy or marketing)
*The introduction of an organisational division to support new product development in a specific area
*Bundling existing goods or services in new ways to appeal to market segments
*Design of new consumer products (e.g. custom appliances)
Industrial sector*Robotics
*Digital printing processes
*Automated packaging
*Computerised equipment for quality control of production
*Mapping by drone
*Smart boreholes
*Smart volts and vents
*Installation of automated trucks and drill rigs

What is NOT considered a process innovation?

  • An increase in production or service capabilities through the addition of manufacturing or logistical systems that are similar to those already in use.
  • Changes in management strategy not linked to significant organisational change.
  • Introduction of new technology that has limited benefits or is restricted to a small division of the firm.
  • Routine or seasonal changes.
  • Minor updates in the appearance of packaging.
  • Advertising, unless based on the use of new media or a new advertising technique.

Media release | Nation-wide survey of South African business innovation gets underway

Thursday, 24 February 2022 – On 14 March 2022 South Africa’s official Business Innovation Survey gets underway with fieldworkers reaching out to 5 500 businesses over the next six months.

This will be the seventh time the survey takes place in South Africa, which is performed by the HSRC’s Centre for Science, Technology and Innovation Indicators for the Department of Science and Innovation.

Innovation is internationally recognised as a key driver of economic growth. It takes place in many businesses – big, small, micro and informal. Countries are best placed to solve wide-ranging social and economic challenges when innovative products and processes are adopted, and technological capacity is built.

Covering a three-year period, 2019 – 2021, the business innovation survey method uses international measurement tools to compare South Africa with other countries.

The survey collects information about a business’s innovations. This may include new products, new processes, as well as improvements to existing products or ways of working.

“South Africa faces considerable economic challenges, worsened by COVID-19. Measuring our capacity to innovate and thus grow our economy and increase employment is now especially relevant” says Dr Glenda Kruss, head of the CeSTII.

Business leaders will be contacted by fieldworkers from GeoScope, the HSRC’s fieldwork partner for the survey. The survey can be self-completed online or via telephonic interview.

Covering the period 2019 to 2021 the survey will collect data from the sample of enterprises drawn from the business register held by Statistics South Africa. It will include enterprises in:
• mining
• manufacturing
• electricity, gas and water supply
• services, including wholesale and retail trade
• transport, storage and communication
• financial intermediation
• computer and related activities.
• research and development
• architectural and engineering activities
• technical testing and analysis

“Societies that innovate, and create the conditions to nurture innovative practices, prosper and grow. South Africa has long recognised the importance of innovation and several public programmes support innovation,” says Senior Policy Analyst of the Department of Science Innovation, Kgomotso Matjila-Matlapeng.

“We thank the business sector for supporting this important research by contributing their time and insight when approached to participate. We will be guided by the results of the survey and look forward to sharing the findings.”

HSRC and partners would like to send their gratitude to the business sector for supporting this important research by contributing their time and insight when approached to participate.

The survey results will be analysed in 2022/23 and published in 2023.

FOR MORE INFORMATION

END

FOR MEDIA ENQUIRIES

Adziliwi Nematandani, HSRC
Email: anematandani@hsrc.ac.za
Join the conversation: #BusinessInnovationSurvey #SAInnovationData

Analysis | The pace and direction of innovation is critical to South Africa’s economic recovery*

South African businesses may need to change how they innovate in order to survive the ‘new normal’, say the writers. (Illustration: Adobestock)

*First published on Daily Maverick, 28 July 2020.

Are South African businesses innovating quickly – and strategically – enough to improve their performance in the short to medium term? The results of the South African Business Innovation Survey, 2014-2016, released earlier in July 2020 by the Department of Science and Innovation, can help to answer this question.

Public policy debate about South Africa’s economy right now has tended to focus overwhelmingly on big picture explanations and recovery plans. Missing from this debate is a micro perspective, which places the emphasis on firm-level decisions and how these decisions ultimately drive or constrain business growth.

This is a harder discussion to enter into because of the evidence barrier in firms that are not publicly traded. Usefully, South Africa’s national business innovation surveys, which have been carried out since the 1990s, collect data retrospectively from businesses across the industrial and services sectors, through surveying a random sample of formal businesses, stratified by sector and size-class. 

This method ensures that survey results can be extrapolated statistically to the national population of businesses, resulting in unique and vital data for business leaders, industry lobbyists and government policy-makers, as well as for international comparison.

Most South African businesses do actually innovate

At the aggregate level, the 2014-2016 survey results paint a promising picture of an innovative formal business sector. That is, 69.9% of businesses were trying to innovate through, for example, performing research and development (R&D), training their staff, or purchasing new tech and equipment. And nearly all (96%) of these “innovation-active” businesses actually ended up with an innovation. 

An innovation, as measured by the survey, refers to the introduction to market of a new or significantly improved product (good or service), or the use of new or significantly improved process (methods for the production or supply of goods and services). 

From this definition, which comes to us from the Organisation for Economic Co-operation and Development’s (OECD) statistical handbook for innovation surveys, the Oslo Manual, the focus is both on novelty (new or improved) and implementation (introduction to market or firm). 

Looking back at the 2014-2016 period, businesses spent 1.97 % of the total turnover on innovation activities. Product innovations were found in 48.2% of South African businesses and process innovations in 34.6% of businesses. Marketing and organisational innovation was also reported for 41.7% and 42.0% of businesses, respectively. 

Encouragingly, businesses that were trying to implement products and/or processes during the period 2014-2016 reported positive product, process and market outcomes of innovation. 

For instance, improved quality of goods and services was considered by most (38.0%) of these businesses as a highly successful outcome of innovation, followed by increased revenue (31.8%), and improved profit margins (30.9%). 

