CASE STUDY: REGIONAL OPEN INNOVATION PLATFORM PILOT PROJECT

www.oiregionalconnect.com

ACKNOWLEDGEMENTS

On behalf of the Regional Connect Project Team, the Research Institute for Innovation and Sustainability (RIIS) extends its appreciation to the members of the Project Team, and all stakeholders who participated in making this pilot project a success, including all challenge owners and solution providers.

Project partner institutions include RIIS in South Africa, the University of Namibia (UNAM) in Windhoek, Namibia, and the National Technology Business Centre (NTBC) in Lusaka, Zambia.

Funding partners include the Ministry of Foreign Affairs of Finland, via the Southern African Innovation Support Programme (SAIS).

Thanks also to Maggie Lombard, THRIP and the North-West University Innovation Support Office for supporting the research, publication and dissemination of this Case Study and Hailey Edy for Visual Design.

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LIST OF CONTENTSSUMMARY & BACKGROUND..............................................................................................

ECONOMIC & INNOVATION LANDSCAPES OF PARTICIPATING COUNTRIES............2.1 Namibian Economy..........................................................................................................2.2 Namibian Innovation Landscape.....................................................................................2.3 Zambian Economy.............................................................................................................2.4 Zambian Innovation Landscape......................................................................................

PROBLEM/OPPORTUNITY.....................................................................................................

SOLUTION..............................................................................................................................4.1 Open Innovation...............................................................................................................4.2 OI Regional Connect Solution Exchange...........................................................................4.3 Business Model.................................................................................................................4.4 Methodology.....................................................................................................................4.5 Stakeholder Engagement..................................................................................................4.6 Governance.......................................................................................................................

RESULTS..................................................................................................................................5.1 Challenges Posted.............................................................................................................5.2 Technology Offers............................................................................................................5.3 Benefits & Opportunities...................................................................................................5.4 Challenges/Difficulties......................................................................................................5.5 Lessons Learnt...................................................................................................................

RECOMMENDATIONS...........................................................................................................

CONCLUSION.......................................................................................................................

References...............................................................................................................................

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SUMMARYThe Southern Africa Innovation Support (SAIS) programme was initiated and is funded by the Finnish Foreign Affairs Ministry to help guide innovation in southern African countries in an endeavour to encourage economic and social development. A Regional Connect (RC) project covering Namibia and Zambia was piloted to build and test an open innovation mediation model across the region. Open innovation (OI), a term coined by Chesbrough in the early 2000s, takes place when organisations (‘seekers’) search externally for innovative solutions to mostly technological problems. The OI RC mediation model undertakes to link seekers of innovative solutions to providers thereof through a networked model. Within the context of emerging national innovation systems in both countries, this case study highlights the challenges, opportunities and recommendations around implementing an OI RC model within the

BACKGROUND

region. An effective RC model could potentially enhance knowledge, resource and productive exchanges across the region, which should have a positive effect on its economic development over time. The RC model should also help stimulate innovation and an understanding of OI as such in its quest to build linkages across the triple helix (government-industry-academia) within the region. The aim is not only to inspire innovation but also to aid the uptake and commercialisation of ideas through partnerships and capacity building. As such, RC aims to fast-track the innovation process by stimulating networks and enabling partnerships with previously unknown innovators. Many factors can contribute to the sustainability of such a model, including the status of national innovation systems in partner countries, stakeholder strategy and engagement, and resource availability and capacity.

The SAIS programme was initiated about four years ago to guide innovation in southern Africa. The intention of the programme is to positively affect the economic and social growth of southern African countries. The assumption is that open innovation (OI), as an innovation management approach, will contribute towards a range of beneficial outcomes for the Namibian and Zambian economies and societies. Open innovation, a term coined by Chesbrough (2003), is when organisations incorporate external technologies into their innovation process through alliances and partnerships.

The SAIS programme leverages networks, institutions and individuals to steer innovation capacity towards product, service and social innovation. The key partners in the programme include Botswana, Mozambique, Namibia and Zambia. SAIS aims to work in partnership with these southern African countries to enhance their respective innovation systems.

The Regional Connect (RC) project, covering Namibia and Zambia, is a pilot project funded by the SAIS programme and key partners to build and test an OI mediation model for southern

Africa. The intention at the onset of the project was for Mozambique to be a knowledge partner as well; however, their status was changed to that of ‘observer’ as a result of a Steering Committee decision during February 2014, which reduced Mozambique’s involvement in the project considerably.

The OI mediation model endeavours to link seekers, i.e. organisations looking for innovative solutions to problems, to providers of such solutions, through an OI mediation platform. The long-term intention is to develop OI as a sustainable building block for economic growth across the region and also to expand the RC project across all southern African countries to nurture economic growth and sustainability.

This paper covers a case study of the RC project, with the aim to highlight challenges, successes, lessons learnt and recommendations to support the replication and sustainability of the programme in other southern African countries. The economic and innovation landscapes of the two participating countries will be highlighted as background to the case study.

