BUSINESS: Open Innovation a Top Priority for SMEÂ’s
Recent Gauteng Business News
Open Innovation has been internationally quoted as one of the key drivers in business success for companies suffering the delayed effect of the global financial crisis. Most recently, US President Barack Obama cited innovation as a key requirement to boost the American economy. Willie Krause from IQ Business, the leading independent management consulting firm in South Africa, says that innovation is especially relevant for small-to-medium sized enterprises (SMEs) in South Africa. Â“Given that approximately 80 percent of the formal business sector in South Africa can be classified as SMEs or micro enterprises, itÂ’s critical to the economic health of our country to identify processes such as open innovation to support these operations.Â”
Open Innovation is described as the method of exploiting new ideas to create value through new processes, products or services. Organisations can follow a closed innovation process where all innovation is performed within the boundaries of the company, or through an open innovation process where they bring in ideas or technologies from outside of the organisation or transversely, where they out-license or sell their ideas or technologies to other organisations. Â“Open innovation can provide exciting opportunities for smaller businesses which might not have the resources to perform extensive research and development across the value chain,Â” continues Krause.
Why SMEÂ’s Would Rather Use Open Innovation
SMEs are ideally suited to open innovation due to their entrepreneurial nature, decision making speed and flexibility due to their smaller size. With the benefits of open innovation come a few challenges, warns Krause: Â“Companies should be aware that complications do exist around intellectual property management and the costs can be high if proper research and negotiation is not undertaken at the outset. It is important to seek advice and guidance from professionals in this regard prior to starting the process.Â”
Eyeslices a South African Open Innovation
Krause uses South African company eyeSlices as a leading example of innovation. After obtaining exclusive licensing rights to polymer technology developed by the South Africa Council for Scientific and Industrial Research (CSIR) and further developing the technology, eyeSlices created a unique cryogel eye care product which revolutionised the cosmetics market. EyeSlices subsequently received numerous awards for innovation and entrepreneurship under the competent leadership of CEO Kerryne Neufeldt. The company is South African based, but boasts distributors in 14 countries such as Mexico, Australia, Dubai, Greece and the USA.
Â“Open innovation is in many respects an untapped opportunity for South African business and I think every organisation can benefit from new and fresh perspectives on their business models and approach,Â” concluded Krause.
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