Improved health and safety (27.0%) and reduction in environmental impacts (23.3%) were also rated by these businesses as highly important, compared to financial and quality outcomes.  

By contrast, entering new export markets or increased export market share was reported as a highly important outcome by only 7.5% of these product and/or process innovators.

Execution of innovation could be faster

A deeper dive into the data, however, points to some issues that should concern leaders from business, industry associations and government. 

Key among these issues is that 80.5% of business turnover in 2016 (down from 85% in the 2005-2007 results), was generated from products that were marginally modified or unchanged, with the balance of turnover generated from products new to the market (10.8%), new to the business (7.0%), or new to the world (1.8%). 

Put differently, at the end of a three-year period, only about 20% of total sales were brought about by new or improved goods or services (innovations), and less than 2.0% were accounted for by products considered by respondents as first-of-its-kind in the world.

Commentators may argue that businesses may just have been benefiting from innovations carried out prior to the survey reference period, or that innovation – especially R&D-led innovation – takes time to “bear fruit”. 

These are both legitimate explanations, though would bring little comfort to businesses facing down uncertainty brought about by global dynamics and “exogenous shocks”, like the Covid-19 pandemic.  

Indeed, in the current era of rapid change, driven to a large extent by technological advancement, the pace of innovation in some sectors can result in dramatic consequences for businesses and entire industries. There are countless examples of disruptive or radical innovations that demonstrate this. 

For example, it took Uber’s founders just five years from 2009 to launch ride-hailing services in all the major global capitals, including the South African service in 2013, resulting in what, by 2019, was a business with assets in excess of $30-billion. 

In this context, the company innovated relentlessly, introducing Uber Eats in 2014 and a plethora of market-specific services, like auto rickshaw rides on UberAuto in India, Sri Lanka and Pakistan. 

Equally, the Covid-19 pandemic has forced massive layoffs by Uber, about 14% of its workforce, and closed 45 offices, in a bid to keep the company afloat. 

And yet, in this extremely challenging business context, the launch of Uber Cash in South Africa in June 2020, represents just one example of how the company is using innovation to pivot towards new business growth opportunities. 

Strategy is key

In the context of the current global Covid-19 pandemic, which is fundamentally changing how businesses operate, South African businesses may need to change how they innovate in order to survive this “new normal”.

Working more collaboratively, for example, could be one strategy. The 2014-2016 survey results show that less than 10% of innovative businesses partnered with government research institutes (8%), universities (6.8%), or private research institutions (4.9%) to develop their innovations during 2014-2016. Indeed, leveraging synergies between formal knowledge producers, such as universities, and businesses through co-creation of innovations is an area of focus for the South African SME fund.

Additionally, reflection on the type of innovation activities in which to invest, against the survey’s data disaggregated by sector could inform firm-level strategy development processes.

It’s worth pointing out that innovation surveys also assess the constraints faced by businesses in deciding whether or not to innovate. 

In 2014-2016, for example, financial barriers such as a lack of funds, or a lack of credit, coupled with market barriers, such as markets dominated by established businesses, impacted on innovation decision-making. 

Much less significant, in this regard, were institutional factors such as legislation, regulation, standards and taxation, or lack of skills. 

It is knowledge of these barriers, and other indicators delivered by a national innovation survey, that provides a critical starting point for businesses and government to consider how to support innovation within the formal business sector. 

Within the context of the country’s economic recovery, leaders across the political, corporate and small business landscape would do well to consider this data, as well as the analysis thereof, as part of their decision-making toolboxes. DM/BM

Dr Moses Sithole, a mathematician and statistician, is Research Director at the Centre for Science, Technology and Innovation Indicators at South Africa’s Human Sciences Research Council. Dr Yasser Buchana is a Post-Doctoral Research Fellow at the Centre for Science, Technology and Innovation Indicators at the Human Sciences Research Council. Gerard Ralphs is Policy Analyst and Programme Manager at the Centre for Science, Technology and Innovation Indicators at the Human Sciences Research Council. 

Analysis | Survey shows South African firms in some sectors are highly innovative

Mining and utilities businesses have low levels of innovation. Getty Images

Glenda Kruss, Human Sciences Research Council and Moses Sithole, Human Sciences Research Council

The ‘one good thing’ caused by COVID-19, according to a recent Harvard Business School publication by Hong Luo and Alberto Galasso, is that it has catalysed innovation. This is apparent in South Africa too, where businesses are introducing changes to mitigate the risks of the pandemic. They are adjusting their practices and strategies, introducing new technologies, products and designs, and determining how they can use digital and automated technologies.

But will they last?

The country’s Centre for Science, Technology and Innovation Indicators, with the Department of Science and Technology and Statistics South Africa, has released the latest national business innovation survey. The survey helps to answer critical questions facing business leaders, industry groups and government policy-makers. The data can help the country’s understanding of the innovation taking place in businesses, so that more firms can be encouraged to innovate. The survey covered the period 2014 -2016.

How innovative are South African firms and what types of innovation have they implemented?

The survey found that innovation was pervasive across all sectors, but particularly in engineering and technology, manufacturing and trade. A high percentage – nearly 70% – of South African businesses were innovation-active. This meant that they had taken some scientific, technological, organisational, financial or commercial steps towards implementing an innovation. The proportion of innovation-active businesses compares favourably with trends in OECD countries.

But, to respond to current challenges, it is critical to understand what kinds of innovation firms are able to implement, and whether the kinds of benefits that result from them can contribute to business strategies and to inclusive and sustainable growth.

What types of innovation have firms implemented?

Innovation surveys typically measure four types of innovation. These are product, process, organisational and marketing.