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2.1 NAMIBIAN ECONOMYThe Namibian economy is at the mercy of the extraction and processing of minerals for export. The rising cost of mining diamonds due to the increasing need to do so from the sea is therefore somewhat concerning. In effect, mining accounts for only 11.5% of the gross domestic product (GDP), yet it provides more than 50% of foreign exchange earnings (Index Mundi, 2014). Still, the real GDP growth rate remained stable at 4.3% in 2014 and is estimated to increase slightly to 4.5% in 2015 (Coface, 2015). Namibia is also the fourth-largest producer of uranium in the world. Namibia’s economy is heavily reliant on South Africa, seeing that the Namibian dollar is pegged one-to-one to the South African rand and, additionally, Namibia gets 30% to 40% of its revenues from the Southern African Customs Union (SACU).

Namibia’s unemployment rate decreased to 27.4% in 2012 from 37.6% in 2008. The youth is the most affected by unemployment, as an estimated 48.5% of the population aged between 20 and 24 are unemployed, and 33.6% between the ages of 25 and 29 (Honde & Odhiambo, 2014). Approximately 16.3% of the labour force work in agriculture, 22.4% in industry and 61.3% in services (Central Intelligence Agency, 2014b).Namibia is not only blessed with gas resources and extensive minerals such as diamonds, uranium and copper; it also has significant tourism potential, a good transport infrastructure and political stability.

Namibia’s biggest risks to medium-term growth include the weakening of global demand for mineral exports and unfavourable weather conditions. These are having a detrimental effect on Namibia’s agriculture as well as on the closely linked South African economy.

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NAMIBIA AND ZAMBIA

ARE PARTNERINGCOUNTRIES

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2. ECONOMIC & INNOVATIONLANDSCAPES OF PARTICIPATING COUNTRIES

2.2 NAMIBIAN INNOV ATION LANDSCAPEThe Government of Namibia developed a National Research, Science and Technology Policy in 1999, motivated by the rise of the global knowledge economy and the acknowledgement that innovation can play a positive role in economic development (Matengu, 2011). The policy was seen as a vehicle meant to transform Namibia’s economy into a knowledge-based one. Considering the large workforce in services of 61.3% (Index Mundi, 2014), there are certainly opportunities to cultivate a culture of innovation across the knowledge economy to uplift this sector. Add to this the need to mitigate the risk of an over-dependency on natural resources, and it can be concluded that it is essential to develop new innovative products and services.

Policies aimed at national innovation are rooted in five-year plans known as national development plans (NDPs), which are seen as instruments for implementing policies and programmes to achieve Vision 2030 – to transform Namibia into a prosperous and industrialised country (Asa, Prasad & Htay, 2013). There have been challenges in implementing policies over the last decade, though. As of early 2015, Namibia has achieved 25% and less of its national science, technology and innovation (STI) policy objectives and priorities (Iizuka et al., 2015). The objectives and priorities include areas such as research and capability development, human resource development, building networks of researchers, ICT and infrastructure development, enhancing institutional capacity, and strengthening linkages with the private sector.

In addition, Namibia does not have a formalised innovation policy per se in place as yet, although a science and technology (S&T) policy was developed back in the late nineties; a national programme for research, science and technology, and innovation (NPRSTI) is underway; and a draft innovation framework policy was developed in 2011 (Iizuka, Mawoko & Gault, 2015). The lack of a formalised intellectual property (IP) policy also slows down the development of an innovation culture due to the perceived risks associated with IP exposure.

An innovation landscape can be driven through three tiers: the top tier focuses on the establishment of laws, legislation and policies; the second tier on institutional support of the innovation systems; and the third tier on sectoral support to stimulate industry innovation efforts.

SAIS (2013) noted that Namibia’s innovation landscape is driven by the top tier, and this is corroborated by the progress made regarding STI policy objectives and priorities, as covered above.

The University of Namibia (UNAM) and the Polytechnic of Namibia have facilitated the development of innovative capacity, with a focus on forging collaborative linkages between industries and academia, and on building access to business networks and partnerships.

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2.2 NAMIBIAN INNOVATION LANDSCAPE 2.3 ZAMBIAN ECONOMYZambia’s economy has shown robust growth in the past few years: 6% in 2013 and again in 2014. Nevertheless, the economy is sensitive to agricultural risks such as poor agricultural harvests, and commodity risks such as fluctuating commodity prices, especially copper prices (Mukanga, 2015). Copper contributes approximately 70% to Zambia’s export earnings (Rasmussen, Munkoni & Lwanda, 2014). On a sectoral level, in 2013 the agricultural sector contributed 19.8% to GDP, while services and industry contributed 46.5% and 33.8% respectively (Central Intelligence Agency, 2014b).

Despite Zambia’s rich resources alongside solid growth, though, poverty remains high at 60% (The World Bank, 2014), albeit lower than the 75% experienced between 2007 and 2011 (UNICEF, 2013). This figure could further worsen due to a likely slow-down in global growth under the influence of the Eurozone’s stagnation as well as China’s reduced growth, which could negatively affect copper prices. Changes to the mining fiscal regime announced in 2014, which introduced a Mineral Royalty Tax, may also put financial pressure on mining companies (Zambian Economist, 2014).

Zambia’s key risks include its dependence on global demand for copper; its vulnerability to fluctuations in commodity prices; and the detrimental effects that poor agricultural production have on the country. In effect, at least 85% of Zambia’s labour force is employed in the agricultural sector.

