Transcript BlueIQ Economic Strategy Review

Gauteng Innovation Strategy
20 April 2010
Normal Person
Scientist
2
Table of Contents
 INTRODUCTION
 OUR UNDERSTANDING OF INNOVATION
 STRATEGIC AND POLICY OBJECTIVES
 INTERVENTION MECHANISMS
 WAY FORWARD
3
Table of Contents
 INTRODUCTION
 OUR UNDERSTANDING OF INNOVATION
 STRATEGIC AND POLICY OBJECTIVES
 INTERVENTION MECHANISMS
 WAY FORWARD
4
Innovation is the means by which we are able to do more, with
less
A useful metaphor in an economy is in the kitchen. To create valuable final products, we
mix inexpensive ingredients together according to a recipe. The cooking one can do is
limited by the supply of ingredients, and most cooking in the economy produces
undesirable side-effects.
If economic growth could be achieved only by doing more and more of the same kind of
cooking, we would eventually run out of raw materials and suffer from unacceptable levels
of pollution and nuisance.
Human history teaches us, however, that economic growth springs from better recipes,
not just from more cooking.
Paul Romer
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Table of Contents
 INTRODUCTION
 OUR UNDERSTANDING OF INNOVATION
 STRATEGIC AND POLICY OBJECTIVES
 INTERVENTION MECHANISMS
 WAY FORWARD
6
Innovation must be thought of as wider than just technology and science
Economic Innovations are “traditional”
innovations; they revolve around product,
process and marketing of goods and
services. Economic innovation address the
needs of the market, satisfies the demands
of consumers.
Economic
Innovation
TOTAL
INNOVATION
Social
Innovation
Social Innovations solve “non-market”
problems such as employment, safety and
security, delivery of healthcare – basically all
of those “social goods” which the market
generally does not get involved in; they
satisfy the demands of citizens
Public
Innovation
Public sector innovation addresses the
needs of government; this is different from
the needs of the citizen. It also faces unique
challenges because of the fiduciary
responsibility of government in spending
public funds on inherently risky projects
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Open Innovation brings together each member of society to
create commonly owned solutions
Scientists
Technicians
Researchers
Laboratories
INNOVATORS
Closed
FEEDBACK
GROUP
Open
Small group of experts
and little collaboration
Massive community
involvement
Restricted access to
IP
Free flow of
information and
knowledge
Slow development
process
Very fast evolution
Assumes the ‘experts’
know what is needed
The community itself
defines what it wants
SOCIETY
Challenges
SOCIETY
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Table of Contents
 INTRODUCTION
 OUR UNDERSTANDING OF INNOVATION
 STRATEGIC AND POLICY OBJECTIVES
 INTERVENTION MECHANISMS
 WAY FORWARD
9
What are the challenges that we need to address?
Innovation ≠ Science
 The concept – and support – of innovation must also include social and public innovations
Society is not a passive recipient
 The active contribution of society towards innovation must be supported and nurtured
Community innovation builds partnerships and consensus
 Dialogue with society about what their needs are, and involving them in the development of solutions,
builds ownership and personal responsibility
Innovation supports and accelerates other government objectives
 By strategically integrating innovation with other strategies, government policies and objectives can
be achieved more efficiently and effectively
Building an Innovative Society
 Removing the barriers of innovation, and creating a more conducive environment
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The Strategic objective of catalysing innovation towards particular
outcomes is supported through three broad policy objectives
THE STRATEGIC OBJECTIVE FOR INNOVATION
To accelerate innovation in all its forms, in order to bolster and support the broader
strategic objectives of employment creation, and sustainable social and economic
development.
POLICY OBJECTIVE 1:
POLICY OBJECTIVE 2:
POLICY OBJECTIVE 3:
Effortless Communication and
Access to information
Promoting strategic industries
and sectors
Driving Social and Public
Innovation
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Table of Contents
 INTRODUCTION
 OUR UNDERSTANDING OF INNOVATION
 STRATEGIC AND POLICY OBJECTIVES
 INTERVENTION MECHANISMS
 WAY FORWARD
12
There are 5 initial interventions and projects that can support the
strategy
Innovation
Development
Office
Collaboration
Network
Cluster and
Precinct
Management
Innovation
Incentivisation
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Smart City Support
Innovation happens because of the interaction of people, in
finding new solutions to their challenges
Physical Network
ACADEMIA
PRIVATE
SECTOR
Face-to-face networking structures which will
host regular events to exchange knowledge
and innovations. The networks will be
composed of all agents involved, including:
Communities; Private Sector; Academia;
Government
Organisations;
International
Representatives
COLLABORATION
NETWORKS
INNOVATION
Electronic Network
An electronic networking platform that
provides additional functionality to enhance
and support activities that are represented
within the face-to-face networks, such as:
GOVERNMENT
COMMUNITY
A database of member activities; archived
information; active networking components;
links and connections to relevant information
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Government Procurement can be used to drive innovation
through competitions, focussed on public service innovation
1. Open
competition
approved by IDO
6. Assessment of
projects for
Phase 2 Funding
7. Phase 2 –
Prototype
development
lasting multiple
years, R1 – 10m
2. Open
competition
driven by
strategic
objectives
5. Phase 1
demonstration of
feasibility –
lasting 6 months
and worth R500k
to R1m
3. Applications
received from
companies and
processed
4. Most
Interesting Ideas
selected
8. Leads to
competitive
procurement by
department and
product to
market
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•
Green Energy Technologies
(including wave power, gas
turbines, energy efficiency)
•
Social Housing
•
Health care provision
•
Defence and Military Applications
•
Low-emission vehicles
•
Advanced Materials technology
Government Procurement can be used to drive innovation
through competitions, focussed on public service innovation