The survey found that there were distinct patterns of these types of innovation in different economic sectors.

For example, mining and utilities businesses reflected low levels of innovation. For its part, manufacturing had the largest proportion of businesses with product innovation (59.8%) and marketing innovation (43.4%).

Process innovation was most prominent in logistics businesses (61.7%). More finance (52.0%) and manufacturing (49.1%) businesses reported organisational innovations than businesses in any other sector.

Each type of innovation requires specific forms of support.

Businesses most typically invested in innovation activities that helped them to prepare for technological and organisational change. They did this by training their workforces and investing in new information technology capabilities (Figure 1).

For both the industrial and services sectors, the biggest-ticket item of innovation spend was the acquisition of machinery and equipment.

Figure 1.

A substantial number of innovation-active businesses reported the use or development of advanced new technologies. These included computerised design and engineering, material handling, supply chain and logistics technologies, business intelligence technologies, and green technologies (Figure 2).

Figure 2.

These innovation capabilities suggest that there is a foundation for promoting more innovation that can lead to more positive economic outcomes.

The benefits

Innovation was less likely to have an immediate impact on turnover, and was far more likely to be incremental than radical.

Innovations with high degrees of novelty, such as new to the market or to the world products, did not have a strong effect on the turnover of the businesses that reported product innovations. So, just over 80% of their turnover was generated by goods and services that were unchanged or marginally modified. This was in contrast to a product that was new to the market (10.8%), new to the business (7.0%), or new to the world (1.8%).

Quality improvement was the top-rated innovation outcome for innovation-active businesses. Improved quality of goods and services was considered by 38.0% of product and process innovators as a highly successful outcome of innovation. This was followed by increased revenue (31.8%) and improved profit margins (30.9%).

Similarly, for nearly 50% of organisational innovators, improved quality was the main innovation outcome.

Entering new export markets – or increased export market share – as a highly successful innovation outcome was reported by only 7.5% of product and process innovators.

Innovation-active businesses also accessed national and global markets more than their counterparts with no activity. This included markets in the rest of Africa, Europe and Asia. Businesses with innovation activity were more likely to have sold their goods and services on national markets (58.1%), when compared to non-innovation-active businesses (37.7%).

Firms that were not innovation active were more restricted in their reach. They accessed selected provincial markets (57.4%) more than any other market.

The challenge is to grow the scale and range of types of innovation, to ensure that such outcomes and benefits are more widespread across more sectors and businesses.

Solutions

Businesses’ perceptions of the barriers to innovation were grouped into four sets of factors. (See Figure 3.) These provide critical insights into potential spaces for intervention.

The most significant barriers relate to market factors. These include market dominance of established firms, too much competition, and uncertain demand. For non-innovation-active businesses, the most widely reported barrier was a lack of demand for innovation.

To address these barriers requires stimulation of new and expanded markets. In the South African case this requires structural economic reforms. There are a number of steps government can take. It can, for example, ensure that regulatory conditions are more conducive for creating new businesses. It can also improve the transport and communication infrastructure.

Government also has an important role in stimulating demand in the context of the economic, social and health challenges of COVID 19.

Cost factors were also significant. These ranged from the costs of innovation being too high, to lack of funds for innovation within the business or from external sources such as government or private equity.

The vast majority of innovation-active businesses relied on their own funds to innovate (77.0%). Only 1.7% relied on government as a source of funds.

This points to the fact that public sector funding can be targeted more effectively to stimulate innovation. Examples include the new Sovereign Innovation Fund proposed in the 2020 budget or the R&D tax incentive.

But it’s equally important to create conditions that make private equity funding more attractive.

Knowledge factors were not as significant. Nevertheless, strengthening the link between innovation and skills development strategies would be valuable.

Institutional factors, such as legislation, regulatory and intellectual property rights frameworks, and infrastructure were not perceived as significant barriers.

Figure 3.

Way forward

In local, national and global contexts, rapidly advancing digital technologies and their applications have opened up the space for innovations as yet unimagined in products, processes, marketing and organisation.

The evidence from the business innovation survey is an invaluable opportunity to reflect on where South Africa’s innovation strengths and challenges lie. It also opens the door to interrogate how existing policies and funding mechanisms can be used more effectively to facilitate business innovation in the country.

Glenda Kruss, Executive Head of the Centre for Science, Technology and Innovation Indicators, Human Sciences Research Council and Moses Sithole, Research Director, Centre for Science, Technology and Innovation Indicators, Human Sciences Research Council

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Analysis | Nigeria and SA’s innovation performance compared

Nigeria and South Africa are Africa’s largest economies, with a combined GDP that rivals those of all other African nations together. However, GDP growth rates in both countries have stalled in recent years, and major societal ills persist. As middle-income economies that have made a transition from primary industry to services-based growth, Nigeria and South Africa’s innovation performance should concern policy-makers.

Manufacturing

As the manufacturing sector comparison illustrates, while firms in both countries use technology acquisition as the key innovation strategy to improve the quantity and quality of their value propositions, Nigerian and South African firms face critical financial and other barriers to innovation.

Services

The services sector comparison illustrates that while services firms in both countries use training and technology acquisition as key innovation strategies to improve the quantity and quality of their value propositions, Nigerian and South African firms face critical financial and other barriers to innovation.

Behind the numbers

These fact sheets represent a joint product of the Centre for Science, Technology and Innovation Indicators (CeSTII) at South Africa’s Human Sciences Research Council and Nigeria’s National Centre for Technology Management (NACETEM).

They were produced during a research visit to South Africa by NACETEM’s Dr Abiodun Egbetokun in May 2019, which was sponsored by the InterAcademy Partnership.

