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South Africa Needs To Innovate Faster To Ensure Stable Economic Growth – Accenture’s Innovation Index 2017 Shows

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The past year has seen only marginal growth in innovation by South African companies. According to Accenture’s Innovation Index 2017 released at the Accenture Innovation Conference recently, the country has seen a moderate increase in innovation, scoring additional two points from 2016 to reach 52 points in 2017. Over a three-year period, the score has only increased by six points. This growth is, however, not advancing at the pace required to translate into stable economic growth.

The index suggests that South African companies are not spending their allocated budgets on innovation due to economic uncertainties. On average, companies are putting aside 45 percent of their annual revenue for innovation developments, yet actual spending is cautious and conservative at 36 percent.

“In a rapidly digitising business environment where new players are disrupting traditional revenue streams across all industry sectors, it is now more important than ever for companies to be stepping up their innovation game,” said William Mzimba, Chief Executive of Accenture South Africa and Chairman of Accenture Africa. “Digital innovation is reshaping industries by disrupting traditional business and operating models. But it is also having a profound impact on society, presenting both challenges and opportunities for businesses and policy-makers on the African continent. Innovation champions know this and their approach is seeing them achieve almost double the innovation ROI of the rest of the market,” said Mzimba.

According to Yusof Seedat, Director at Accenture Research, key is to establish the most effective way to drive the innovation agenda in these challenging times. “The good news, however, is that pockets of excellence do exist. There is a clear distinction between Innovation Leaders – companies that are successfully managing to execute across the various stages of the innovation value chain scoring 65 points and above on the Index (27 percent of the total sample), and the rest of the market – those that are struggling to move beyond their innovation strategy and not achieving their true potential in terms of innovation,” said Seedat.

The Accenture Innovation Index supplement (Photo supplied)

The innovation value chain

Accenture measured innovation maturity across five stages: Innovation Strategy, Ideation, Absorption, Execution as well as Benefits and Impact. Throughout the stages, Accenture found that as companies mature their innovation capability, their focus shifts from just developing ideas towards a more comprehensive innovation value chain. Early innovation initiatives focused almost exclusively on brainstorming and ideation. This has recently been augmented with a concerted effort to ensure that relevant ideas are well executed.

“Interestingly, ‘absorption’ emerged as a key stage between ‘ideas’ and ‘execution’. Idea absorption

indicates a company’s ability to successfully filter, prioritise and channel the best ideas to the execution stage. This stage is a crucial linking stage between two very different innovation skills: the creative ideation space and the clinical execution space.” said Seedat.

The index shows that companies are aware of the need to innovate: they score high at the strategy stage (83 points) which entails creating the plans and vision set to innovate. However, they score lower on all other aspects, from ideation (44 points) to absorption, at 53 points, execution at 59 points and, finally, achieving the desired benefits at 37 points.

“Companies are struggling to seamlessly translate their innovation strategy to well-executed innovations that realise maximum benefits. Our findings point to several areas creating this anomaly – from weak innovative cultures and poor organisational processes that do not fully support the innovation vision of organisations, to inadequate information dissemination and collaboration, and narrowly focused innovation policies,” noted Seedat.

Where it all begins: Innovation Strategy

Institutionalising structured innovation capability is necessary to fuel growth, the report notes. This is a responsibility that extends far beyond the office of the CEO, however – organisations’ entire top teams have to be on board. Key is that these individuals do not all have to be creative masterminds; more important is their ability to draw out the skills of others to build an innovation culture.

At the Strategy stage, innovation is indeed on the radars of SA’s most forward-thinking businesses – 90 percent of Innovation Leaders have instilled an innovation culture, according to the report. In these companies, innovation is seen as an important part of employees’ daily jobs. This stands in contrast to 65 percent of the rest of the market.

Moreover, Leaders recognise that cultivating innovation means hiring intelligently. When it comes to skills, only 56 percent of companies in the rest of the market recruit those with specific skill sets to support innovation-related activities, as opposed to 100 percent of Innovation Leaders.

