INNOVATION plays a key role in creating an enabling environment for job creation and the twin windfalls of competitiveness and revenue growth.

But to achieve these desirable goals, there is a need to unpack what innovation means in practice for the entrepreneurial, private and public sectors, says Accenture’s Managing Executive in Resources Ken Robinson.

He says the Accenture Innovation Index aims to promote business growth and development of new, sustainable enterprises that would in turn spur much-desired job creation.

“Innovation can create value in new ways, drives profitable revenue growth and enables organisations to maintain a competitive advantage over the longer term. Entrepreneurship and innovation are key to job and wealth creation.”

Jayshree Naidoo, innovation executive at The DaVinci Institute, which is a key Innovation Index partner, says that organisations both large and small need to understand the extent of their innovation focus. “The innovation index will offer both policy makers and businesses a national benchmark for innovation.”

She says the government’s National Development Plan has an aggressive target of creating millions of jobs by 2030.

One of the key objectives is to increase the size and effectiveness of South Africa’s innovation system, ensuring closer alignment with companies that operate in sectors that fit in with the government’s economic growth strategy.

In the second phase, it aims to lay the foundations for more intensive improvements in productivity. Innovation across state, business and social sectors should become pervasive, the plan says. It calls for centres of learning to be aligned to industrial clusters with potential for domestic and global linkages.

Innovation should focus on improved public services and on goods and services aimed at low-income sectors.

However, Ms Naidoo says: “To achieve anything close to the millions of jobs envisaged in the development plan, government needs to create an enabling environment that allows business to grow unhindered, so they are able to create jobs — and one in which investors feel confident about being a part of this focus on innovation.”

She believes it is debatable whether this intensity of job creation can be achieved in the public sector and that the bulk of the new employment opportunities will have to come from entrepreneurs as well as the private sector.

She notes that while there is a strong reliance on the private sector to create jobs, the sector is also under huge pressures in terms of stringent policies and economic shifts that have destabilised many companies.

“Both government and the private sector have critical roles to play in job creation,” says Robinson. The private sector is the key engine of job creation, accounting for 90% of all jobs in the developing world.

“But governments play a vital role by ensuring the conditions are in place for strong private sector-led growth and by alleviating the constraints that hinder the private sector from creating jobs for development.”

To meet its 2030 jobs target, the government will also need to focus on large public works and infrastructure programmes.

“Access to affordable and quality infrastructure is a prerequisite for firms to operate,” Robinson points out.

“The private sector in turn has a responsibility to focus on continuously innovating to remain competitive and sustainable and ultimately be in a position to create jobs.”

Ms Naidoo says that as the key source of a company’s competitive advantage, innovation has to be a process that is disciplined, structured and properly measured.

“Product, process and service innovation is the way companies will compete as opposed to competing just on price.”

She points out that recent international research indicates that organisations that create jobs are often innovative start-up firms less than five years old.

“The key enabling factor in these instances is the creation of an environment in which innovation can thrive. The challenge we face in South Africa is that organisations have often failed to internalise what innovation means to them. It’s about understanding how we can create value from innovation.

How does it drive profitable revenue growth and how does it enable an organisation to maintain competitive advantage?

“This challenge of internalising innovation exists not only in the public sector but with entrepreneurs and large corporates alike.

Unfortunately, South Africa does not have a fully functioning national system of innovation and we depend strongly on the private sector to help make this a reality.”

She cites the example of some of the notable job creation funding and awards instruments that have been set up within the private, public and NGO sector such as the Jobs Fund, the SAB Foundation Innovation Awards and the Impumelo Social Innovations Awards Trust.

She suggests that a simple but effective definition of what innovation represents is: new ideas that are implemented to create value.

“Companies often make the mistake of measuring the value of innovation solely in monetary terms. We have a thriving culture of social innovation in South Africa and social innovation and entrepreneurship is a huge job creation sector on its own.

There may not be monetary benefits involved, but there is value for people who are living with HIV/AIDS or who do not have access to education.

“These sectors also create much-needed jobs as well as making a difference to the social fabric of the country.”

Robinson believes there are two key beneficiary groups for job creation: one of these is urban school leavers without university exemption, who are English speaking and comfortable with smartphone and internet technology.

“We need innovative service opportunities and innovative market development (including foreign markets) in areas such as call centres, help desks, data collection, data analysis, sourcing and purchasing.

“We believe this should be an essential part of South Africa’s strategy as an African gateway and hub for international organisations.”

The second group comprises undereducated, unskilled individuals who may be urban, rural or migrant workers “The urban unskilled jobs should be in innovative manufacturing hubs where close geography enables synergy between organisations and provides energy supply for probable highly electricity intensive operations.

Innovative production methods will enable quality without extensive labour replacing automation.”

Insights: Accenture Innovation Index