Both CeSTII and NACETEM are responsible for the production of science, technology and innovation indicators. Data is drawn from the South African Business Innovation Survey (2008) and from the Nigerian Business Innovation Survey (2010).

Both surveys were conducted using the OECD’s Oslo Manual, allowing for international comparability of data. GDP data was sourced from Statistics South Africa and Nigeria’s National Bureau of Statistics.

About CeSTII and NACETEM

CeSTII is a policy research institute of the Human Sciences Research Council, which performs national studies on R&D and innovation on behalf of the Department of Higher Education, Science and Technology. Learn more

Contact Dr Glenda Kruss | gkruss[at]hsrc.ac.za

NACETEM is an agency of Nigeria’s Federal Ministry of Science and Technology that provides critical knowledge support in the area of STI management for sustainable development. Learn more

Contact Prof. Okechukwu Ukwuoma | dg.ceo[at]nacetem.gov.ng

FAQ | SA Agricultural Business Innovation Survey, 2016-2018

*Fieldwork for SA Agricultural Business Innovation Survey 2016 – 2018 ended on 30 September 2019. 

AgriculturalBISLogo_V2

*You can also download these FAQ

What is the purpose of the Agricultural Business Innovation Survey?

Commissioned by the Department of Science and Technology, and performed by the Human Sciences Research Council, the Agricultural Business Innovation Survey aims to deliver an internationally comparable report on innovation activities in South African agriculture, including farming, forestry and fisheries. Survey results will play a vital role in policymaking for technology, innovation, and economic development.

Why has my company been selected to participate in this round of the Survey?

Statistics South Africa has drawn a random sample of 1,690 agricultural firms from the business register in line with its agreement on official national statistics with the Department of Science and Technology—and your firm was selected. The sample consists of a variety of businesses, ranging from very small to very large firms that operate in agricultural sub-sectors. Sub-sectors covered by the survey include: agriculture (crops, wineries, livestock and poultry), forestry, and fisheries.

What will my business gain from participating in the Survey?

A source of business intelligence, the Survey’s results can be used to benchmark your company’s innovation activities against other agricultural firms in your sector, both nationally and internationally. An added benefit of participation is the opportunity it presents for an internal review of potential business development areas that might not otherwise be explored. The results of previous South African innovation surveys are available online
(http://www.hsrc.ac.za/en/departments/cestii/latest-results).

Will my company’s participation contribute to a national perspective on innovation in South Africa?

National business innovation surveys provide an essential source of data for evidence-informed policymaking towards increased inclusive economic growth and competitiveness. This is the first time South Africa will measure innovation in agricultural enterprises, filling an important gap.

Is there someone on the Survey’s team that can communicate in my mother tongue?

Our research assistants are ready to deal with the questions, comments or concerns of Survey respondents. Should you need to speak to one of the research assistants in your mother tongue, they will gladly assist you in South Africa’s official national languages.

I would prefer to print out the completed questionnaire and
return it via post. How can I do that?

Should you wish to submit your survey response via the postal services, please notify one of our research assistants, who will dispatch a questionnaire
and business reply envelope to your physical address, which you can use to return your questionnaire to us. Alternatively, please send your questionnaire to:
Centre for Science, Technology and Innovation Indicators
Human Sciences Research Council
Agricultural Business Innovation Survey 2016 – 2018
PO Box 15200
Vlaeberg
8018

I would prefer to complete the questionnaire electronically. How can I do that?

The Survey questionnaire is available to be completed and submitted online, as well as via an Adobe Acrobat form that you can save and email to us. The online tool allows respondents to save progress and return later using a ‘Return Code’, which will be automatically issued to you when you save. Should you have any problems submitting your firm’s response to the survey, please contact innovation@hsrc.ac.za.

How will my company’s data be managed?

Questionnaires are stored in secure rooms and captured data is stored on secure servers at the Human Sciences Research Council premises in Pretoria and Cape Town, South Africa. All staff who work on the survey have signed strict agreements on the confidentiality of the data. Your company’s details and firm-level data will not be shared with any third party.

What are the different types of innovation the Survey measures?

The South African Agricultural Business Innovation Survey recognises four types of innovation in firms: 1. Product innovation (including both goods and/or services); 2. Process innovation; 3. Organisational innovation; 4. Marketing innovation. This section of the FAQ provides detailed explanations and examples of each, as well as examples of what would not be considered an innovation in each category.

What makes a product or business activity an “innovation”?

Most people picture an invention new to the world when they think of innovation. In fact, two criteria are important in defining an innovation: 1. Does the product or activity represent significant change or improvement? AND/OR 2. Is the activity or product new to the firm? If the change meets either or both of these criteria, it can be considered an innovation. While a given change could be an innovation for one firm, the same change may not be an innovation for another firm. In answering the Agricultural Business Innovation Survey, each firm has to decide for itself whether a particular change is new to the firm and/or whether the product, process or service has significantly improved.

When does an innovation belong to an enterprise?

  1. If an enterprise has internally developed and implemented its own significant changes.
  2. If the enterprise has significantly improved or modified its existing products, processes, services, methods or delivery processes, either by internal development or by introducing a new idea from external sources.
  3. If an enterprise has implemented a new or significantly improved change, which may have originated elsewhere, such as the head office or a subsidiary company, another company, sector or country.

What is a product innovation?

Product innovation relates to both goods and services. When a good or service is introduced to the firm and is new to that firm OR shows significant improvement with respect to the capabilities or planned uses, then the change represents a product innovation. A product innovation may include significant changes in technical specifications, components and materials, incorporated software, user experience, or other functional characteristics of the good or service.