Powering strategic decision making with data is also a key innovation enabler for leaders with 80 percent saying they see the full potential of business intelligence and analytics to drive innovation and inform strategy compared to 35 percent of the rest of the market.

Homing in on innovation: The Ideation stage

Innovation Leaders scored 67 for Ideation – the stage during which strategy is turned into actual concepts – leading the rest of the market (at 36 points) by a large margin.

A factor setting Innovation Leaders apart is collaboration within and outside the organisation, the report shows. Eighty percent of Innovation Leaders have digital platforms in place for employees to interact and share ideas, versus 37 percent of the rest. Further, a mere 44 percent of rest-of-market organisations encourage or make use of cross-teaming and collaboration between different stakeholders, as opposed to 85 percent of Innovation Leaders.

Absorption: Separating the best from the rest

The third stage of the value chain, Absorption, measures companies’ ability to sort through, prioritise and align around the good ideas generated during ideation. Low absorption limits companies’ ability to execute and stymies innovation efforts over the long term. Innovation Leaders score 77 for this metric, with the rest of the market coming in at 44. The country’s most innovative companies are fast movers: 80 percent of Innovation Leaders are more adept at taking a year or less from initial prototype development to full commercialisation, the report found.

Putting innovation into practice: Execution and Impact

At the Execution stage, 85 percent of Innovation Leaders are focusing on disruptive innovations, leading the rest of the market by 32 points overall, at 82 to 50. Yet it is in terms of Benefits & Impact that the gulf between Innovation Leaders and the rest of the market is most pronounced. Leaders scored 65 points at this stage, while the rest of the market trailed at 25. Measurement is one key element: the Index shows that 73 percent of Innovation Leaders implement performance indicators encompassing workflows and business processes critical to the success of innovative development. A mere 38 percent of the rest of the market follow suit.

Leaders also continuously monitor, evaluate and look for improvements. They do this by assessing changes in the ratios of innovation outputs to inputs, the mix of different types of innovation investments and their related risks. They also know the value of customer feedback. Ninety percent of Innovation Leaders get feedback from customers through online and offline channels, versus 43 percent of the rest of South African businesses. “Despite challenges associated in measuring innovation, leaders find ways of measuring and monitoring innovation performance across the value chain stages.” concluded Seedat.

Innovation in 2018 and beyond

Innovation has to become a more central part of South Africa’s economic growth model and the need to foster a business climate and culture conducive to breed innovation is vital. For South African companies, innovation follow-through – by implementing innovation strategy – will prove critical in the coming years, the Index notes. To gear up for 2018 and beyond, the Index encourages all SA companies to take note of how Innovation Leaders enable, measure and drive success.

 

About Accenture
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 425,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

Contact:

Jonathan Mahapa

Accenture

+ 27 11 208 3947

[email protected]

Brand Voice

The fight against COVID-19 – how Africans are embodying the true meaning of Africa month

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Since its establishment almost 60 years ago, the African Union has dedicated a day, and a month, to the importance of unity amongst its nations. As we approach Africa day, let us all take a moment to appreciate the legacy created by our forebears and carry their hopes into the future.

By Sello Hatang

If you have ever wondered why you feel such a strong sense of responsibility for the people in your community with the COVID-19 crisis upon us, just know that the spirit of unity was forged in our continent through centuries of struggle against colonisation and enslavement. The qualities of Ubuntu are deeply rooted in Africa and its people. The month of May should be a testament to this.

Africa Month is a celebration of a moment in time where leaders came together to create an organization on the 25th of May in 1963. It was the first-of-its-kind, aimed at uniting the hopes and goals of African leaders in over 30 countries. This organization grew into what we now know as the African Union, and it continues to uphold the charter values: to promote the unity of solidarity of African states and to coordinate effort towards a better life for the people of Africa. The AU was officially launched in July 2002, right here in South Africa, with former president Thabo Mbeki at the head as Chairperson.

