Open Innovation Solution Exchange - Pilot Project Case Study

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Executive Summary

― The Gauteng Province of South Africa has taken a lead on the African continent by piloting a regional Open Innovation (OI) platform to connect the internal R&D processes and systems of private and public sector organisations with an external network of innovators, researchers, inventors and entrepreneurs.

A Neutral Open Innovation Intermediary for Gauteng

A number of major industrial and public sector players in Gauteng have been experimenting with OI as a mechanism to improve their competitiveness and effectiveness, building on a global movement towards OI as an essential business practice. As the main innovation intermediary in the Gauteng Province, The Innovation Hub recognised a need to consolidate this interest in OI and establish a neutral OI platform that can support a critical mass of innovation exchanges between solution seekers and solution providers.

Gauteng is the heart of South Africa’s economy and has a treasure chest of knowledge capital, which is fertile ground for job creation, improved competitiveness and economic growth. For this reason, the objectives of the Gauteng Employment, Growth and Development Strategy (GEGDS) as well as the Gauteng Innovation and Knowledge Economy Strategy (GIKES) have been to improve competitiveness in Gauteng and efficiency in service delivery, and to promote sustainable livelihoods and the quality of the lives of our citizens. GIKES is set apart from other provincial or regional innovation strategies through its focus on OI.

Leveraging Gauteng’s Knowledge Resources

OI seeks to solve problems through utilising knowledge capital (innovative ideas and products) outside organisational boundaries, by inviting individuals and entities external to the organisation to innovate around previously intractable issues, thereby linking potential solution providers possessing niche capabilities or technologies in the same but also adjacent sectors with real problems and actual opportunities for business growth. Given the demonstrated potential of OI for driving transformative growth within organisations, and the vast potential for an emerging global city-region such as Gauteng where knowledge tends to be highly distributed and emerging entrepreneurs and innovators have been disconnected from the needs of large companies and government, The Innovation Hub embarked on an OI project for the Province. The Innovation Hub Open Innovation Solution Exchange was launched as a web-based platform to boost the GEGDS and GIKES strategies, with the aim of stimulating competitiveness, economic growth and job creation in Gauteng. The platform leverages the openness of the Internet to create a more accessible version of the traditional Science Park, where researchers and entrepreneurs from across the Province can engage with potential clients, share knowledge, and collaborate on joint innovation projects. 

Generating Value through a Rigorous, Trusted Process 

The Open Innovation Solution Exchange enables demand-driven innovation by publishing problems or “Challenges” defined by government departments or private companies that can be solved by other external entities and individuals. The platform also supports a technology push or “Technology Offers”, whereby innovators with unique capabilities can showcase innovative products and services to a potential market. The Innovation Hub funded the initial round of Challenges on the portal, bearing in mind that it had to demonstrate “value for money” for potential solution seekers. Thereafter, the portal’s business model is revenue based, whereby seekers fund the posting of their Challenges to the portal and providers can continue posting solutions at no cost, whilst being able to showcase their innovative products on the portal. The project was underpinned by governance structures that drew on a diverse mix of private and public sectors stakeholders from across the Province, and leveraged a C4 methodology, which implements a clearly-defined process covering the Challenge definition, Connect, Consider and Commit steps necessary for managing the exchange of intellectual property and realising tangible outcomes from an OI interaction.

Tangible Opportunities for Innovative SMMEs and Researchers

The pilot round of eight Challenges posted on the platform identified 84 potential solutions, with a large percentage (64%) sourced from SMMEs and 72% of the potential solutions emanating from Gauteng. So far, at least nineteen of the proposals demonstrate strong potential and were shortlisted for further engagement by the Challenge owners. The maturity of solutions represented a diverse mix along the continuum between concept and commercial availability, with the majority (38%) in the concept stage and 31% of the potential solutions in the commercial stage. Most of the Technology Offers were in the prototype stage (39%) with innovators seeking co-development partners, although few of these received expressions of interest (26%).

These relatively early stage, prototype technologies developed mainly by local SMMEs and researchers reflect a strong but under-exploited potential in the Gauteng innovation system that can be leveraged for the benefit of government and private companies. The Innovation Hub plays an important role through its product and business incubators in supporting the development of these emerging technology entrepreneurs and the adoption of solutions by industry and government. Through the pilot round of Challenges and Technology Offers, it became clear that significant benefits can be derived from the platform for solution seekers, by connecting their previously closed R&D activity with a wide base of innovative technology partners in a relatively short time via a carefully managed process and trusted intermediary. For solution providers, a new channel was created to access the, often hidden, innovation needs and business opportunities within public and private sector organisations; as well as to align their research and development work with explicit local market requirements.

Demonstrating Benefits for Industry and Government

The main challenge with the OI process was to articulate its benefits to potential seekers who often have strong existing knowledge of the local innovation system, especially in their area of expertise, and who may be reluctant to expose their problems or strategic direction. It is also challenging for seekers to differentiate OI from existing procurement processes, whilst aligning with the supply chain management regulations of state entities. It became clear that OI is emerging as a practice, even within globally competitive companies, and a regional platform of this kind needs to build trust within (and amongst) seekers and providers.

A central aspect of an effective OI process - and to realising benefits for seekers - is that ‘common’ or well-known problems need to reformulated (and the recruitment campaign run) in a way that attracts innovative solutions and new partners (or novel combinations of technologies and partners) outside of the traditional supplier or researcher networks. In addition to sourcing solutions to Challenges, the process produces a number of important secondary outputs such as giving solution seekers a broad picture or landscape of technologies of interest to confirm their innovation direction. In the development of this type of regional platform, patience is required to incubate and grow the fruits of OI, which typically centre on building on a critical mass of opportunities and connections, solving real problems and demonstrating benefits for the broader economy, enterprise development and job creation.

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