Stimulate technological innovation

Utilize small businesses as a mechanism to meet government research and development needs

Fostering and encouraging participation by socially and economically disadvantaged small business
concerns and women-owned business concerns

Mitigating risk through phased project delivery

Enabling departments to appeal for a wide range of ideas and evaluate these through short-term
simplified contracts

Reducing administrative obligations

Facilitating engagement with entities that the government would not usually do business

Creating novel solutions to existing or emerging issues
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Innovation Vouchers can help foster innovation, and improve
access to new ideas
The Innovation Voucher allows you to concentrate on running your
business while knowledge providers come up with a solution
INNOVATION VOUCHERS
IDEA
Finances
Time
Expertise
Networks
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KNOWLEDGE PROVIDERS
Innovation Vouchers allow organisations to ‘purchase’ research
for their own ideas
 Certain entities are registered as Knowledge Providers, including amongst others:
– Private organisations
– Universities and academic institutes
– Private individuals
 Companies or individuals may then purchase “Innovation Vouchers” from the IDO for a certain
amount, say R50k. This can then be redeemed at one of these Knowledge Providers for research
equivalent to R100k
 Companies could purchase Innovation Vouchers, and provide them as CSI to start up companies,
NGOs, Charities, etc.
 Caution needs to be taken to ensure that the voucher system is not abused
 Similar systems have proven exceptionally successfully elsewhere in the world – the challenge is to
develop a system that is appropriate for Gauteng
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Incentivising innovation towards the strategic objectives of
government allows us to fulfil our mandate more effectively
Individual Incentivisation
 Existing incentives only focus on organisations and companies –
but people are also driven by a “profit motive” – i.e. Higher
salaries. It may be possible to identify mechanisms by which
individuals are persuaded to move into, or remain within, an
“innovation-oriented” career, by linking them with form of incomerelated grant, tax rebate, or refund
Social Innovation Incentivisation
 Because only scientific and technological innovation is
incentivised, less effort is spent on developing solutions to social
challenges. Creating an appropriate CSI mechanism for social
innovation may quickly stimulate this area
Across all three areas, it is noted that
Provincial government has no fiscal authority
of tax rebates or incentives.
At the same time, cognisance is taken of the
responsibility which government must take in
spending public funds – i.e. In a responsible
and effective manner.
Although these must be understood, there
are sufficient examples worldwide to show
that they can be dealt with and addressed,
while still supporting the final strategic goals.
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The development of innovation spaces will help drive sector
focused innovation – with the low-carbon economy first
Impact of Sector Cluster dependent on Size

Number of agents available to interact

Ability of agents to interact with each other

Optimised usage of specialised resources, including:

Facilities

Labour

Attraction of ancillary services at sufficient density

Ability to induce similar buyers and sellers to the Cluster
Creation of a network of innovation clusters throughout
the province, focusing on relevant research areas and
aligned to the development of the strategic industries and
sectors.
These clusters will be able to innovate faster, because of
the benefits arising from clustering.
The first cluster being considered is the Low-Carbon
Cluster, developed in parallel with, and guided by, the
Green Economy Strategy as well as the Gauteng
Industrial Policy
Clustering
Effect
Economies
of Scale
Knowledge
Spillover
CLUSTER
Economies
of
Agglomerati
on
Network
Effect
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Creating a Smart City-Region will help drive an Innovative CityRegion
Characteristics of a Smart City
 Advanced information and knowledge infrastructure – which allows for easy and fluid communication
 An efficient public service system that uses the communications infrastructure in service delivery
 Strong levels of communication within, and between, the different members of the community
 A safe, secure and environmentally friendly location
 An integrated city environment in which the various components of the city (e.g. infrastructure,
security, utilities, transport) are interfaced and networked to allow real-time monitoring and rapid
response
 A strong connection between different “Smart Communities” able to respond to the needs and
challenges of the city-region
A safe, secure and sustainable
city that supports the needs of
its citizens, and attracts
investment, resources and
human capital as a preferred
destination
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Table of Contents
 INTRODUCTION
 OUR UNDERSTANDING OF INNOVATION
 STRATEGIC AND POLICY OBJECTIVES
 INTERVENTION MECHANISMS
 WAY FORWARD
22
Ways to contribute
 Davis Cook – [email protected] or 082 803 7716
POLICY FORGE:
 An online interactive site developed to provide basic input around the thematic areas of the draft
strategy
 Currently in a pilot stage
www.policyforge.co.za
SOUTH AFRICAN INNOVATORS NETWORK
 SAINe is an online networking platform that promotes the discussion, sharing and learning of
innovation, and innovation related topics
 There will exist multiple blogs on the site, providing an opportunity to engage on the document’s
contents, and receive feedback on the development process
www.saine.co.za
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Key Deadlines
 14 May – Feedback process for Strategy Document Ends
 End of May – Submission of Strategy document for provincial adoption
 End of July / August – finalisation of business cases for interventions
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END OF PRESENTATION
THANK YOU
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The fastest growing countries in the world also appear to have
the highest growth in patent production.
There is a 1-1 correspondence of the countries that have had
the highest per capita GDP growth between 1985 and 2005, to
those who have increased most the number of patents per 1000
citizens.
Although these figures do not explain the direction of causality,
i.e. whether innovation creates economic activity, or the other
way around, they do clearly indicate the close relationship
between the two variables.
Patents per 1000 Citizens (Index normal at 1985)
20
15
10
5
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
0
Per Capita GDP
Growth
Growth in
Patents per 1000
1
China
China
2
Rep. of Korea
Rep. of Korea
3
Thailand
Thailand
4
Singapore
Singapore
5
India
India
Per Capita GDP (Index normal at 1985)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
25
Rank
Source: World International Patent Office, United Nations
Statistics
26
South Africa’s knowledge generation is slowing in comparison to
trading partners and competitor nations.
Percentage of GERD financed by Business Sector
80
70
60
50
40
30
20
10
0
Even the rate of growth,
shown below, is decreasing in
comparison, indicating that
the difference in future will be
even larger.
2003
2004
Patent Comparison to BRIC Countries
50%
40%
30%
20%
10%
0%
-10%
-20%
Both in financial terms, and
absolute number of patent
production, South Africa is
losing ground against both
trading partners and other
competitor nations such as
the BRIC countries.
Total OECD
Russian Federation
South Africa
China
2005
2006
Brazil
China
India
Russia 15%
Aus
EPO
RSA
UK
USA
Patent Comparison to Trading Partners
RSA
10%
5%
0%
2002
-5%
2002
2003
2004
2005
2006
-10%
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2003
2004
2005
2006
Open Innovation
Innovation must be thought of as wider than just technology and science
Economic
Innovation
Economic Innovations are “traditional” innovations; they revolve around product,
process and marketing of goods and services. Economic innovation address the
needs of the market, satisfies the demands of consumers.
Social
Innovation
Social Innovations solve “non-market” problems such as employment, safety and
security, delivery of healthcare – basically all of those “social goods” which the market
generally does not get involved in; they satisfy the demands of citizens
Public Sector
Innovation
Public sector innovation addresses the needs of government; this is different from the
needs of the citizen. It also faces unique challenges because of the fiduciary
responsibility of government in spending public funds on inherently risky projects
Community
Ownership
While ‘traditional’ innovations may be
successful in the market through “closed”
innovation, social and public innovation
can only be successful through
collaboration
and
community
participation
Public-Private
Innovation Partnership
Innovation
Open
innovation
processes
are
revolutionary, in that they include the
community in the innovation process.
B
A
D
C
Transferability
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Public Innovation
An Innovation System is the set of institutions that support and nurture
the innovative process
CONSTITUTION
Minister and Dept
of Education
Minister and Dept
of Sci & Tech
Other Ministers
and Departments
Community and Citizens
are passive recipients of
innovation
Policies, Governance and Resourcing
Human Capital
R&D
Government-driven with
no inclusion of market or
social forces
Innovation
Focus on science and
technology
HEIs
HEIs, PRIs, Business,
Enterprises, NGOs
HEIs, PRIs,
Business etc.
No strategic use of
innovation in driving
provincial government
mandate
Public and Private Users
The South African National System of Innovation, NACI, 2006
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In order to address these challenges of the National System, an adjusted
Regional Innovation System (RIS) is proposed
4
3
Incentives
Colleges
2
Resources
Community
HEIs
1: Civil Society and Consumers
have needs for innovative
solutions in all areas – economic,
public and social
1
Academia
CIVIL SOCIETY
&
CONSUMERS
Public
Sector
Funding
Policy
Private
Sector
2: Innovation is not a pipeline – it is
an integrated process with
involvement of all members of the
community: dialogue is essential
Governance
Primary
Education
International
Environment
RIS: The entire system of innovating agents and entities, along with their end-users, which together are responsible for the
development, production, and use of new knowledge which is both socially and economically useful.
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Each set of agents have their own responsibilities, and roles to play
within the Regional Innovation System
Academia
One of the traditional areas for ‘innovators’, this remains a core component of the innovation
system. Academic institutions are largely responsible for basic research and development in
virtually every sphere of knowledge, they provide education and skills development that
supports innovation, and act as attractors for people with ideas
Private Sector
Referring not only to large corporations with significant R&D budgets, but more
importantly to the SMME sector. Small companies are able to rapidly respond to disruptive
innovations by adapting their business models, services and goods. SMMEs can also
collaborate easier and faster with each other due to their flexibility
Public Sector
It is a national priority for ‘business un-usual’; that we do more, with less. This is the
core principle behind innovation, and the public sector is able to play a role not only in the
development of new public service models and social goods, but also in using their own
power and influence to direct innovation towards public goods and services
Community
Largely ignored by traditional innovation strategies, the community itself is a
powerful role-player in the innovation process, as well as community members themselves.
Examples include the Open Source software movement, the entire mountain biking industry,
hip-hop / kwaito, automotive manufacturing, Small-scale manufacturing
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The impact of a Science and Technology Park can be measured
simply by an industry comparison
Comparative Growth - Industry vs. STP
12
Percentage Growth
10
STP Tenants
Increased Economic
Activity leads to
knock-on effects
8
6
4
Industry
Average
2
0
-2
1994
1996
1998
2000
2002
2004
2006
2008
Interventions result in increased business activity