18 years after Thabo Mbeki’s Chairship, another South African leader is at the helm, and we able to look back and measure how much has been achieved towards the goals promised to its nations on Africa Day. In 2020 more African children are going to school than ever before. Technological advancement on the continent has seen the growing use of renewable energies and the invention of digital wallet products to narrow the financial access gap for the most underprivileged communities. Many of our economies are growing faster than anywhere else on the planet. We have been commended by the International Monetary Fund for creating an entirely new development path, which has solidified the place of countries like Ethiopia, Rwanda, Ghana, Côte d’Ivoire, Senegal, Benin, Kenya, Uganda, and Burkina Faso in the top ten consistently performing economies worldwide.

None of this would have been achieved without the concerted efforts of togetherness shown by Africa and its leaders even in the most trying times. Today, we are faced with another history-defining moment which will test our ability to rally together. The COVID-19 pandemic is taking a toll on the lives of Africans, and placing significant pressure on health systems and economies. The World Bank estimates economic and social impacts worth tens of billions of dollars in estimated output losses this year.

In light of this and other developing impacts on the continent, the African Union inaugurated a COVID-19 Diagnostic Laboratory at its Pan African Veterinary Vaccine Centre, AU-PANVAC, office in Debre-Zeit, Ethiopia on the 8th of May. The PANVAC laboratories, which were initially designed to test the quality of vaccines, were recently mandated to commence research into developing a new vaccine to fight the deadly pandemic. This is the first African Union specialized laboratory to be given such a mandate. While our leaders quickly work on developing a vaccine, we must remember what we are fighting for.

This makes this year’s Africa Day more important than we could ever imagine. It is now that we need the strongest sense of togetherness to overcome this crisis. The values entrenched by a group of hopeful founders so many years ago, are what will define how well we are able to respond today. It is our devotion to each other as Africans, at the best and worst of times that will strengthen our resolve.  As South Africans we aspire to be known for our generosity and practice of Ubuntu. This is the time for us to show these qualities. Not only must we be crisis-management leaders in the time of COVID-19, mounting the technical and logistical challenges, but we must also show leadership in meeting the needs of all who live in our country, especially our most vulnerable populations.

The Nelson Mandela, Kolisi and Imbumba Foundations have had the privilege of experiencing the spirit of Ubuntu as we have been travelling in South Africa providing much needed relief to families across the country. One such example was when we visited a community in Mpumalanga. The community got its resources together to build a house for an old woman whose house was damaged by a storm. This simple act restored her dignity. This bears testimony to what we are as a people.

 Our country has become a global example for the fight against COVID-19. We have managed to keep our numbers down, with active social distancing and an aggressive testing response in a way that our European and American counterparts have not. Emergency relief work has seen the best of South Africa, with generosity and resilience to the fore. All that the African Union has called for on Africa Day is what we have seen exemplified every day during the crisis thus far. Of course, all has not been rosy. We have seen the deep divides of inequality play out in disturbing ways. Mistakes have been made. The challenge is huge.

But we have much to celebrate in Africa Month. We have experienced in recent months a quality of national leadership which is reassuring. We see robust inter-sectoral endeavour in face of national disaster. And we have seen demonstrated both the importance and the capacity of government to play a critical transformative role.

I wish all who live in South Africa a happy Africa day. May we regard ourselves as citizens of a continent of over a billion people and understand that our national interests are interwoven with those of the continent as a whole. May we do more than talk the talk about Ubuntu. And may we keep striving for excellence as we confront multiple challenges.

Sello Hatang is the CEO of the Nelson Mandela Foundation, a Brand South Africa partner and long-term stakeholder. Brand South Africa, the official marketing agency mandated with managing the image and reputation of South Africa for global competitiveness.

