The use of innovation by SMMEs to tackle social challenges in South Africa

Abstract

Innovation has become a critical point of discussion due to factors such as slow economic growth, commodisation and global competition. The national system of innovation (NSI) approach has been largely adopted by policy-makers, including those in South Africa, to understand and describe the structure of the innovation process. The NSI is defined as, the network of institutions in the public and private sectors within a nation whose activities and interactions initiate, import, and diffuse new technologies. There are two distinct and complementary modes of innovation: (1) Science, technology and innovation (STI), which focuses on promoting research and development (R&D), utilising and creating access to explicit codified knowledge; and (2) Doing, using and interacting (DUI), which focuses on innovation strategies typically involving organisational frameworks, improving knowledge sharing among employees and promoting interactive learning. Due to the 10-Year Innovation Plan of the Department of Science and Technology (DST), a number of legislations and policies have been introduced to remove obstacles that weaken South Africa’s NSI and obstruct growth in South Africa’s STI capacity. The research problem is to analyse the modes of innovation used by small, medium, and micro enterprises (SMMEs) in South Africa and to identify the potential for SMMEs to use their business innovations to tackle social challenges faced in South Africa. The method used in this study was a quantitative analysis by means of an online survey questionnaire sent to SMMEs in South Africa. The results indicated that 85% of the SMMEs used DUI-modes of innovation compared to the 15% who used STI-modes of innovation. Furthermore, 65% of the firms indicated that their business activities could be used to tackle at least one of the social challenges outlined in the National Development Plan (NDP) to a high extent, with 49% indicating that their innovations could tackle more than one social challenge. Policy-makers need to direct more effort into increasing STI-modes of innovation within South African SMMEs and using the innovation activities within SMMEs to tackle social challenges faced in South Africa.