Examples of product innovations that relate to goods and services in the agricultural sector

GOODS

  • Customised business software (e.g. farm management software)
  • Inclusion of eco-friendly products in product ranges
  • Automated harvesters
  • New wood, furniture or paper varieties
  • New wine blends
  • Drought-resistant seeds
  • Products with enhanced shelf-life
  • Bio-energy or bio-fuels

SERVICES

  • Customised business software (e.g. farm management software)
  • Inclusion of eco-friendly products in product ranges
  • Automated harvesters
  • New wood, furniture or paper varieties
  • New wine blends
  • Drought-resistant seeds
  • Products with enhanced shelf-life
  • Bio-energy or bio-fuels

What is NOT considered a product innovation?

  • Design changes that do not alter the function or technical characteristics of a good
    or service.
  • Routine upgrades, or minor changes or improvements.
  • Customisation for a single client that does not include significantly different attributes compared to products made for other clients.

What is a process innovation?

A process innovation relates to improvements in production methods, delivery methods or distribution methods. For these process improvements to be considered innovations, they must be new to the firm OR significantly improved. These significant changes include those that relate to specific techniques, equipment and/or software, changes that are intended to improve the quality, efficiency or flexibility of a production or supply activity or logistics, or changes that reduce environmental or safety hazards.

Examples of process innovations by sector

  • Predictive data analytics
  • Introduction of software to identify optimal farming practices (e.g. smart irrigation)
  • New or improved software or routines for purchasing, accounting or maintenance systems
  • Robotics and sensors
  • Vertical farming, Micro farming, hydroponics
  • Automated packaging
  • Computerised equipment for quality control of production
  • Mapping by drone
  • Smart boreholes
  • Installation of automated trucks and drill rigs
  • Radio Frequency Identity Tags

What is NOT considered a process innovation?

An increase in production or service capabilities through the addition of manufacturing or logistical systems that are similar to those already in use.

What is an organisational innovation?

An organisational innovation is intended to significantly improve the firm’s innovative capacity or performance characteristics. This can encompass significant changes in workplace organisation, business practices or external relations implemented in the firm.

Examples of organisational innovations

  • A reduction in the number of management levels to create greater flexibility in decision-making.
  • Integrated monitoring system for firm activities (e.g. production, finance, strategy or marketing).
  • The introduction of an organisational division to support new product development in a specific area.

What is NOT considered an organisational innovation?

  • Changes in management strategy not linked to significant organisational change.
  • Introduction of new technology that has limited benefits or is restricted to a small division of the firm.

What is a marketing innovation?

The implementation of a significant change in sales and marketing methods would qualify as marketing innovation. “Significant” would include improved product appearance and packaging that is intended to increase product appeal and/or consumer awareness.

Examples of marketing innovation

  • Bundling existing goods or services in new ways to appeal to market segments

What is NOT considered a marketing innovation?

  • Routine or seasonal changes.
    Minor updates in the appearance of packaging.
    Advertising, unless based on the use of new media or a new advertising technique.

Call for Participation | Innovation Data UserX Design Hackathon

The Centre for Science, Technology and Innovation Indicators (CeSTII) and the National Advisory Council on Innovation (NACI) are pleased to invite participation in an innovation data hackathon taking place from 11-13 September 2018.

Express interest now. Registrations close Friday 31 August 2018.

The event will be hosted as part of the 2018 South African Innovation Summit at the Cape Town Stadium.

Our focus? Developing brand new experiences for users of business innovation survey data within the National Science, Technology and Innovation Information Portal (NSTIIP).

“By working in new and creative ways with user communities such as firms, policy makers, media houses, and researchers, this effort represents a significant opportunity for CeSTII to widen participation in and deepen knowledge of the country’s innovation data, which is vital to a more innovative South Africa,” says CeSTII director, Dr Glenda Kruss.

Join a hackathon team, or join the audience

There are limited spaces for individuals to join a multidisciplinary hackathon team of six people per team, and to take part in a facilitated process including a technical briefing, hands-on team mentorship by experts, and a final pitch and judge session.

“NACI will incorporate the inputs from the multidisciplinary teams that are participating at this hackathon event to improve the user experiences of the NSTIIP and also for its upscaling,” says Dr Petrus Letaba, the NSTIIP’s project manager.

Download 2-page hackathon challenge and programme pdf

But there is also an option for interested parties to join the hackathon audience as ‘critical friends’.

“We know that businesses, industry associations, government policymakers, research institutions and the media all have a stake in a strong national innovation dataset,” says hackathon lead facilitator, Dr Pieter Van Heyningen.

“So we are also looking for a strong cohort of people from these groups to help us guide the teams, either as active mentors or as part of our hackathon audience for the opening and closing sessions.”

Says Van Heyningen: “This hackathon is in fact a rare chance for researchers, innovation managers, journalists, creatives, and web developers from diverse sectoral backgrounds, working in a fully catered for space, to rapidly expand their networks and collaboration capacities, while making innovation data work better for the user groups that need it most.”

Hackathon contacts

For more information or if you have questions, write to:

  • Gerard Ralphs, Centre for Science, Technology and Innovation Indicators, Human Sciences Research Council gralphs[at]hsrc.ac.za, 021 466 8000
  • Dr Petrus Letaba, National Advisory Council on Innovation, petrus.letaba[at]dst.gov.za
  • Dr Pieter Van Heyningen, SustNet, pieter@sustnet.com

Analysis | How South Africa’s services sector can help tackle poverty and inequality

About two thirds of South Africa’s GDP now consists of contributions from the services sector, which ranges from banks and insurance companies to tourism, hospitality and personal services. This means that policymakers, industry leaders, lobbyists and small business owners should all be concerned about the sector’s potential to fix the biggest challenges facing the South African economy – poverty and inequality.

