Technology

Innovation in SA organisations driven by C-level support, new report finds

USB News

Innovation in SA organisations driven by C-level support, new report finds

  • FEB 15 2019
  • Tags Innovation, management, sustainability, growth, report, strategies

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Turf wars, office politics, lack of alignment and budget pressures the dominant innovation obstacles in South Africa.

South African business leaders are putting innovation front and centre in their organisational strategies to help drive sustainable growth. This was one of the key findings in a new pilot study tracking South African public and private sector organisations’ innovation management capabilities.

“Despite the rapidly growing knowledge base, managers in Southern Africa require knowledge, skills and attitudes to deal with our challenges and context.”

The State of Innovation Report 2018 – 2019 was conducted by the Creative Leadership Collective, a consortium of executives and senior managers tasked with driving innovation within South African organisations, and the University of Stellenbosch Business School (USB). Paul Steenkamp, co-founder of the Creative Leadership Collective and co-author of the study, says the current trend toward prioritising innovation comes at a critical time in the country’s history.

“To solve the problems we face as a country and continent, we can’t afford to do the wrong things right from an innovation perspective. We need to think and act differently, and leaders need to create a more empowering culture within their organisation. Encouragingly, South African public and private sector organisations have taken note: management commitment and support for innovation is perceived to be on the up.”

SA businesses prioritising innovation despite lower maturity rates

The State of Innovation Report 2018 – 2019 includes five stages of innovation maturity, ranging from 1 (ad hoc innovation with no formal focus or follow-through) to 5 (optimised innovation that is scalable, driven by empowered employees).

“To solve the problems we face as a country and continent, we can’t afford to do the wrong things right from an innovation perspective. We need to think and act differently, and leaders need to create a more empowering culture within their organisation.”

”Our research found that none of the participating South African organisations were at stage 5, and only 8% were stage 4,” says Steenkamp. “Nearly 80% of South African firms are either at the Emerging or Defined stages of innovation, where there is some awareness and effort, or some degree of formalised strategic programmes linked to customer or business objectives. This is consistent with global trends: in the 2018 Benchmarking Innovation Impact Report, nearly 60% of global respondents placed themselves in the first two categories. Only 4.1% believed they had reached the highest stage of innovation maturity.”

“An organisation’s capacity to manage innovation tends to improve over time, but only when there is clear leadership to manage specific issues limiting innovation at the various stages of maturity,” says Steenkamp.

Measuring innovation

The report uncovered the key metrics that participating South African organisations currently apply to measure the success of their innovation efforts. “Customer-related metrics emerged as the most important measure for South African innovation success. Two-thirds said they measure innovation by the growth in number of new customers buying their product or increasing the number of customers repeatedly using their products or services.

According to a Walker study, customer experience will overtake price and product as the key brand differentiator by 2020. “However, in the public sector, innovation priorities relate more closely to enabling public sector organisations to be better prepared for future challenges around food security, health, and water,” says Steenkamp.

Improved collaboration, skills transfer

The United Nations Conference on Trade and Development (UNCTAD) notes in its Technology and Innovation Report 2018: Harnessing Frontier Technologies for Sustainable Development the importance of skills and education in taking advantage of so-called frontier technologies: artificial intelligence, Internet of Things and other emerging technologies that are driving much of the advances in the digital economy. “Organisations that are open to the learning process outperform those that are not. However, our research found a lack of collaboration between the private sector and institutions of higher learning,” says Steenkamp.

Study co-author Dr Awie Vlok of the USB said most managers would like to improve their innovation performance but lack the knowledge and skills to do this.

“Studies on innovation and leadership are not new but research on the competencies of leaders to bring about innovation is still new. Innovation thought leader, Prof Clayton Christensen from Harvard Business School, only referred to innovation as the new science of success in 2002 and in 2004 the McGraw-Hill group introduced the notion of the Innovation Economy. Scholarly interest has since increased, while popular media feature innovation celebrities and their perspectives.”

Despite the rapidly growing knowledge base, managers in Southern Africa require knowledge, skills and attitudes to deal with our challenges and context. This report conveys important insights into the views of those taking part in the survey, and future surveys will expand on these.”

