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08 March 2024

HSRC survey results reveal dynamics of innovation in SA business sector

Human Sciences Research Council (HSRC)

Pretoria, Thursday, 7 March 2024 – Innovation-active South African businesses have better access to external knowledge and are more integrated into global markets, according to results from the latest round of the South African Business Innovation Survey (BIS).

The survey found that during the 2019 to 2021 period, 62% of SA businesses took scientific, technological, organisational, financial, or commercial steps aimed at realising an innovation.

Training emerged as the most common innovation activity for 47% of innovation-active businesses, followed by software and database activities (29%), and marketing initiatives (25%).

Of the employees involved in these innovation activities, only 38 in 100 workers were female and 62 in 100 were African. “There remains significant scope for businesses in South Africa to undertake innovation activities that result in novel innovations, and do so in an inclusive manner,” says the HSRC’s Dr Amy Kahn, who led the Business Innovation Survey.

“In South Africa, where we face multiple challenges, a more innovative business sector can contribute to productivity and business resilience as well as job creation, improved working conditions and quality of life.”

Among these innovation-active enterprises, 37% introduced both product and process innovations, while 23% had only product innovations and another 23% only process innovations. The remaining 17% of innovation-active businesses either did not have innovations or abandoned their innovation projects by the end of 2021.

Among advanced and emerging technologies, ‘Internet of Things’ technologies were most widely used or developed by 80% of all innovative businesses.

The survey report, prepared for the Department of Science and Innovation by the HSRC’s Centre for Science, Technology and Innovation Indicators (CeSTII), provides new evidence for policymakers to foster business innovation, and offers new insights for business leaders and industry associations regarding the innovation landscape in South Africa.

Innovation barriers and outcomes

“The innovation situation for all South African businesses should concern us, including the reasons why firms do or do not innovate,” says CeSTII research director, Dr Moses M. Sithole.

High costs were a significant barrier to innovation for 27% of all businesses, the survey found, as well as too much competition (25%) and lack of funds (24%).

A range of innovation outcomes were reported by innovative businesses.

“Product and process innovations tended toward quality improvements, including enhanced working conditions, product quality, and overall quality of life and well-being, rather than cost-related outcomes,” says Sithole.

Deeper insights into SA business innovation practices

The BIS report delves into the distinct innovation practices of a wide range of South African businesses.

“The analysis conducted in this round of the Business Innovation Survey takes us significantly closer to understanding the South African business innovation practices that really shift the needle. This informs how we should design support for greater business innovation in our country,” says executive head of CeSTII, Dr Glenda Kruss.

For example, the survey highlighted that businesses without formal innovation processes, such as R&D or patenting, and which were also not collaborating with external entities, were more likely to abandon their innovation projects.

Companies with the capabilities to develop their innovations in-house and had more novel product innovations had the highest turnover in 2021.

Also, businesses more connected to global markets and with higher product innovation novelty held greater intellectual property rights.

“A fine-grained understanding of the patterns of innovation exhibited in South African businesses enables us to build the capabilities suited to South Africa’s context and its challenges.”

Click here to access the results of the South African Business Innovation Survey 2019-2021.

Click here to access the full suite of survey outputs.

Human Sciences Research Council (HSRC)