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FOCUS ON Madagascar: Emerging Into The Investment Landscape

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With an immense wealth of natural resources, Madagascar is poised for prosperity and ready its investment opportunities to be discovered.

The world is looking at us with a different perception. Madagascar has regained its notoriety on the international stage because we have a company project, we have a vision, we have dynamic and determined leaders

H.E. Andry Rajoelina, President of Madagascar

Madagascar is the fourth largest island in the world, making it larger than Spain, Thailand, Sweden and Germany, with a population of 26.2 million–more than Australia, the Netherlands and Greece. Thanks to its largely undisturbed ecosystems, Madagascar is also one of only 17 countries that is considered “megadiverse” by Conservation International. Overwhelming with natural beauty, flora and fauna, as well as natural resources, Madagascar is quickly coming onto the scene as an investment paradise.

 Madagascar is poised to penetrate the investment landscape even further with the implementation of the Initiative for the Emergence of Madagascar (IEM). His Excellency President Andry Rajoelina has ignited a nationwide plan to improve 13 crucial sectors that will usher Madagascar into even more economic prosperity. Among the plan’s specifics are specialised attention to the island’s main industries, mining, tourism and agriculture, as well as measures to aid in the facilitation of foreign investment and job creation.

With all the unique biodiversity that the island has to offer, it is no surprise that tourism is a major industry in Madagascar. Not only does the country rank number one in Africa with 90% in biodiversity but Madagascar also boasts over 5,000 kilometres of maritime coasts and healthy oceans and registers about 280,000 annual tourists. As this number is steadily increasing, President Rajoelina and his administration have focused more attention to the tourism industry to spur the economy and create jobs. The annual tourism growth is 20% and offers over 640,000 jobs, about 11% of total employment and 13% of overall GDP. Madagascar’s natural beauty is an alluring asset to the economy.

            The abundant natural resources in Madagascar make it a haven for many industries, especially the mining sector, offering great investment opportunities. Mining is an important economic sector, where small-scale and artisanal mining alone generates 1.5 million full-time and seasonal jobs for locals in the country, proving that the communities are one of the mining industry’s greatest assets. Conservation of Madagascar’s unique biodiversity is a top priority in the mining sector, as well. As a diversity hotspot, the sector works with local communities to define sustainable ways to make a living and harvest natural resources.

The Initiative for the Emergence of Madagascar also closely focuses on the energy sector as it moves forward. The IEM places new energy policies at the forefront of the administration as they seek an electricity access rate of 70% and further implement renewable energy resources through hydro, solar and wind power. The potential of Madagascar in terms of renewable energy has been detailed: it is immense. The future is headed toward an energy transition through a hybridisation strategy based on the locally and naturally available potential and a financially viable “pay as you go” system to overcome the difficulties in the short and medium-term.

The technology sectors of Madagascar are also expanding at an incredible rate. Madagascar now boasts the second-fastest internet service in Africa, which is a great asset for telecommunications companies such as NextHope. Tsilavo Ranarison, CEO of the company, speaks of Africa’s success and potential in the telecom sector: “The growth of Africa on the technological level is unavoidable. We will not stop innovating, just like any other company, so that we can be the best. We think that in the future we want to be a skill centre for the whole continent. We want to be a skill centre for IT expertise.”

In other sectors such as agriculture, Madagascar is the world leader and largest exporter of vanilla, and the sector holds immense opportunity for the potential investor. The agriculture sector represents 40% of GDP and 80% of jobs in the active population. The country is also leading in cocoa production, where Malagasy cocoa is considered to be of exceptional quality. The fertile landscape contains over 36,000,000 hectares of arable land and the favourable climate creates various agricultural and farming opportunities. In an effort to create jobs, nurture the agriculture industry and guarantee food security, the administration is focusing on a modernisation of the sector that uses innovative techniques while respecting the environment. This transformation of agriculture will only be possible with the professionalisation of the sector.