File 20180529 80640 zcnx9n.jpg?ixlib=rb 1.1
[Image credit: Shutterstock]

Glenda Kruss, Human Sciences Research Council and Dr Moses Sithole, Human Sciences Research Council

About two thirds of South Africa’s GDP now consists of contributions from the services sector, which ranges from banks and insurance companies to tourism, hospitality and personal services. This means that policymakers, industry leaders, lobbyists and small business owners should all be concerned about the sector’s potential to fix the biggest challenges facing the South African economy – poverty and inequality.

For a long time commentators believed that an economy can only diversify and grow through following a model of industrialisation. But there’s a growing consensus that the services sector can contribute to economic transformation in emerging economies.

The South African services sector has traditionally involved low-tech activities. Examples include food, personal or legal services. These are limited to domestic markets which means that, for the most part, they can’t be traded or exported.

But recent technology developments have led to a raft of a modern and tradable set of service industries that are delivered digitally. These have popped up in different areas, like finance, transport, hospitality and information, communication and technology.

On top of this, technology has disrupted traditionally non-tradable service industries. Examples include Takealot.com, GetSmarter, and of course, Uber and Airbnb. All of them are models that show how technology and big data can lead to sectors being completely disrupted and overhauled, creating new types of enterprises and jobs.

Unfortunately, debates about changing South Africa’s economy usually ignore these developments and the role that innovation and technology can play in transforming the services sector.

Innovation in South Africa

Innovation refers to the introduction of a new good or service (product), a process, or a new organisational or marketing method. It can be new to the firm, the market or the world. Innovation in services has a strong human dimension, selling, marketing and delivery are critical, as well as close customer integration.

Using data collected by the Centre for Science, Technology and Innovation Indicators, which does surveys on behalf of the Department of Science and Technology, we pieced together an understanding of the innovation dynamics in the finance and the wholesale and retail sectors. These are the service sectors that contribute most to GDP.

We discovered trends that show there’s huge potential for innovation across the services sector.

Data from 2010-2012 suggests a healthy scale of innovation in South African services sector firms. This is particularly true, but isn’t confined to, financial services where one of the most prevalent innovations was in marketing.

We also found significant innovation trends in wholesale and retail, where a higher proportion of firms produced products that were new to the market.

The finance firms spent almost seven times more on innovation activities. Their innovation expenditure as a proportion of their turnover was likewise seven times greater.

Both sub-sectors received almost the same turnover from sales of new to the market products– around 17%. This suggests that there may be a greater return on innovation investment for the wholesale and retail firms, which spend less.

Comparing the two services sub-sectors also suggests that there are a variety of ways that innovations can be implemented.

Incremental innovation, through small improvements that build on one another, was more prevalent in the wholesale and retail firms. This took the form of training and investment in new machinery. Finance firms also spent on incremental innovation. But they were more likely to conduct R&D in-house.

All of these firms experience barriers to innovating on a large scale. The main ones were market uncertainty, competition and lack of qualified people. Firms that innovate in the two sub-sectors experience these barriers in different combinations and scales.

Potential impact

There is significant potential for globally competitive and local job-creating services firms that could help South Africa’s economy grow in different ways.

Haroon Bhorat, director of the Development Policy Unit at the University of Cape Town, and other academics argue that South Africa’s services sector needs to become more export orientated so that it can access larger global markets. This in turn, they argue, will drive structural transformation so that our economy does not over-rely on the traditional mining or agriculture sectors, and will grow local employment.

Currently, South Africa lags behind other emerging economies when it comes to expenditure on R&D and innovation. But a shift will require businesses to get involved in more innovation and knowledge intensive activities. These, in turn, need support from public funds.

The Department of Science and Technology is developing a new policy framework on science, technology and innovation. Current policy tends mostly to support R&D driven innovation, for example, through a tax incentive for expenditure on R&D. But there’s room for more interventions through incentives to support improvements in production systems, branding and marketing activities, as well as export promotion.

*Cheryl Moses, Hlamulo Makelane, Precious Mudavanhu and Gerard Ralphs contributed research and writing.

Glenda Kruss, Doctor, Human Sciences Research Council and Dr Moses Sithole, Chief Research Specialist: HSRC’s Centre for Science, Technology and Innovation Indicators, Human Sciences Research Council

This article was originally published on The Conversation. Read the original article.

 

Event | Coming up: Industry Associations Innovation Day 2018 – 25 May

InnovationDay_BannerImage_V1 [2160x1080px]
A collaboration of the Department of Science and Technology, and the Centre for Science, Technology and Innovation Indicators of the Human Sciences Research Council and Business Unity South Africa, the Industry Associations Innovation Day 2018 will take place at The Canvas Riversands, Fourways, on 25 May 2018.

The Industry Associations Innovation Day 2018 is envisaged to facilitate a dialogue between industry association leaders across the range of sectors, thought leaders, researchers, and government, as well as encounter case studies, on how some industry associations are tackling the innovation question with and for their membership.

