Innovation - Cape Digital FoundationIn our last newsletter we examined how digital technology has the power to revolutionise township micro enterprise, where digital technology has the ability to turn necessity entrepreneurs1 into opportunity entrepreneurs2.

Through their analysis of the drivers that enable national economies to achieve sustained growth and long-term prosperity,The World Economic Forum’s annual ‘Global Competitiveness Report places each country into one of three progressive stages of economic development.  In the first phase, which is factor-driven, a country has to develop a base of available labour and natural resources. This is followed by a second phase where the labour and natural resources are developed to be put to use in an efficient product and production environment. The third phase of development moves into an innovation-driven stage where competitiveness is built on the successful commercialisation of new technologies and new products and services – in keeping withThe Fourth Industrial Revolution.

  • Stage 1: Factor-driven economies, where countries compete primarily on the use of unskilled labour and natural resources; and companies compete on the basis of price as they buy and sell basic products or commodities.
  • Stage 2: Efficiency-driven economies, where growth is based on the development of more efficient production processes and increased product quality.
  • Stage 3: Innovation-driven economies, where companies compete by producing and delivering new and different products and services by using the most sophisticated processes.

How can South Africa progress to being an innovation-driven economy?

South Africa is currently classed as an efficiency-driven economy.  It is well documented that investing in science and technology-driven innovation is one of the means of driving economic growth in Africa. For South Africa to make progress to being an innovation-based economy, research clearly indicates that the use digital technology is a key driver. To this end, putting improved education infrastructure in place in terms of science and technology is the minimum requirement for the steady development of our economy into being innovation-driven.

Moving the economy forward starts with digitally enabling the man in the street

By the same token, the important role that science, technology, engineering and mathematics (STEM) education plays, as a catalyst to people being work and business-ready, is well recognised and documented. And so, it correlates that educating and stimulating the uptake of digital technology, from the ground up, has its place in stimulating the economy. This entails creating smart digitally-enabled citizens, shifting the mind-set of necessity entrepreneurs to being opportunity entrepreneurs who go on to employ others, and helping SMMEs to adopt technology and innovate to thrive in the digital economy. These are all ways in which South Africans can be enabled to play a part in moving the economy forward to being innovation-based.  It follows that:

  • with unemployment being rife in South Africa, bringing e-skills training to people and giving them access to the digital space is a fundamental necessity – with a focus on helping people in disadvantaged communities become work-ready, equipped with digital skills;
  • when it comes to survivalists (necessity entrepreneurs who work for themselves because they “have no other choice”) educating them in understanding business and how they can use mobile technology to support their businesses facilitates a change in mind-set – they are business owners; and
  • helping micro and small business to adapt their businesses to be viable in the digital economy enables business owners to innovate and participate in the global digital economy.

Education and training is the key

The CoLab for e-Inclusion and Social Innovation at University of the Western Cape (UWC), under the leadership of Dr Leona Craffert, has conducted extensive research on how to create transformational change in the realm of individuals and organisations for the development of the digital economy. Out of this research it is clear that education and training is essential to successful transformation and the Colab have created several short-course training programmes for individuals and micro business owners, with a focus on disadvantaged communities.

Their programme, “Mobile Technology in Support of SME Business” utilises a blended approach that includes face-to-face interaction, online learning and coaching, and group work. Firstly each student is asked to explain their business to the group. Then they get to plot each element of their business across given criteria. One of the questions put to the students is ‘Where do you use technology in your business?’. Dr Craffert says, “It is at this point that many students realise that they fail to plan – and that they are in survivalist mode when in reality they have launched a small business that could grow. Peer learning takes place in group discussions and it is amazing to witness the shift in mind-set taking place. We help them to gain a different understanding of the potential of their business.”

The Cape Digital Foundation stands for having a catalytic role in initiating practical on-the-ground training that not only provides digital skills but also gets individuals work- and business-ready and guides them into ecosystems where they can put their skills into practice, collaborate and innovate – being productive citizens in the country’s digital economy.

1 Necessity entrepreneurs are individuals who work for themselves because they do not have another means of generating an income.

2 Opportunity entrepreneurs are those people who start a business because they spot an opportunity, one that meets market needs, and choose to pursue it.

The power of digitally enabled small and micro enterprise to shift the economy

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