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Harnessing the power of the 4th Industrial Revolution

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Harnessing the power of the 4th Industrial Revolution

  • FEB 21
  • Tags Leadership, Digital

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Thought leadership article by Mark Phillips, USB MBA Alumnus

Growth is a key issue of our times. In the 20th century, the world benefitted from unparalleled economic growth. The economic prosperity and activity was largely driven by rising debt levels, favourable demographics and profligate use of scarce resources. Today, the backdrop to our uncertain economic future is set with fragile and complex economic conditions that are now sometimes a silent background to all debates. A decade later, the official response to the global financial crisis was a policy of devising deferral strategies based on the assumption that government spending, low interest rates, and the supply of liquidity to money markets would create and foster economic growth. In 2018, inflation for the most part remains stubbornly low and conditions in the real economy have not returned to normal.

Over the past two decades, some of the world’s fastest-growing countries were from Africa. The commodities boom is partly responsible alongside favourable demographic patterns. But the growth also has a lot to do with the manufacturing and service economies that African countries are beginning to develop. The big question is whether Africa can keep that up if demand for commodities drops. For a look at the boom in Africa and the 1.2 billion rising middle class opportunity, do so as multitude of foreign investors have done and fly into Abidjan, the capital of the Ivory Coast. Visitors arrive in an air conditioned hall where a French style café sells beers, snacks and magazines. There is advertising everywhere and the taxi into the city smoothly crosses over a six lane toll bridge. Yet just years ago, the Ivory Coast seemed like a lost cause.

Over the past two decades, some of the world’s fastest-growing countries were from Africa. The big question is whether Africa can keep that up if demand for commodities drops.

Many believe that fortune favours the brave. When it comes to investing in Africa, this saying holds true. The irony of investing in Africa is that it is both one of the world’s most difficult regions in which to do business and also perhaps it is most entrepreneurial. In no other part of the world does such a large share of the population rely on their wits and their trading abilities to get by. However, a successful industrialisation programme requires many things that Africa still lacks. Many believe that manufacturing in Africa is only for the brave. In Nigeria it makes up about 10% of GDP. In South Africa, it accounts for 13% of GDP, down from 20% in 1990. In comparison, in Thailand the equivalent figure is 28%. Furthermore, Africa’s inter-trade suffers from dismal infrastructure and corruption. This lack of internal trade explains why Africa remains poor, and why it has failed to create big firms that straddle national boundaries.

South Africa seems well placed to invest elsewhere on the continent. As an example, the private sector has access to capital, infrastructure and skilled labour, but a substantial chunk of the population are as poor as any Africans. South Africa is a country of so many contrasts it is perfectly possible to create a convincing portrait of success and prosperity since 1994. Unfortunately, it is equally possible to create a negative portrait of a country in trouble. Ben Turok explains that the country’s present condition is marked by several factors that manifests itself in a lopsided economy vis-à-vis a relatively small tax base, state employment being critical for development, and the state being an enabler for development yet corruption is widespread. Furthermore, as Ralph Mathekga highlights, after two decades of democracy, the patience for South Africa’s persistent inequality is wearing dangerously thin.

The 4th Industrial Revolution is not just about technology and business. It’s about society. Its scope, speed and reach are unprecedented. To some extent, society is now writing the code that will shape our collective future.

The structure of the economy still excludes the majority of the population from key production areas. In order to unlock this country’s potential requires capacity to ensure that programmes and initiatives are well monitored and not hijacked by interest groups. The World Economic Forum asserts that world is changing and companies must adapt. The 4th Industrial Revolution will eliminate millions of jobs and create millions of new ones. This phenomenon is the manifestation of a broader technological trend: the internet is entering the spaces we live in, and is becoming the internet of things. As a result, many aspects of urban life are being rapidly transformed – from energy to waste management, from mobility to water distribution, from city planning to citizen management. In times ahead, the revolution is the greatest transformation human civilisation has ever known. The process is transforming practically every human activity – the way we make things, the way we use the resources of our planet, the way we communicate and interact with each other as humans, the way we learn, the way we work, the way we govern, and the way we do business.