Business Development

Value Added

Marketing and Branding

Management Support

Networking

Interactivity
32

GDP Growth

Employment

Export Activity

Sector Composition

Increase in Knowledge
Base
The UK’s Small Business Research Initiative helps small, hightech companies innovate through procurement
33
•
Green Energy Technologies
(including wave power, gas
turbines, energy efficiency)
•
Social Housing
•
Health care provision
•
Defence and Military Applications
•
Low-emission vehicles
•
Advanced Materials technology
Proposed Advisory Panel
 Dr Neville Comins
– Independent Consultant
 Valerie D’Costa
– infoDev Programme Director, The World Bank
 Dr Paolo von Schirach
– Independent Consultant
 Prof David Everatt
– Executive Director, Gauteng City Region Observatory
 Amanda Nair
– CEO, BlueIQ Investment Holdings
 Matthew Heim
– CEO, NineSigma Open Innovation
 Rhoda Khadalia
– Executive Director, Impemelelo Foundation
 Prof Robin Moore
– Vice-rector, University of Witwatersand
 Prof Michael Pepper
– Director, University of Pretoria
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Stakeholders engaged, and opportunities arising from this
engagements
 Gauteng City Region Observatory (David
Evaratt)
 Inclusion of Innovation Strategy into OECD
Territorial Review
 The Innovation Hub (Haresh Haricharun)
 Engagement between MEC and Executive
Council of Uni. Of Witwatersrand
 Human Sciences Research Council (Julien
Rumbelow)
 Collaboration with World Bank on the
development of a Green Technology Industry
Cluster and Plan
 University of the Witwatersrand (Robin Moore)
 Involvement of NineSigma Open Innovation
Platform in driving social and public innovation
 Western Cape Provincial Government (Rahima
Loghdey)
 COFISA (Neville Comins)
 Adoption of Gauteng strategy concepts in
multiple SA Provincial strategies
 The World Bank (Valerie D’Costa, infoDev
Programme Director)
 Innov8 community engagement 20 April 2010
 Other international consultants (Paolo von
Schirach - Independent)
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