It would be beneficial for Zambia to become more competitive and create more jobs through innovation, which calls for the successful implementation of innovation policies, procedures, funding and networks to help stimulate innovation across the country. There is therefore a need to cultivate an innovation culture, as the creation of innovative start-ups could have a ripple effect throughout the economy in terms of job creation and improving the daily lives of the people.

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“2.4 ZAMBIAN INNOV ATION LANDSCAPEThe Zambian innovation landscape has been reformed over the years since the development of its first explicit science and development policy in 1996 (NEPAD, 2012). In 2008, Zambia commenced with a review of this policy. Almost seven years later, the revised policy is still awaiting cabinet approval, though. The country’s science, technology and innovation landscape includes institutes from line ministries, public and private research and development (R&D) institutions, universities and other entities that support science, technology and innovation. In short, the proposed framework includes the following levels: the Science and Technology Innovation Council (STIC); line ministries; STI agencies; and R&D and higher education institutes.

The National Technology Business Centre (NTBC) is a statutory body which has the mandate to promote innovation, commercialisation and technology transfer in Zambia. The NTBC will also support the sustainability and potential replication of the pilot within Zambia’s innovation environment (SAIS, 2013).

The main challenges with innovation in Zambia include the following: duplication of effort, poor utilisation of resources, low impact of R&D on society and a lack of linkages (NEPAD, 2013). In order to stimulate innovation and increase the pipeline of commercialised innovations, the National Technology Business Centre (NTBC) was chosen as a partner institution to implement the RC programme. It made sense for the NTBC to be involved in the RC programme in Zambia in view of its focus on linkages and networks to stimulate innovation and its attention to the commercialisation of innovative ideas, with the resultant technology transfer. The RC process of network development proceeds from the top down, whilst the innovation promotion section of the NTBC follows a bottom-up approach (C. Chungu, personal communication, 5 February 2015). Therefore, the two approaches complement one another and build on the innovation foundation that the NTBC has already developed. The SAIS programme is aimed at augmenting Zambia’s efforts to increase innovation in Zambia. This includes current efforts to identify innovation ideas through development centres across Zambia, along with funding (e.g. a technology development fund) to help develop ideas further.

The NTBC supports the commercialisation process but also develops linkages (top-down), through RC, as well as bottom-up to facilitate the aforementioned processes.

Notwithstanding the continued efforts to stimulate innovation, however, Zambia still has an immature innovation landscape with an inadequate STI base, which is reflected in its lack of innovation output (SAIS, 2013). SMEs do not participate much in the National Innovation System (NIS); nor is there much private participation in R&D. All things considered, Zambia still has an underdeveloped innovation culture and low levels of networking amongst innovators (Hahn, Müller, Meier zu Köcker, 2010).

Much work also needs to be done to create an enabling environment for innovation, such as electrification for poor communities. According to Chungu, Zambia has already made some progress in this regard with its rural electrification programme, which will create a footing for technology transfer.

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3. PROBLEM/OPPORTUNITYBoth Namibia and Zambia are exposed to enormous economic risks, as outlined above, which require significant focus on further development and the implementation of an NIS in each of the countries. The successful implementation of an innovation policy; the development of research and capability, and of human resources; the enhancement of institutional capacity; and the strengthening of linkages across the triple helix will all contribute to an effective NIS that can help combat the economic risks and grow the economies of each.

There is also an opportunity for interaction between countries within the southern African region so as to enhance knowledge, resource and productive exchanges among them, which in turn should promote economic development. A regional platform provides an opportunity for linking national policies to innovative activities within the southern African region (Raunio, Kautonen & Saarinen, 2013).

A regional innovation system can be seen as a system of multi-level governance, knowledge and productive exchanges with external stakeholders, nationally and internationally (Cooke, 2008). Knowledge is exploited and generated across the sub-systems (e.g. countries that form part of the regional system). Interactions between the sub-systems then facilitate knowledge transfer among them and enhance flows for economic development. In fact, “regional knowledge capabilities”, named so by Cooke (2008), are associated with the concept of dynamic capabilities at a regional level, which can facilitate knowledge transfer and hence nurture economic development.

The creation of a kind of regional bridging model also creates an opportunity to escalate the model to a more global level, thus creating a stepping stone to link the respective national innovation systems within the regional model with the most relevant innovation systems globally. An RC model could be a step towards global ties to stimulate economic development within the southern African region.

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CREATING AN OPPORTUNITYFOR INTERACTION WITHIN THE

SOUTHERN AFRICAN REGION

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4. SOLUTIONIn order to mitigate economic risks to some level and leverage the regional opportunities noted, a regional OI solution exchange was established. The aim of the project was to conceptualise and develop a managed regional OI platform where organisations and institutions could post challenges to a network of innovators, including small businesses and individuals. This exchange would connect seekers of challenges (from within the region) to providers of innovative solutions (from across the globe), as illustrated in Figure 1. Competitiveness on a regional and national level is not merely driven by individual companies but more and more by the innovative activities of entire industries. On average, innovative organisations grow faster and are likely to withstand economic crises better (Hahn et al., 2010). Therefore, stimulating linkages across the region would nurture an innovation

culture, which would foster more innovative activities by organisations and advance the economy over time.