Register now

The Canvas Riversands

Download one-page invitation you can share around*

On the agenda*

*Note: The agenda has been updated to include speakers from the National Business Initiative, Council for Scientific and Industrial Research and Information Technology Association of South Africa

REGISTRATION (08h30-09h00)

WELCOME: Joanne Yawitch, CEO: National Business Initiative

KEYNOTE: Innovation, government and Industry 4.0: South Africa’s policy visionImraan Patel, Deputy-Director General, Department of Science and Technology

THOUGHT LEADERSHIP PANEL: The trends we can’t afford to ignore anymore, and what businesses can do about them… Themba Maseko, Business Leadership South Africa (Moderator), Etienne Vlok, Southern African Clothing and Textile Workers UnionNonkululeko Shinga, Department of Trade and IndustryMike Colley, Institute for Futures Research

EVIDENCE PRESENTATION: How much R&D and innovation goes on in South Africa, and how we know this, Dr Glenda Kruss, Centre for Science, Technology and Innovation Indicators, Human Sciences Research Council

BREAK (10h45-11h00)

PRACTICE LEADERSHIP PANEL: What industry associations can do to support an innovation agendaHenra Mayer, Innocentrix (Moderator), Dr John Purchase, Agricultural Business ChamberBrenda Martin, South African Wind Energy AssociationPhilippa Rodseth, Manufacturing Circle, Sunil Geness, Information Technology Association of South Africa

INFORMATION PRESENTATION:

LUNCH AND NETWORKING (13h00-14h00)

Learn more?

Write to Gerard Ralphs gralphs[at]hsrc.ac.za, or call 021 466 8000.

Announcement | Ignition on SA Business Innovation Survey, 2014-2016

It’s been an intense but rewarding week for ‘Team BIS’ at the HSRC. We announced the rollout of our 2014-2016 survey fieldwork effort, attended the SA Innovation Summit, and talked and listened to loads of clever and committed people. Who knew doing large-scale quantitative research could be this, well, fun.

Moses
Dr Moses Sithole, BIS technical lead, interviewed by Activate radio on 6 September 2017 at the Cape Town Stadium. [Image credit: HSRC/CeSTII]

Ramping up

We’ll remember 5 September 2017 as the day we ramped up Business Innovation Survey 2014-2016, even though behind-the-scenes prep has been ongoing for much, much longer.

Director of the Centre for Science, Technology and Innovation Indicators , Dr Glenda Kruss, appeared on eNCA and SABC’s Morning Live, before briefing media at a bespoke event arranged at the HSRC.

We were also very lucky to have one of Africa and the world’s leading science journalists in the room, Linda Nordling, editor of *Research Africa, whose feature “Services industries in the crosshairs as SA launches innovation survey” (7 September 2017) delves into the history of innovation surveys in South Africa, and how the 2014-2016 round will differ from previous rounds.

See also article published in Engineering News and Business Report

Adding to the national conversation

When we designed the advocacy strategy for the South African Business Innovation Survey 2014-2016, we saw September 2017 as a month full of important opportunities to add our voice to a national conversation on innovation.

The SA Innovation Summit event, which ends tomorrow, and the SA Innovation Bridge event, which starts next Friday, are now both annual calendar events for South Africa.

They bring together a whole range of actors from the national system of innovation, and beyond, and both events are about making interaction possible within the system, and with other systems, too; to catalyse more innovation, faster.

In attending these events, we wanted to tell our story, but also listen to as many others’ as we can.

To these ends, the Summit which was held at the Cape Town Stadium’s conference venue certainly delivered great value for us.

Dr Moses Sithole spoke about innovation measurement and firm competitiveness on 7 September and we also listened to the innovation stories of companies, like Skeg, who develop product prototypes for all industries, and of entrepreneurs, like the climate-savvy Vicky Shabangu, who is trying to develop a waste management business in Mpumalanga, from scratch.

A few buzz words characterised the discourse on display at the Summit, like ‘disruption’, ‘crytocurrencies’, ‘big data’, ‘systems thinking’, ‘innovation districts’, ‘knowledge regions’, ‘co-creation’, ‘edtech’, ‘fintech’, and so on.

Powerful messages

The Summit was full of powerful messages for innovators big, small or just starting up. The value of networking, exchange, spaces and places, and information were talked up. So was the extremely powerful role of data, digital and disruption in shaping how the economies (and societies) of the future will operate.

For the South African Business Innovation Survey 2014-2016, the take-home messages were equally strong: we need a strong evidence base, rooted in the realities of firms across different industrial, services and informal sectors of the economy, to help with the shaping of responsive policy.

CE.JPG
Visual artist James Durno worked with Kgomotso Matlapeng (Department of Science and Technology) and Gerard Ralphs (Team BIS) on 7 September to co-create this image of the relationship between BIS data and policy. [Image credit: HSRC/CeSTII]

FAQ | SA Business Innovation Survey, 2014-2016

*Fieldwork for SA Business Innovation Survey 2014 – 2016 ended on 30 November 2018. 

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*You can also download these FAQ

What is the purpose of the Business Innovation Survey?

Commissioned by the Department of Science and Technology, and performed by the Human Sciences Research Council, the Business Innovation Survey aims to deliver an internationally comparable report on innovation activities in key sectors of the South African economy. Survey results will play a vital role in policymaking for technology, innovation, and economic development.

Which companies have been selected to participate in this round of the Survey?

Statistics South Africa has drawn a random sample of 5,000 firms from the business register in line with its agreement on official national statistics with the Department of Science and Technology. The sample consists of a variety of businesses, ranging from very small to very large firms that operate in key industrial and services sectors. Sub-sectors covered by the survey include: financial intermediation; research and development; wholesale and retail trade; manufacturing; architectural and engineering activities; technical testing and analysis; computer and related activities; mining and quarrying; electricity, gas and water supply.

What will businesses gain from participating in the Survey?

A source of business intelligence, the Survey’s results can be used to benchmark a company’s innovation activities against other enterprises in its sector, both nationally and internationally. An added benefit of participation is the opportunity it presents for an internal review of potential business development areas that might not otherwise be explored.

What does South Africa gain from businesses participating in the Survey?

National business innovation surveys provide an essential source of data for evidence-informed policymaking. In addition, the 2014-2016 survey round is being undertaken so that results are internationally comparable.

How will Survey respondent company data be managed?

