Tom Thumbs a vital link in the innovation chain
Increasingly around the world, a nation's investment in research and development (R&D) is a key determinant of future economic progress. The various international competitiveness assessments all take this aspect into account when ranking countries according to their global competitiveness level. South Africa currently spends about 0,7% of GDP on R&D, compared with an OECD average of 2,2%.
Given the link between growth and innovation, it is not surprising that about half of this expenditure is by the private sector. Managing innovation and R&D has become a critical function of companies investing millions of Rands in R&D in their efforts to become and/or remain competitive.
"Companies that are serious about innovation, however, should not ignore the Tom Thumb principle," according to Jill Sawers, Incubation and Entrepreneurship Manager at The Innovation Hub, highlighted in her presentation at a recent Innovation and R&D conference attended by more than 100 business leaders.
Sawers referred to a statement published in the Sunday Times (4/8/02) indicating that "95 percent of all radical innovations created since the second World War were developed by small entrepreneurial firms (the Tom Thumbs), reminding the larger corporations that they do not boast many successes with regards to radical innovation.
"Large companies are typically geared to manage and promote incremental innovation. The ability of companies to of leapfrog their competitors usually requires radical innovation. Larger companies can achieve this by partnering with, or acquiring a small company who has developed a radical innovation. SMME's therefore play a valuable role in the innovation value chain," she said.
Different points of departure between large and small companies regarding flexibility, culture, value systems, the disclosure of core technologies and the threat of a possible disregard for patent protection, makes this a difficult interface to manage. According to Sawers this is why initiatives such as science and technology parks and innovation centres have become so important. Initiatives such as The Innovation Hub and the Godisa Incubators create the enabling environments to manage this interface.
The benefits of partnering with institutions of higher learning to remain competitive include the potential to strengthen skills and knowledge, access facilities and perform due diligence on potential future employees.
In the same way, the benefits of partnerships with SMMEs include access to a larger technology resource pool of innovative products, a shortened product development time cycle and reduced R&D development costs, Sawers pointed out.
Jill Sawers
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