The Research Institute for Innovation and Sustainability (RIIS) is the lead technical partner who set out to lead and guide the implementation of the project alongside key partners that include the University of Namibia (UNAM) and the National Technology Business Centre (NTBC) in Zambia. The UNAM is responsible for championing the solution exchange by providing institutional support and fast-tracking the platform into the national innovation ecosystem in Namibia; and the NTBC is supporting its sustainability and the potential full-scale replication of the pilot within the Zambian innovation environment (SAIS, 2013). An overview of the OI concept followed by the RC model is covered next.

Figure 1: Conception model of Regional Connect

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SMME’s

COMPANIES & MULTINATIONALS

TRADE ASSOCIATIONS

REGIONAL GOVERNMENT

TARGET INDUSTRIES

GREEN PRACTITIONERS

INCUBATEES

SOLUTION SEEKERS

UNIVERSITIES

RESEARCH INSTITUTES

CORPORATIONS

INDUSTRIES

SMME’s, ENTREPRENEURS, INVENTORS

REGIONAL STATE GOVERNMENTS

GREEN PRACTITIONERS

GARAGE OPERATORS

INCUBATEES

SOLUTION PROVIDERS

NEUTRAL CATALYST PARTNERSHIP

COMMON WORKSPACE/MIDDLE VALUE

LEVERAGING BROAD PR MECHANISMN ASRECRUITING

STRATEGY TO CONNECT NEEDS & SOLUTIONS

CAMPAIGN

MEDIA EVENTS/AWARENESS

PROACTIVE SEARCH

MEDIA PARTNES

CORPORATE CAMPAIGNING

EMAIL/LIVE OUTREACH

SOCIAL MEDIA

PRESS RELEASES

THOUGHT LEADERSHIP

4.1 OPEN INNOV ATIONIn the early 2000s, Chesbrough (2003: XXIV) coined the term “open innovation”, defining it as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand markets for external use of innovation, respectively”. Organisations may source actual innovations, knowledge, technical inventions, market knowledge, innovation components or other information in support of the innovation process of the organisation (Bogers & West, 2012). OI is not an entirely new concept, considering that external knowledge has been incorporated into innovation processes for some time (Cohen & Levinthal, 1990); yet the contribution of external resources has increased and they have become more purposive, according to Chesbrough, who demonstrates a paradigm shift from closed (i.e. only internal to the organisation) to open innovation.

Traditionally, closed innovation processes would rely mostly on internal innovation resources (such as R&D or strategy /marketing departments) to produce innovations, and therefore would invest in their internal innovation capital, which could include human resources, laboratories and other innovation resources, in the expectation of innovations and associated returns. For closed innovation to occur successfully, it requires internal control: organisations must generate their own ideas and then develop, build, market, distribute, service, finance, and support these ideas on their own. This means the organisation can control the entire innovation process, from inputs through to process and outputs, in an attempt to control the eventual returns. Yet closed innovation could result in organisations duplicating efforts to solve problems which have been, or could be, solved elsewhere in the world – in another industry even. Over the last decadeor more, organisations have started to practice a more open form of innovation by not merely relying on their internal innovation capital but looking externally for innovations to solve problems or leverage opportunities.

There are various channels through which organisations can practise OI, including directly contracting research organisations (such as universities); raising electronic requests for proposals to solve problems (a tender process or innovation competitions); off-shoring; and crowdsourcing (Howe, 2008). In terms of innovation, the latter means to request ideas from crowds of people, generally in the form of an online competition that is broadcasted to

relevant communities. Other channels for OI include consulting organisations and entering joint ventures (Bingham & Spradlin, 2011).

At least a decade before Chesbrough came up with the term “open innovation” (OI), scholars had argued the importance of having the ability to exploit external resources as an important constituent of innovative performance (Cohen et al., 1990). Some core principles of OI originate from the realisation that “not all of the smart people work for us so we must find and tap into the knowledge and expertise of bright individuals outside our company” and “we don’t have to originate the research in order to profit from it” (Chesbrough, 2003: 38). There has been a paradigm shift in the commercialisation of knowledge from “closed innovation” to “open innovation”.

Organisations and intermediaries pursuing OI often leverage focused innovation through innovation contests; an externally focused innovation contest can be defined as “a (web-based) competition of innovators who use their skills, experience and creativity to provide a solution for a particular contest challenge defined by an organizer” (Bullinger, Neyer, Rass and Moeslein, 2010: 291). A web-based platform enables seeker organisations to broadcast challenges to online communities, thereby drawing out potential innovators that are able to solve problems or leverage opportunities. In addition to this, a web-based platform becomes a means for smaller organisations or research institutions to showcase their innovations in order to tap into different markets or attract partnerships to take immature products to fruition. Hence, a web-based OI platform is an enabler of unknown innovators, pulling them together across different spheres and industries to cross-solve problems, whilst simultaneously allowing them to attract potential seekers for their innovations of different maturity levels. It thus allows for demand pull and push to enable growth in southern African countries such as Namibia and Zambia.

The key conditions that encourage organisations to pursue OI include the following: knowledge capital – availability of knowledge throughout society; a highly educated and mobile workforce – mobility facilitates spillovers betweenorganisations; and good access to finance – especially for small enterprises that need finance to realise their innovative ideas.

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“4.2 OI REGIONAL CONNECT SOLUTION EXCHANGEThe OI Regional Connect Solution Exchange platform (Refer to Figure 2) – RC in short - was positioned as a neutral catalyst to facilitate and promote linkages between multi-helix partners, including academia, industry and government.

