Innovation happens in a systemic context


I am preparing to conduct a 2 day training on diagnosing innovation systems. The participants will be mainly from universities, but there will be also some senior government officials responsible for promoting industrialization and R & D.

I already know what some practitioners will ask me. They will ask “why bother with an abstract concept like an innovation system if we can directly help enterprises to innovate?”

This is not a trivial question. Practitioners from universities that assist enterprises to develop new products, solve problems, conduct research or improve processes have direct evidence that their services are contributing to better results, new products, new markets; in other words, they are directly facilitating innovation.

However, helping one firm at a time is costly, and takes up time. While this kind of 1-on-1 support is necessary, it is not sufficient. Innovation is only to a small extent the result of isolated actions by producers and their technological intermediaries that support them. We need to recognize that there are many other facts that makes it more likely that whole industries, countries or regions will be competitive because they are innovative.

For industries, countries and regions to innovate, a more systemic approach is needed. It must be recognized that innovation rests on:

1. The interaction between companies, which include interaction with:

  • input suppliers,
  • equipment manufacturers,
  • competitors,
  • joint ventures,
  • alliances; and
  • demanding and sophisticated customers

2. The interaction between companies and their supporting institutions:

  • Education institution and training providers that are not only responsive, but creating the skills needed for tomorrow
  • technology extension that reduces the cost of experimentation and that overcomes high costs,
  • knowledge intensive business services and technical consulting services that adds value
  • Research and Development institutions and specialists that are accessible,

3. The framework conditions that determine:

  • the incentive to innovate (which is often related to the pressure by others to compete and try harder)
  • the direction of technical change
  • the overall market conditions domestically

4. The ability to leverage unique regional demand or sophisticated demand to create innovation eco systems

In Africa, we have to focus on using the unique regional demands placed on our industries, our products and our innovation systems. We have to use these unique demands to create supporting institutions, creative firms and specific products that responds to these needs. Because our domestic volumes are often low, we have to focus on making sure that we can better integrate different disciplines, technologies and knowledge bases. This will require much more than innovative products and innovative processes, but will demand that we also create innovative business models.

Conclusion

We have many examples of entrepreneurs who have (despite some very demanding local conditions) managed to create innovative products and processes that have been successful globally. The question we are trying to ask with an innovation systems approach is “how do we increase the chances of our innovators to be successful by creating a dynamic system around the entrepreneurs?”. We recognize that a creative entrepreneur or technologist is not enough to create a new momentum. The whole system around these entrepreneurs need to be dynamic and innovative in itself.

When we get institutions, experts and policies around entrepreneurs to be more innovative, we will immediately see results at the levels of firms, industries and regions.

10 Responses to “Innovation happens in a systemic context”

  1. Larry Dolley Says:

    Started a modes blog: http://www.cput.ac.za/blogs/ats. Will spread wings later and fly! Will quote this blog of yours:-) Food Innovation Symposium 2 planning in progress.

    Like

    • Dr Shawn Cunningham Says:

      Dear Larry,
      I will be happy to again contribute to your food innovation symposium either as a presenter or moderator!

      Keep up the good work of stirring the innovation system in the food sector.

      Best wishes,

      Shawn Cunningham

      Like

  2. Natasha Walker Says:

    Excellent article. Do you think that the “demanding local conditions” you mention may also be conducive to innovation? We innovate when the preasure’s up? Otherwise I’m totally with you and hope that it’s also possible to innovate under less demanding conditions.

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    • Dr Shawn Cunningham Says:

      Hi Natasha, thanks for reading and thanks even more for responding. What I mean with demanding local conditions is that our environment typically creates demands, and if we can respond to those then we could develop an unique innovative position. For instance, in South Africa we have very different local demands say from Germany. So can we leverage those local demands to our advantage?

      Yes, we can innovate when competition is low or even without demanding local customers. But this is the odd exception in the developing world. Here pro active innovation is scarce, because the system around enterprises does not look out for enterprises.

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  3. Tim Says:

    Good post Shawn. I agree that this is a critical question to ask – 1-1 is too slow, and we do have opportunities to have an impact at regional levels. I think that it’s essential that we put in the effort to do so.

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  4. Jordi Robert-Ribes Says:

    Great post, thanks!
    For companies bigger than 20 people, it is also very important the interaction between the people or departments within the company.
    There needs to be a framework that enables trust to be build between very different people and very different departments. See for instance: http://jordirobertribes.com/blog02

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    • Dr Shawn Cunningham Says:

      Hi Jordi,
      Thank you for your post and for your link. In my original post I was trying to emphasize the coordination that is required beyond the firm, that to some degree is also difficult for firms or industries to do without public sector support. However, within firms the innovation system can suffer from the same coordination failures. A key difference is that within firms people often have a medium (like a technical language and consistent terminology), while between firms and other institutions this lack of a common language often increases coordination costs.

      Best wishes,

      Shawn

      Like

  5. Adrie Says:

    Hi Shawn, such a pity that government feels most comfortable with support to industry on a one firm at a time basis but very understandable since it is so much easier to measure and report at Micro level. Unfortunately for an innovation system to improve you need interaction and change on all four determinants of the Systemic Competitiveness Framework. You need a shift in behavior, thinking and way of interaction (which is rooted in the Meta Level) Innovation happens where you engage the various role-players (especially those thinking different from you) as you have so rightly described in your blog and it is just something someone showed you, told you or confronted you about that makes you do things differently. So innovation is non-existent if you keep to people that think like you or a company that “believes” they have all the answers. Difficulty is how do we help government to measure change/improvement on an innovation system level?

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  6. Liza Van Der Merwe Says:

    A lot of what you mention is ‘hard’ stuff. I think the real challenge is in the ‘soft’ stuff. Behaviour is supported by values supported by beliefs supported by a deep seated worldview. This crux is what determines your attitude, your culture, your values. In our company we have a process and a system for innovation (not same context in which you are using the wider system word Shawn) but the mind-set of executing a standardised process (even an innovation process) can still be a straight jacket. To have a pervasive innovation system you have to foster & nurture the worldview that values it as a driver ☺

    Liza van der Merwe Enterprise Resilience Assessment Manager

    ESKOM HOLDING SOC LIMITED Reg No 2002/015527/06 Strategy & Risk Management Division, Risk & Resilience Business Unit

    Like

    • Adrie Says:

      Hi Lisa
      It is exactly the “soft stuff”…..if we can call it that that are lying on the Meta Level of the Systemic Competitiveness framework. Unless the culture/mindset etc. of a nation/industry changes we revert back to assisting one company at a time thinking that will make an impact. Have you seen the Systemic Competitiveness Framework?

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