Enhancing Small Medium Enterprises and Their Role in

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Enhancing Small Medium Enterprises and Their Role in Innovation Mc. Lean Sibanda Chief Executive

Enhancing Small Medium Enterprises and Their Role in Innovation Mc. Lean Sibanda Chief Executive Officer: The Innovation Hub Presentation to Science, Technology and Innovation Summit Legend Gold & Safari Resort, Limpopo 20 th July 2013

Overview q Introduction q Challenges Faced by SMEs q Rethinking Enterprise Development § Financing

Overview q Introduction q Challenges Faced by SMEs q Rethinking Enterprise Development § Financing § Support § Markets q Concluding Remarks

Challenges Facing Entrepreneurs Lots of Options - Little Results ation Inform ad overlo I

Challenges Facing Entrepreneurs Lots of Options - Little Results ation Inform ad overlo I need ! mentoring full Don’t realise potential Market Rules Expensive Lack of funding Generic tools Lack of p stand roper ards Don’t know tart where to s Need support & guidance Business Rules Did you k now… If entrep reneurs ha right too ls + right d access to the support s they wou tru ld be mor e willing to cture, grow the ir busine start or sses and significan h tly more ence be bankable. 3

Challenges Facing Entrepreneurs OECD Territorial Review of Gauteng Province q Low levels of entrepreneurial

Challenges Facing Entrepreneurs OECD Territorial Review of Gauteng Province q Low levels of entrepreneurial activity / Culture q Low survival rate of start-up companies § § Access to appropriate financing instruments Underdeveloped entrepreneurial skills Poor R&D pipeline Access to facilities and infrastructure q Highly concentrated market structure § Access to Markets § Dominance by established enterprises q Insufficient and highly domesticated partnerships § Inter-firm linkages § Linkages with Higher Education and R&D Institutions 4

Rethinking Financing of Innovation Based SMEs Need to increase funding for technology and intellectual

Rethinking Financing of Innovation Based SMEs Need to increase funding for technology and intellectual property development § High nonresidents filings (life sciences) § Low contribution by SMEs, universities, Science councils § Biggest contributor for resident filings large corporates http: //www. wipo. int/export/sites/www/ipstats/en/wipi/pdf/941_2012_section_a. pdf 5

Rethinking Financing of Innovation Based SMEs Lessons from USA’s Small Business Innovation Research Grants

Rethinking Financing of Innovation Based SMEs Lessons from USA’s Small Business Innovation Research Grants q Objectives of SBIR Program: q Phased incremental grants depending on § Stimulate technological innovations in private sector stage of development § Strengthen role of small businesses in meeting R&D needs § Increase private sector commercialisation of innovations derived from USDA-supported R&D efforts § foster and encourage participation by socially and economically disadvantaged small business firms in technological innovations q Right mix of high risk funding § Phase I: § US$100, 000 § 8 months § Phase II: § US$450, 000 § 24 months § Need for right mix of funding instruments § SPII § TIA § THRIP 6

Rethinking Support of Innovation Based SMEs Role of Science and Technology Parks and Incubators

Rethinking Support of Innovation Based SMEs Role of Science and Technology Parks and Incubators Catalysts / enablers for socio economic development through innovation "A Science Park is an organisation managed by specialised professionals, whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions”. To enable these goals to be met, a Science Park: q stimulates and manages the flow of knowledge and technology amongst universities, R&D institutions, companies and markets; q it facilitates the creation and growth of innovation based companies through incubation and spin-off processes; and q provides other value-added services together with high quality space and facilities. ” 7

Rethinking Support of Innovation Based SMEs African STP’s- “Hundred Flowers Bloom” https: //africahubs. crowdmap.

Rethinking Support of Innovation Based SMEs African STP’s- “Hundred Flowers Bloom” https: //africahubs. crowdmap. com/

Rethinking Support of Innovation Based SMEs Case Study: The Innovation Hub Cluster Approach 1

Rethinking Support of Innovation Based SMEs Case Study: The Innovation Hub Cluster Approach 1 INDUSTRIALS Entrp 1 Lead Mentor INCLUSIVE INNOVATION Entrp 2 BIOSCIENCES Entrp 3 Highly Skilled Mentor 3 ICT and MOBILE 4 GREEN ECONOMY 2 Entrp 1 Lead Mentor Entrp 2 Entrp 3 Highly Skilled Mentor Entrp 1 Lead Mentor Entrp 3 Highly Skilled Mentor Entrp 2 INCLUSIVE INNOVATION External Industry Strategic Partnership

Rethinking Support of Innovation Based SMEs Case Study: The Innovation Hub Enterprise Development Approach

Rethinking Support of Innovation Based SMEs Case Study: The Innovation Hub Enterprise Development Approach Climate Innovation Centre: accelerating local innovations § Support of locally developed climate innovations § Linkages to info. Dev network § 5 service offerings § Access to finance, business advisory and incubation, policy advisory, access to facilities and equipment, access to networks and partnerships Gauteng Accelerator Programme – Mobile & Green: Fostering Service Delivery § Provincial Innovation Competition § Platform to source local innovations to improve government service delivery § Prize money used as seed capital to grow enterprises from innovations § Procurement of innovations for government service delivery challenges Maxum: Technology and Business Incubation Support § Technology Business Incubator to fast track the establishment and growth of early stage technology and knowledge based businesses § Pre-incubation and business incubation Gauteng Accelerator Programme - Biosciences: Entrepreneurship § Year long entrepreneurial and business development support § Executive Education Programme § 4 month intensive mentorship to develop business plan § Business Plan competition with prize money & incubation § Supported by TIA