As depicted in Figure 2, solution seekers are private organisations, state-owned enterprises (SOEs) or government entities from within the region that put forward challenges to the RC that can be solved by innovators, including universities, research institutions, SMMEs or individuals from anywhere in the world. By reaching a global audience of innovators, inventors and thought-leading companies, RC creates connections and relationships that would never have existed otherwise. The pilot programme also created a showcasing facility that facilitates market access for technology entrepreneurs.

In the main, the RC pilot aimed to demonstrate the value of and a business case for using OI as a vehicle to fulfill the objectives of the

SAIS programme, which is to guide and facilitate innovation in southern Africa so as to nurture economic development and reduce poverty. The RC aims to stimulate regional economic growth by:

Enhancing the innovation capability of local business, thus growing the local economy and job markets – seekers are connected to solution providers through the RC platform;Creating and/or improving connections between entities within the innovation landscape, e.g. universities, government, and local science, technology and engineering communities;Creating access to global OI communities and thus connecting local companies to the latest technology offerings in the world;Showcasing technology offerings from local entrepreneurs, which stimulates SMME growth, thus boosting the economy; andCreating a platform that provides inclusion, support and visibility to all innovation players in the region and beyond.

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Figure 2: Open Innovation Regional Connect Solution Exchange

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SOLUTION SEEKERS SOLUTION PROVIDERS

SUBMIT INNOVATIVE RESPONSES

PUBLISH INNOVATIONCHALLENGES

ACTIVELY MEDIATEDBUSINESS TRANSACTION

PRIVATE COMPANIES SOE’s OR GOVT

DEPARTMENTS ETC

UNIVERSITIES, RESEARCHINSTITUTES, SMME’s, LOCAL COMPANIES &

INDUSTRIES ETC

4.3 BUSINESS MODEL

4.4 METHODOLOGYThe RC draws on an established process of RIIS that drives the exchange through the C4 methodology, as depicted in Figure 4. A key team member of the RC project described the methodology as “methodical and systematic” and felt that it worked well for its intended purpose (S. Namwandi, personal communication, 5 February 2015).

The resource team continues to play an active role in making connections with funders, markets and expertise to support the development and implementation of the innovative solution.

activities towards building customer relationships through the distribution network. During the pilot project, the unit price per challenge was included in the RIIS professional fees, which effectively provided sponsoring for the challenges.

The business model is illustrated in Figure 3 below. The value proposition (offer) that RC provides, at the highest level, is to stimulate growth and competition within the region. This offer is supported by core capabilities, partner networks and

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CHALLENGE:The challenge is defined by a select team of experts who are familiar with the challenge topic.

CONNECT:The network is developed and expanded upon and the challenges promoted to potential solution providers.

CONSIDER:A dashboard approach is followed to test whether the potential solution fulfils the defined need.

COMMIT:When a potential solution provider has been identified, the normal procurement process of the seeker organisation is followed to make a deal between the solution provider and the seeker.

Table 1: C4 Method

CORE CAPABILITIES

STIMULATING LINKAGES - MANAGING OI -

PARTNER NETWORK

SAIS -UNAM -NTBC -

RIIS -

ACTIVITIES

SAIS PARTNERS -UNAM -NTBC -

RIIS -

CUSTOMER RELATIONSHIPS

- SEEKERS (organisations, government & institutions)

- PROVIDERS (SMME’s, universities,individuals, other entities)

- CONNECT PROVIDERS & SEEKERS - SHOWCASING- CULTIVATE CULTURE OF INNOVATION

DISTRIBUTION CHANNELS

- REGIONAL CONNECT PLATFORM - WORKSHOPS- NEWSLETTERS

STIMULATING GROWTH &COMPETITION WITHIN THE

REGION

SALARIES FOR OI MANAGEMENT & ADMIN PLATFORM COSTS

RIIS FEESOPERATIONAL FEES (workshops etc)

FUNDINGUNIT PRICE PER CHALLENGE WHICH SEEKER PAYS

COST STRUCTURE

REVENUE STREAM

INFRASTRUCTURE

OFFER

CUSTOMER

FINANCE

Figure 3: Regional Connect Business Model

4.5 STAKEHOLDER ENGAGEMENTStakeholder engagement and OI describe similar processes, considering that in both cases there is reach beyond boundaries, making it an explicit effort to gain access to essential information – whether it relates to stakeholders or innovations. Stakeholder engagement within OI processes is much more complex than stakeholder engagement within a closed project (Gould, 2012). The difficulty lies in the conflict between the benefits of collaboration and knowledge leakage. Hence, the essential linkages which are at the heart of OI may cause the organisation to lose control of information, whether it is information about the nature of the problem that the organisation is trying to solve which is revealed to the network, or confidential details about a solution. For OI to be effective, sufficient capabilities are required to enable the integration of external information into internal processes (Nonaka, 2007). Relationships are built through the stakeholder engagement processes. As such, concepts of stakeholder engagement are integrated with the OI process. So, information flows in both directions: to the outside to build networks, broadcast the problem and elicit the required information from the networks; and back into the OI internal processes to solve the problem or develop the network further. Thus, this process of engagement causes further engagement and so on. Stakeholder engagement should have a focus on accountability as well as on performance; as such, emphasis on relationship building supports a focus on value creation (Gould, 2012).