Not to mention, Madagascar exhibits incredible opportunity in the oil sector, as well, with the development of the Tsimiroro field. Madagascar Oil is dedicated to an expansion project which will contribute 100,000 barrels per day of oil production, increasing revenues by roughly US$2 billion per year. Russell Kelly, CEO of Madagascar Oil, says, “This will have a huge impact on the economy. Tsimiroro is one of the world’s largest oil developments at the current time. Future is looking very good. The resources are there. It’s only about getting them out of the ground and into the market. I see this emerging East Africa economy developing, and it makes sense for us to develop it and get our oil into East Africa, which is a huge market.”

            Madagascar is a haven of investment opportunities with ample resources, strong sectors and a predominantly young population where 70% of the population is under the age of 25. Matthieu Mace, CEO of MVola, says, “Madagascar is a young country. Our human resources are good; Malagasy people are very resilient. We speak very good French, and people are very well educated. Under the guidance of President H.E Andry Rajoelina and the Initiative for the Emergence of Madagascar, the country is creating an attractive business environment. Various regulatory reforms and public investments in infrastructure, as well as significant public and private investments in infrastructure, such as roads, ports, airports, telecommunication and energy, have reduced the costs of doing business. Access to many markets and strategically located to facilitate trade agreements and the exportation of goods and services through international business. With the current extension of the port of Toamasina in the East and the construction of Port d’Ehoala in the South, Madagascar provides world-class facilities for transportation of goods. As a peaceful and stable country, Madagascar is welcoming to investors to energise an inclusive and sustainable economic transformation.

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VIVO CEO IS A DYNAMIC LEADER FOR THIS INNOVATIVE GLOBAL BRAND

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May 2020 — Six months ago the vision for vivo in South Africa was just beginning to roll out. Launched in December 2019, the innovative mobile technology brand entered the market with two easy to handle, high spec, well priced phones, the Y11 and Y91C.

The decision to enter, however, has been a long time coming. It made sense for vivo, the world’s fourth largest cell phone brand with over 300million users globally, to enter the local market, where currently it’s already estimated half the population use smartphones.

“vivo plans to provide South African consumers with a user experience beyond expectations through technology and innovative, trendsetting products,” says Jeff Cao, vivo SA CEO. “Within three years,  the company plans to sit in the top tier segment of cell phone brands in SA.”

Jeff Cao, vivo SA CEO

Cao, a young, dynamic businessman is deeply invested in the vivo brand, having joined the company as an intern when it launched in 2011.

“My career started with vivo,” he says. “I witnessed the changes in the industry and the growth of vivo as a brand.”

Launching in South Africa brings a whole new set of challenges and Cao is motivated by this, saying: “The biggest challenge for me is to learn the culture and the  consumer demand of the South African market from scratch. I believe that as long as we adhere to the concept of “More Local and More Global”,  all challenges are only a matter of time.

“I believe in changingwhat is changeable, accepting what is mutable, and using wisdom to tell the difference”.

In his time at vivo Cao managed the Thailand launch and ran that office for more than five years, ensuring he has an innate knowledge to ensure the vivo brand becomes more localized and in line with the prefereces of the South African consumer, while maintaining the core values of technology and innovation.

Globally vivo has nine R&D centers around the world, five production bases and a total 80% of staff engaged in R&D work. “This level of commitment to innovation ensures the vivo experience keeps evolving,” explains Cao.

Cao believes in immersing the brand into South African society by fulfilling corporate social responsibilities through the #VIVOCARES initiative, proving that vivo is not just a smartphone brand but also a brand that invests in its community: “vivo came with the dream of building an international first-class brand for South Africans- and we will pursue that dream.

An insatiable demand for 5G on a global scale has seen vivo emerge as the leader in this area, being one of the only companies with a mid-range 5G smartphone on offer. This product is set to launch in South Africa in the second half of 2020.

“We envisage that by 2023 when young people in South Africa think of mobile phones they think of vivo.”

For more information and interview requests please contact [email protected]

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