Rethinking Support of Innovation Based SMEs Case Study: Mobile Applications Labs (m. Lab) Nokia

Rethinking Support of Innovation Based SMEs Case Study: Mobile Applications Labs (m. Lab) Nokia Test bed @ m. Lab Fostering mobile applications development and entrepreneurship Hackathon: Nokia & Microsoft: 22 – 24 June 2012

Rethinking Support of Innovation Based SMEs Case Study: The Innovation Hub Enterprise Development Approach

Rethinking Support of Innovation Based SMEs Case Study: The Innovation Hub Enterprise Development Approach Value Added Services Enterprise Development Value Added Services CIC BIOPark Maxum (ICT, Manufacturing, Industrials) MLAB Maxum Business Incubation Inputs Outputs

Rethinking Support of Innovation Based SMEs Value Added Services q Access to Spaces and

Rethinking Support of Innovation Based SMEs Value Added Services q Access to Spaces and Prototyping Infrastructure q ICT: state of the art enabling ICT environment with free / afforable bandwidth q Access to Markets: § Collaborations and soft-landing opportunities § International opportunities for companies through the Open Innovation portal and linkages to the IASP network (including open innovation programmes) § Export support programmes § Market research reports and business networks § Innovation specialists: access to various sector networks, sector specific support programmes, conferences and workshops q Research support and access to equipments + specialists through partner institutions q Networking functions and events: experts networks, trends, etc. q Access to network of service providers (IP, HR, Legal, Finance, etc) q Intellectual Property Advisory Services

Rethinking Markets for Innovation Based SMEs Case Study: The Innovation Hub Open Innovation Solution

Rethinking Markets for Innovation Based SMEs Case Study: The Innovation Hub Open Innovation Solution Exchange. . 1/5 A Gauteng Innovation Strategy Initiative: OI Solution Exchange Seekers Large, diverse, engaged solution provider community = high probability of finding a unique solution in short time – often outside ‘normal’ supplier network Need Solution Why unique? Providers Well-defined challenges posted by organisations within a genuine need = committed buyers with high probability of procurement

Rethinking Markets for Innovation Based SMEs Case Study: The Innovation Hub Open Innovation Solution

Rethinking Markets for Innovation Based SMEs Case Study: The Innovation Hub Open Innovation Solution Exchange. . 2/5 Seekers Local corporation s Local. Regional. State Government Local universities Solution Space Local SME’s OI Need OI Solution Common Workspace Local trade associations Campaign Local target industries Media events Local Research Institutes Local target industries Email/Live Outreach Corporate campaign Proactive Search Providers Press Release Local. Regional. State Government Local universities Local corporations Local SME’s

Rethinking Markets for Innovation Based SMEs Case Study: The Innovation Hub Open Innovation Solution

Rethinking Markets for Innovation Based SMEs Case Study: The Innovation Hub Open Innovation Solution Exchange. . 3/5 Active Traffic Control Device to Minimise the Risk of Vehicles entering Railway Crossings Challenge Owner: Transnet SOC Deadline: 5 February 2013 Business Opportunity: Product acquisition, proof of concept leading to commercial application, joint development, supplier agreement and license to manufacture.

Overview

Overview

Rethinking Markets for Knowledge Based SMEs Case Study: The Innovation Hub Open Innovation Solution

Rethinking Markets for Knowledge Based SMEs Case Study: The Innovation Hub Open Innovation Solution Exchange. . 5/5

Concluding Remarks Enhancing SMEs and Their Role in Innovation SME success is really based

Concluding Remarks Enhancing SMEs and Their Role in Innovation SME success is really based on the following three critical (3) elements: 1. The ‘Jockey’: Develop The Entrepreneurial Mindset § Development of entrepreneurial skills § Entrepreneurial culture 1 2. The ‘Horse’: Develop The Business Model & Business § 2 3 Provision of a pipeline of intellectual property and technologies 3. The ‘Racecourse’: Access to market, access to resources, access to finance § § Right mix of financing instruments Enabling infrastructure Market structure / government procurement as source of stimulating innovation Relook Procurement Regulations 19

Concluding Remarks • Changing faces of South Africa presenting numerous opportunities § Youthful population

Concluding Remarks • Changing faces of South Africa presenting numerous opportunities § Youthful population / unemployment (49. 6% under age of 25 years) § Urbanisation / stretched resources / service delivery (projected to be >50% by 2020) § Connectivity (>50% smartphones by 2017) § Burden of disease / new drugs and diagnostics § Climate change / renewable energy / clean water

Thank You! The Innovation Hub Innovation Catalyst for a Smart Province: Gauteng, Republic of

Thank You! The Innovation Hub Innovation Catalyst for a Smart Province: Gauteng, Republic of South Africa www. theinnovationhub. com