On the whole, it was noted during the interviews conducted for this case study that cultural differences between countries create difficulties in terms of stakeholder engagement. For example, in countries like South Africa, email is a common medium through which to engage with stakeholders on important issues, whilst in other countries, such as Namibia, emails are not seen to be as important as a face-to-face meeting. There are also language differences between countries to be considered during the engagement process. It was also raised that stakeholder buy-in is crucial, so stakeholders should understand the benefits of OI in detail. Chungu urged that stakeholders should form part of the benefit identification process, as this would enable buy-in. As such, stakeholder engagement is more than just an event; it is an intricate back-and-forth process. Big-brand institutions should be brought into the network first, which will then

have a positive effect on the recruitment of other organisations. The process should therefore be strategic in nature. Stakeholders should also agree on a common vision for the future of the region as well as on activities to enable this vision; the stakeholders should have overlapping objectives and perceived benefits. It is difficult to manage stakeholders across borders, as there are issues related to culture and language which could inhibit the establishment of trust in the programme (A. Ipangelwa, personal communication, 19 February 2015).

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4.6 GOVERNANCEThe project was structured according to three phases with associated milestones, as set out in Table 2.

A project charter was developed that set out the governance structures and the roles and responsibilities in detail. The project was managed by a core project team made up of representatives from UNAM, NTBC and RIIS. The project director in charge of the regional office was located at UNAM. RIIS was responsible for the execution of the project, and country representatives for providing oversight. The project team reported to the Project Steering Committee and consulted with stakeholder advisory fora which were established in each of the regional representative countries (Namibia and Zambia). This committee was not a decision-making body; rather, it was consulted and

informed in order to get wider stakeholder buy-in for the project and to raise public awareness. The project experienced challenges in accomplishing some of the milestones; longer “sales” cycles than expected were experienced when recruiting challenges. This was mainly attributed to a lack of OI awareness in the market.

Ipangelwa cautioned against the challenges associated with a misalignment of procurement procedures between the university and RC, which caused unnecessary delays in the implementation of activities. However, internal structural changes contributed to these misalignments, considering the related shifting of priorities and funding allocations. For this reason, it is vital that budgets should be committed and secured upfront, unaffected by impeding structural changes.

Table 2: Project stages

STAGES

Stage 1

Stage 2

Stage 3

DESCRIPTION

Definition and value networkThis stage dealt with the definition of the approach to be used for implementing the pilot and the measurement plan for monitoring and evaluation.

Building the online solution exchangeDuring this stage, the Regional Connect website was developed.

Implementation of the pilotThe final stage consists of the implementation of the pilot, following the C4 methodology. The technology showcasing also forms part of this stage, as do the close-out report and this case study.

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5. RESULTSThe project started in September 2013, and the results as of February 2015 are included in this study.

5.1 CHALLENGES POSTEDThe challenges deployed on RC consists of the following, in short:

Easy-to-use in-process royalty counting solution for integration with a stationary hydraulic vibrated block-making machine.Customised, state-of-the-art, automated pattern design solution, integrated with material-cutting, planning and optimisation solution.Reduced-wear, impact-absorbing spout liners for high-velocity, high-energy ocean sludge dredging application.Customised, flexible workflow and status-reporting solution for managing loan application process, and online interface between clients and the bank’s lending department.Environmentally friendly low-cost fuel from sawdust.

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These five challenges were posted on the RC platform (four from Namibia and one from Zambia) and elicited 74 potential solutions. At least 84% of the solutions came from the core industries of the respective challenge owners, while only 12% came from adjacent industries. SMMEs were mostly responsible for posting solutions for the challenges: 82% were submissions by SMMEs, with the just over 16% coming from large national organisations and only 1,4% from universities.

There was an interesting spread of solution providers location-wise, with only 3% originating from Namibia and 5% from Zambia; 65% in South Africa; just under 12% in the rest of Africa; and 24% internationally, including Poland, the USA, Germany, Italy, Netherlands, Finland the UK and China.

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Table 3: Responses by Respondent Type

The low percentage of solution providers coming from the local country of the challenge owner is indicative of the immaturity of the local innovation landscape, and possibly the fear of IP leakages. Both Zambia and Namibia are members of the African Regional Intellectual Property Organisation (ARIPO), which is an intergovernmental organisation for cooperation among African states in patent and other intellectual property matters. It was reasoned during the interviews that Zambian and Namibian innovators may be afraid to expose

their solutions to challenges, considering the perceived risk of IP exposure, especially since South Africa is not a member of ARIPO. Yet, it was mentioned during the interviews that the level of innovation amongst SMMEs is still low. Therefore, having so many international solution providers may create opportunities to match or partner up local SMMEs with international expertise through vehicles such as joint ventures or agency agreements, thereby fostering knowledge transfer to the region.

Table 4: Challenge Responses by Location

Table 5: Response by Industry

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5.2 TECHNOLOGY OFFERSThe regional platform supported a technology push or “technology offer” whereby innovators with unique capabilities could showcase innovative products and services to potential markets. Technology offers were mainly sourced through technology offer workshops held in the two countries, where the technology offer process and the benefits of promoting their products on the RC website were explained to invited SMMEs, inventors and researchers. A newsletter was also sent out to source technology offers. In addition, invitations were sent out on an ad hoc basis to invite potential innovators to showcase their products or submit innovative solutions to problems. It is evident, therefore, that eliciting offers and matching them with interested parties is a continuous process that requires a lot of effort and commitment from all stakeholders.