Questionnaires are stored in secure rooms and captured data is stored on secure servers at the Human Sciences Research Council premises in Cape Town, South Africa. All staff who work on the survey have signed strict agreements on the confidentiality of the data. Your company’s details and firm-level data will not be shared with any third party.

What are the different types of innovation the Survey measures?

The South African Business Innovation Survey recognises four types of innovation in firms: 1. Product innovation (including both goods and/or services); 2. Process innovation; 3. Organisational innovation; 4. Marketing innovation. This section of the FAQ provides detailed explanations and examples of each, as well as examples of what would not be considered an innovation in each category.

What makes a product or business activity an “innovation”?

Most people picture an invention new to the world when they think of innovation. In fact, two criteria are important in defining an innovation: 1. Does the product or activity represent significant change or improvement? AND/OR 2. Is the activity or product new to the firm? If the change meets either or both of these criteria, it can be considered an innovation. While a given change could be an innovation for one firm, the same change may not be an innovation for another firm. In answering the Business Innovation Survey, each firm has to decide for itself whether a particular change is new to the firm and/or whether the product, process or service has significantly improved.

When does an innovation belong to an enterprise?

1. If an enterprise has internally developed and implemented its own significant changes.

2. If the enterprise has significantly improved or modified its existing products, processes, services, methods or delivery processes, either by internal development or by introducing a new idea from external sources.

3. If an enterprise has implemented a new or significantly improved change, which may have originated elsewhere, such as the head office or a subsidiary company, another company, sector or country.

What is a firm’s “innovation expenditure”?

Innovation expenditure is the amount of expenditure committed to innovation, including current expenditure (personnel, for example) and capital expenditure (for example, buildings or equipment). For the 2014-2016 round of the Survey, we request that respondents provide: 1. turnover data for two years, and 2. expenditure data for one year. If these data are not available to respondents when completing the questionnaire, we ask that estimates are provided. We also remind you that all firm-level data provided in this section of the questionnaire are kept strictly confidential and are not made public in any way.

What is a product innovation?

Product innovation relates to both goods and services. When a good or service is introduced to the firm and is new to that firm OR shows significant improvement with respect to the capabilities or planned uses, then the change represents a product innovation. A product innovation may include significant changes in technical specifications, components and materials, incorporated software, user experience, or other functional characteristics of the good or service.

Examples of product innovations that relate to goods and services in the industrial and services sectors

SERVICES SECTOR

  • Ticket automation for cash or pay card (e.g. parking systems)
  • New point of sale systems (e.g. scanner cash box)
  • Customised business software (e.g. anti-fraud software that profiles and tracks individual transactions)
  • New multimedia applications (e.g. tablet)
  • New smartphone apps
  • New logistics services
  • Dial in services (e.g. goods delivery)
  • New or significantly improved insurance services (e.g. gap cover)
  • Remote software maintenance
  • Direct clearance with hospitals

INDUSTRIAL SECTOR

  • Inclusion of eco-friendly products in product ranges
  • Introduction of client or loyalty cards
  • Changes to materials e.g. breathable textiles
  • New types of paper for specific printers
  • Improved purity of final mining product
  • Automated tunnel borers
  • Autonomous mine site infrastructure
  • Online sales or direct sales to end-users
  • New kinds of product certification services
  • Combining solutions, such as technical and consulting services
  • Introduction of extended warranties on new or used products
  • Remote software maintenance
  • New information technology applications for client servicing

What is a process innovation?

A process innovation relates to improvements in production methods, delivery methods or distribution methods. For these process improvements to be considered innovations, they must be new to the firm OR significantly improved. These significant changes include those that relate to specific techniques, equipment and/or software, changes that are intended to improve the quality, efficiency or flexibility of a production or supply activity or logistics, or changes that reduce environmental or safety hazards.

Examples of process innovations by sector

SERVICES SECTOR

  • New online banking modules
  • Improved premium clearing systems
  • Electronic Data Interchange
  • CASE tools for customer-specific hardware
  • Introduction of software to identify optimal delivery routes
  • New or improved software or routines for purchasing, accounting or maintenance systems

INDUSTRIAL SECTOR

  • Robotics
  • Digital printing processes
  • Automated packaging
  • Computerised equipment for quality control of production
  • Mapping by drone
  • Smart boreholes
  • Smart volts and vents
  • Installation of automated trucks and drill rigs

What is NOT considered a process innovation?

An increase in production or service capabilities through the addition of manufacturing or logistical systems that are similar to those already in use.

What is an organisational innovation?

An organisational innovation is intended to significantly improve the firm’s innovative capacity or performance characteristics. This can encompass significant changes in workplace organisation, business practices or external relations implemented in the firm.

Examples of organisational innovations

  • A reduction in the number of management levels to create greater flexibility in decision-making.
  • Integrated monitoring system for firm activities (e.g. production, finance, strategy or marketing).
  • The introduction of an organisational division to support new product development in a specific area

What is NOT considered an organisational innovation?

Changes in management strategy not linked to significant organisational change.
Introduction of new technology that has limited benefits or is restricted to a small division of the firm.

What is a marketing innovation?

The implementation of a significant change in sales and marketing methods would qualify as marketing innovation. “Significant” would include improved product appearance and packaging that is intended to increase product appeal and/or consumer awareness.

Examples of marketing innovation

  • Bundling existing goods or services in new ways to appeal to market segments.
  • Design of new consumer products (e.g. custom appliances).

What is NOT considered a marketing innovation?

  • Routine or seasonal changes.
  • Minor updates in the appearance of packaging.
  • Advertising, unless based on the use of new media or a new advertising technique.

More questions?

Write to innovation@hsrc.ac.za