The 4th Industrial Revolution is not just about technology and business. It’s about society. Its scope, speed and reach are unprecedented. To some extent, society is now writing the code that will shape our collective future. The forces of change will result in the seamless integration of the virtual and the physical worlds that is the giant leap seen today. Also, as cities are changing quickly and we are in the midst of rapid urbanisation, the concept of smart cities is emerging. The ray of light is that the 4th Industrial Revolution will bring about very substantial changes to the social base. However, striving for inclusive growth is about the disruptive and revolutionary role of technology. Therefore, what can we do to make sure as many citizens as possible benefit from the 4th Industrial Revolution? And, how could this paradigm ultimately play a role in the development of developing economies like South Africa, and across the African continent?

Carlo Ratti identifies key trends that could usher in a new era of urbanisation across Africa – data collection for social change, mobility and traffic congestion, innovation anywhere, infrastructural shortages, the sharing economy, and the ethical economy. Subsequently, across the continent there is a potential gold mine of knowledge skills and business networks that if mobilised, could solve many of the continents current challenges. We can learn from the past and lay the conceptual foundation for an inclusive society. One may envision an open society that aims to unite the principle of the free market with that of fair distribution of prosperity. This vision is more important today than ever before because it points out the way to an inclusive form of capitalism and to a sustainable model for economic and social well-being. They key is that the business of business should not just be business. Shareholder value alone should not be the yardstick. Instead, we should make stakeholder value, or better yet, social value, the benchmark for private and public sector performance.

Leaders in both private and public sector will have to come to grips with the 4th Industrial Revolution, which is redefining entire industries. As the past few years has demonstrated, leaders must be responsive to the demands of the people who have entrusted them to lead, while also providing a vision and a way forward, so that people can imagine a better future. The 4th Industrial Revolution presents the opportunity of ‘reshoring’ by bringing production closer to the consumer. This could improve the chances of industrialisation in developing economies. South Africa has a unique opportunity to look at new technologies with a view to the niches we can occupy, the benefits we can by job creation and at how to minimise the negative impacts. Joe Kaeser explains that the 4th Industrial Revolution runs on knowledge and we need a robust concurrent revolution in training and education. Here, both government and business must join forces to provide workers with the skills and qualifications they need to participate in the digital and smart economy.

The process of technological innovation, including the growth of crypto-currencies, are rapidly reshaping some of the core functions of policy and strategy direction. In the complex and ever-changing environment there must be no place for defensive postures. Vishnu Padayachee and Bradley Boris argue that in a changing world, conventional notions of policy and strategy are, and of what they should do, face a number of challenges. The World Economic Forum identifies key challenges – coming to grips with the use and potential of technologies, building a dynamic and inclusive multi-stakeholder governance system, restoring global growth, and reforming market capitalism by restoring the compact between business, government, and society. Therefore, the debate and collective action by both public and private sectors must be guided by one overriding objective to improve the quality of life of the many South Africans who need the impact of positive change on employment, investment, and growth.

Mondli Hlatshwayo explains the decline in industries and the implementation of technologies that lead to retrenchments, unemployment and poverty require a multi-faceted response and not only the social and economic strategies. There is a need for progressive public-private partnerships to consider collective responses where declining industries present opportunities in the 4th Industrial Revolution. Consequently, we face challenges in terms of food and water security, climate change, energy, demographic shifts, healthcare, financial health, education, skills and technology. Of course there are also global scarcity, geopolitics, conflict, and the issue of quality of life. Therefore as leaders in both public and private sectors, we must provide visionary leadership and creative solutions suited to the context. We need the ability to embrace emergent technologies that support productivity and to be able to leverage connectivity and collaboration to open up possibility. All this requires shared meaning and purpose, social cohesion, and a strong culture passionate about improving the lives of future generations.

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SA will lose 5.7 million jobs if not digitally ready in 7 years

USB News

SA will lose 5.7 million jobs if not digitally ready in 7 years

  • APR 21
  • Tags Technology, Business, News, University

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With 35 percent of all jobs in South Africa (almost 5.7 million jobs) currently being at risk of total digital automation within a mere 7 years,  the country could see a crippling effect compounded by a fragile economy and growing unemployment.

Dr Roze Phillips, Postgraduate Diploma in Futures Studies alumnus from USB and Managing Director for Accenture Consulting in Africa says that the country needs to act now to ensure that humans and machines can work together in the future. Dr Philips presented a Leader’s Angle on Monday, 16 April.