On the whole, eleven technology offers were published, of which six were recruited by the UNAM and five by the NTBC. This low number of offers can be attributed to the low level of innovation maturity in the respective countries, but it may also be indicative of a fear of exposing IP, considering Namibia’s lack of formalised IP laws and regulations, and both countries’ fear of exposure of IP to South Africa in view of its lack of membership status. Zambia has additional processes that support the showcasing of local inventions through its International Development Innovation (IDIN) network. The difficulty is that innovators are not always aware of the opportunities which the RC programme offers. According to Namwandi, there is a lot of “under the cover” innovative activities within Namibia, but inventors are not always aware of the need for their inventions and they are also fearful of losing IP when they do expose their creations. Finally, the innovation culture is also low in the respective countries, which means that SMMEs and citizens do not necessarily have the motivation or capabilities to innovate. Ipangelwa suggested that technology offers should only be launched once there are local results to showcase. She also recommended that there should be strategic positioning in the university to attract academics and students to take part by submitting technology offers. This will help alleviate some of the IP fears resident in academia. Due to the lack of OI awareness and IP fears, it is vital for the local project team to continuously follow up on potential offers and nurture innovators through the OI process.

“”

GIVING INNOVATORS THE

OPPORTUNITYTO SHOWCASE THEIRPRODUCTS/SERVICES TO POTENTIAL MARKETS

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”

5.3 BENEFITS & OPPORTUNITIESNamwandi felt that the project created a “fence for OI in Namibia”; by developing a frame of reference for OI in Namibia, it provided local stakeholders with a level of understanding of the scope of OI in the country and region. Namwandi also believed that the project cemented the way to formalise an effective, well-glued triple-helix structure.

According to Chungu, the NTBC has noticed an improvement in the technology transfer pipeline in Zambia, and the Regional Connect project would have a further positive effect by increasing the number of inventors that are noticed and that are supported to commercialise their innovative ideas in Zambia. In addition to this, existing technologies can be sourced from outside the borders of Zambia and brought into the country to fast-track growth and decrease the duplication of research effort. Ultimately, Chungu believes, this type of project will create awareness of, and increase, technology transfer, thereby stimulating economic development in the long term.

Ipangelwa affirmed that the project had a positive effect in terms of creating awareness of OI and, through the various programmes, linking the university to industries as well as to other players in the innovation space – both locally and globally. She also felt that the knowledge transfer to the UNAM team was an important foundation to build on further (A. Ipangelwa, personal communication, 19 February 2015).

Namwandi felt that the project also aided the fast-tracking of related innovation projects, such as the incubation centre that had been in planning for some time but had now been fast-tracked to open in early 2016.

The project furthermore fostered relationships between the project partners; both regional partners have broadened their opportunities by reaching beyond physical and geographical boundaries, across multi-helix stakeholders. These partnerships are continuing to evolve and include reaching out to stakeholders such as the UNDP and Femtech, as well as other platforms.

Challenge owners confirmed that the RC project allowed them to gather valuable information quickly and less expensively compared to the time and cost of using traditional channels, including R&D, and this greatly accelerated

the innovation cycle. Traditional channels do not provide the benefit of creating the deal-making opportunities which can be leveraged through the RC OI model either. The latter is achieved through greater access to ideas from diverse industries which can solve problems in other industries altogether. The model does this by creating a platform that can help identify technologies that are being researched, emerging, maturing or in decline. In summary, an OI RC model allows countries with poor R&D capabilities to leapfrog their competitors, as it is possible to source innovative and advanced solutions from anywhere in the world.

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5.4 CHALLENGES/DIFFICULTIESMost interviewees emphasised that the biggest challenge was the lack of fulltime resources for the project. In most instances, team members were allocated to the project on a part-time basis and still had to contend with their daily work pressures as well. This resulted in a lack of priority for the project in some cases. They all emphasized that the lack of fulltime resources was a major risk to the programme going forward.

Most interviewees also pointed out how the lack of OI awareness in the region slowed the project down. The lack of awareness of and knowledge about the OI approach across the region made it difficult to source challenges and technology offers. Even though the project closed off with 11 technology offers, there was very little interest in these offers per se; the number of offers was low, and interest in the offers was even lower. This may be an indication of a lack of awareness of OI, IP exposure fears, a lack of mature solutions and/or a lack of novelty and feasibility in the solutions showcased. It was reported that various rounds of revision had to take place, considering the delays in responses from technology offer owners, some of whom were difficult to reach.

Another difficulty was the management of and engagement with stakeholders internal and external to the programme, which has been covered already for the most part. The geographical distances between partner countries impacted the effectiveness of communication and meetings. It was mentioned during the interviews that meetings via Skype were challenging and furthermore that stakeholder fora lacked commitment. The team often had to resort to email and direct telephone calls, and as discussed earlier, emails often were not treated with any urgency. A major challenge experienced was the dependency on stakeholders to keep to expected timelines. This was exacerbated by the fact that the day-to-day priorities of partners fell outside the scope of this project. Furthermore, cross-border communication was a challenging process for most stakeholders in the project.

