The local economic outlook remains challenging. To stimulate and grow the economy, greater entrepreneurship and a new approach to innovation are needed. Digitalisation offers us that opportunity, writes WILLIAM MZIMBA.
In South Africa, there are some tough economic challenges ahead. Unemployment remains high and rating agencies believe that a downgrade of the country’s credit ratings to junk status is still possible at the end of the year. Open innovation through ecosystem expansion could help turn the tide. The evolving digital business environment and business models, supported by new digital technologies, make new and deeper forms of collaboration possible – and greater digital collaboration increasingly correlates with better business and economic performance.
Accenture’s Digital Collaboration Index indicates that digital collaboration can deliver an uplift of $1.5 trillion to global economic outputs. In South Africa, it could raise GDP by almost $12 billion, elevating current GDP by 3.1 percent. So how do we achieve this?
As digital blurs boundaries between industry sectors, lowers barriers to entry and creates bridges, new ecosystems of partners from different industry sectors are forming around the customer, offering them not just products but innovative solutions and ‘experiences’. Many of these partnerships are built on a new form of innovation: open innovation.
What is open innovation?
Open innovation goes beyond narrow-focus first stage innovation such as corporate ventures, incubators and accelerators. It is a more open, equitable form of collaboration involving multiple partners who work together to jointly develop new platforms and applications, enhance core offerings or expand into new markets.
This model provides a catalyst, and the momentum for rapid innovation and growth. It helps enterprises harness the power of entrepreneurs and innovators to bring new ideas, technology and talent into their businesses; and helps start-ups leverage the strengths of bigger players to bring solutions to market and scale up faster.
Accenture has taken this very model and implemented it throughout the company to work with top-tier accelerators, start-ups, venture capitalists, universities and the company’s corporate R&D labs to build and bring to market innovative solutions. Through this connected network Accenture Open Innovation has fuelled new opportunities and growth for pioneering clients.
It’s also a model that has an important role to play specifically in South Africa.
Digital technologies, products and services will play a significant role in revenue generation for South African companies, accounting for almost one-third of total revenues in the next three years. Yet South African companies have been slow to exploit the potential of digital to increase collaboration and innovation – the new platform models that characterise digital age business remain rare and the majority of companies still focus on early-stage innovation models.
The journey to open and ecosystem innovation?
In South Africa, a foundation to facilitate digitally based innovation needs to be built and that foundation needs to extend beyond technology. This will require a mindset change and the establishment of an enterprise framework to facilitate what Accenture terms “guided disruption”.
To put the fundamentals in place for open innovation, companies should:
· Discover: Explore the “art of the possible” and identify potential ecosystem partners, technologies and opportunities that align to clearly defined business goals
· Build the foundation: foster a culture of open innovation and back it with investment, leadership support, incentives and business tools and programmes that facilitate greater external collaboration.
· Develop a bridge: collaborate with people and organisations that can act as a gateway to innovation ecosystems. Organisations and businesses who recognise the power of these connection points will prove instrumental partners.
· Develop and deploy: co-innovation among multiple partners minimises internal investment, allowing for rapid prototyping but the deployment of solutions at scale in a digital ecosystem can be challenging – build the foundation to support this using best practices.
The journey to open innovation will not be easy but, if we get it right, it will enable South African companies to leapfrog the evolutionary stages of innovation to significant advantage. This can bring about an uptick in South Africa’s economic growth and a step change in problem resolution.
* William Mzimba, Chief Executive South and Sub-Saharan Africa at Accenture