“Our research shows that if South Africa can double the pace at which its workforce acquires skills relevant for human-machine collaboration, it can reduce the number of jobs at risk from 3.5 million (20%) in 2025 to just 2.5 million.”

“With the threat of automation growing, South Africa is less prepared than other countries and needs to give its workforce skills to participate in the digital economy. In a country with a staggering 27.7% unemployment and jobless youths making up 75% of unemployment, the future looks bleak.”

Dr Phillips says job transition is not new. In the pursuit of higher productivity at lower cost options, jobs have for many years been shed.

“In recent times, many manufacturing and standard business process intensive jobs were outsourced to countries where labour was cheaper. Those jobs rarely made it back to home soil but at least outsource recipient countries benefitted from the employment opportunities created there. Today, the same phenomenon occurs. But now, the search for labour arbitrage is no longer between physical geographies; today, jobs are lost to the digital world and will, in all probability, never be done by humans again.”

She says that in a country like South Africa where poverty remains, rates of unemployment are high and social security questionable, it’s vital for the country to upskill its people to collaborate with machines to enhance their own productivity, not job losses.

“Machines do not consume things and whilst they can replace human work, they do not drive purchasing behaviour or contribute to GDP. Society will regress if humans can’t work, earn and spend. South Africa needs to learn how to ‘run with machines’.”

Which jobs in South Africa are the most at risk?

Book keeping, accounting and auditing clerks have the highest risk of automation says Dr Phillips. It’s not just manual labour jobs.

Her company Accenture researched various job categories drawn from Stats SA to gain insight into human-like (analytical, leadership, social intelligence, creative) and machine-like activities (routine work, transactions, manual labour) taking into account the type of work, skills and tasks, the recent skills evolution in jobs, degree of work automation, work supply demographics and productive structure.

drrozephillips

“The results clearly show that occupations that allocate more time to human-like activities have a lower probability of automation while workers involved in occupations such as production, office administration, tellers, cashiers, farming, food preparation, accounting, auditing, insurance claims and policing processing clerks, construction, mining, transportation, installation and maintenance are at highest risk.”

Both white- and blue-collar jobs are at risk. The more predictable and repetitive the activities that make up the tasks, the more likely it is to be replicated by machines or automated. The safest jobs are those that require influencing and advising people, teaching, programming, real-time discussions, negotiating and cooperating with co-workers.

Dr Phillips says that although the research seems to paint a gloomy picture, the opportunity for South Africa is considerable.

“Digital technology will usher in a new economic era, exposing new sources of value and growth, increasing efficiency and driving competitiveness. For South Africa to rise to the challenge the country needs to recalibrate its economy and its workforce for digital, creating entirely new products, services and markets. And the time to do that is now.”

What leaders need to do today for tomorrow

Leaders will have the opportunity to reshape their organisations and society at large for the better if they accelerate reskilling people. But it needs to happen at an accelerated speed.

Prioritize skills for development

Selecting skills training will depend on the type of machine intelligence automation being used, as well as the size, sector and existing skills levels of an organisation. Accenture has developed a guideline which organisations can access to assist them in this process.

Reskill at the top of the house

Businesses need new leadership skills to lead that are responsive, responsible and response-able. By engaging with employees and stakeholders, cross-collaboration with other industry experts such as academics, businesses and create learning opportunities for their staff to seamlessly join them on the journey.

Keep building on what you have

Rapid reskilling can ensure that you keep your workforce but constantly change the way they do their jobs with innovative learning methods, enhancing digital capabilities to meet the challenging expectations of clients, service delivery and production.

Change the mindset of ‘learning as a way of life’

Shifting from point-specific training to lifelong learning makes workers and organisations nimbler and organisations more adaptable to volatile markets.

Use digital to learn digital

Digital learning methods such as virtual reality and augmented reality technology can provide realistic simulations to help workers master new tasks so they can work with smart machinery. The same technology can be used to help reinforce correct procedures on the shop floor, monitoring how employees execute tasks and coaching them to do it the best way.

Create a more flexible workforce model

Rigid, formal job structures do not support the speed and agility demands needed in the face of digital innovation. Redefining and co-creating employment opportunities through more responsive role-based and gig-like work is a reality. These opportunities need to be available to both full-timers and freelancers.

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