Essential ingredients for successful stakeholder engagement in this multidimensional and complex engagement model which stretches across many boundaries are the commitment and proactive engagement of all partners, which

were lacking in some respects.

Chungu stated that a foreseen challenge would be the sustainability of the model. Therefore, the development of a sustainability model is crucial for the project going forward. More than one interviewee asserted that the current structure should be reviewed. Some questioned the choice of the host country for the RC project.

Namwandi also stated that there was a lack of legislation in Namibia to back up the programme and an absence of existing structures that the programme can feed into, e.g. robust innovation funding vehicles, IP legislation, innovation policies and procedures, and an operational and well-oiled triple-helix model. However, Namwandi believed that this programme could help build structures for innovation and growth going forward by cementing the triple-helix model.

The budget arrangements created difficulties in that several currencies were involved, and the resultant complexity was further exacerbated by the difference in partners’ internal budgetary procedures and the allocation of funds from separate budgets.

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“5.5 LESSONS LEARNTNamwandi emphasized that OI training and thus knowledge transfer is fundamental to the programme but was stifled as a result of a lack of resources to transfer knowledge to their host structure. Ipangelwa stressed that enough provision should be made in the budget for marketing activities, especially considering the low levels of OI awareness in African countries. However, marketing is not the silver bullet to proliferate OI awareness; it takes commitment, time, capacity and proactivity from all partners to create an OI foundation that can help raise economic development.

Chungu mentioned that networking is crucial for innovation diffusion and the promotion of technology transfer. Networking is a continuous process and not a singular event, and it takes a lot of commitment, incessant effort and adequate resources. Chungu also stressed that technology transfer cannot be stimulated without there being a foundation for technology, such as access to

energy, for example. Hence it can be expected that networking in a technology vacuum might not add the value intended.

Eliciting stakeholder engagement and building an ecosystem was a time-consuming process, and so was finding the actual challenges to post, especially at the onset of the project in Namibia. The main reason for this was the lack of OI awareness, coupled with the fact that in the early stages of the project the RC had not yet earned credibility. There were also no local success stories to tell.

Finally, the internal governance structure can have both a positive and a negative impact on stakeholder engagement and the promotion of OI benefits and outcomes. Therefore, there is a need to potentially establish an independent regional office with clearly defined objectives and reporting structures, and fulltime resources.

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6. RECOMMENDATIONSIt has been suggested in theory that innovation communities could create a “community of communities” to support the learning needed to enhance regional economic development as well as the development of innovation communities themselves (Lippitz, Wolcott & Andersen, 2013: 63–65). Such a “community of communities” could enhance innovation-based development; a regionally orientated home base would be needed for this purpose, though. In order to effectively connect regional, national and international innovation systems in policy strategies, it should be recognised that they are systemic, mutually linked and interdependent on each other’s strengths. A socially embedded and networked regional innovation system provides a foundation for a well-functioning national innovation system (NIS) (Rauno et al., 2013). However, to gain from an international innovation system, absorptive capacity is needed (Fromholm-Eisebith, 2006: 94). At present the RC model lacks absorptive capacity due to its reliance on predominantly part-time resources. An effective RC would require fulltime resources to foster sustainability and to gain benefits from international innovation systems.

Some of the interviewees suggested the establishment of an independent regional office with a permanent residence and resources, and clearly defined objectives, reporting structures and key deliverables. Chungu argued that the RC should be proposed on a national level, as there should be a close tie with government to enable its sustainability. National government should realise the benefits of an RC to the country and region as a whole. He warned that there may be differences in how an RC would be operationalised in different countries, considering the differences in culture, innovation maturity, IP laws, policies and so on. On the whole, the RC should be an effective connector across regions with established triple-helix ties to support the OI process.

In order to fast-track buy-in by stakeholders and OI awareness, both Ipangelwa and Chungu suggested that challenges should be recruited from reputable institutions first and showcased; other organisations would then follow more readily. Link the recruitment strategy of seekers to national priorities and objectives. This in itself is a challenge, though, as the more reputable

organisations may not want to take a risk which may affect their reputation, so there is a need to strategically deal with the age-old chicken-and-egg problem until one reaches the tipping point. Therefore, revisit the stakeholder engagement process to make it more strategic, and align it with a clear value proposition for partners. There is also a need to educate internal stakeholders on OI to empower them and increase their OI know-how by having them attend both external and internal training programmes, conferences and workshops.

Finally, the process used to elicit technology offers needs to be relooked in order to address the IP fears of potential participants. The needs of local entrepreneurs, SMMEs and inventors need to be researched in more detail in order to attract more technology offers and get more interest from seekers.

“”

RC AIMS TO BE AN

EFFECTIVE CONNECTOR

ACROSS REGIONS

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“CONCLUSIONBuilding and maintaining relationships is a crucial step in building an effective RC model within a region. The key RC partner within each country should be a proactive connector within their own local triple-helix relationship framework and should have the absorptive capacity to manage RC effectively and promote innovation locally and within the region, whilst developing linkages globally at the same time. This type of embedded regional model could help fast-track the progress of effective national innovation systems by promoting innovation, growing capacity and building relationships across the region. Furthermore, an effective RC platform could the first step towards establishing connections with global innovation systems.

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