While local business leaders place innovation as a top business priority, turf wars, lack of alignment and budget constraints remain the key obstacles to innovation.
This is according to the State of Innovation Report 2018-2019 developed by the Creative Leadership Collective, a consortium of executives and senior managers, in partnership with the University of Stellenbosch Business School.
The research, which surveyed 119 business leaders, tracks public and private sector organisations against five stages of innovation maturity.
The stages range from stage one (ad hoc innovation with no formal focus); stage two (emerging stage with some awareness and some organised efforts); stage three (defined stage with formalised strategic programmes); stage four (integrated stage with implemented and effective innovation programmes) and stage five (optimised stage with innovation that is scalable, driven by empowered employees).
It found that despite low innovation maturity rates, an overwhelming majority of respondents are putting innovation front and centre in their organisational strategies, to help drive sustainable growth.
The majority of respondents said their business is either in stage two or three of innovation and highlighted certain stumbling blocks which hinder their digital efforts.
Paul Steenkamp, co-founder of the Creative Leadership Collective and co-author of the study, explains: "Our research found that none of the participating South African organisations were at stage five, and only 8% were at stage four.
"Nearly 80% of South African firms are either at the emerging or defined stages of innovation, where there is some awareness and effort, or some degree of formalised strategic programmes linked to customer or business objectives."
While local executives are good at developing their innovation strategies, communicating it and aligning their employees around it, the bad news is that implementation is hindered by some problems encountered, it notes.
Among key challenges highlighted were office politics, turf wars, financial constraints and lack of alignment between the business and digital strategy.
"To solve the problems we face as a country and continent, we can't afford to do the wrong things right from an innovation perspective. We need to think and act differently, and leaders need to create a more empowering culture within their organisation. Encouragingly, South African public and private sector organisations have taken note: management commitment and support for innovation is perceived to be on the up."
Global trends
According to the research, the low innovation maturity levels are in line with international trends.
"The maturity levels are consistent with global trends, as organisations' capacity to manage innovation tends to improve over time, but only when there is clear leadership to manage specific issues limiting innovation at the various stages of maturity," explains Steenkamp.
According to KPMG's 2018 Benchmarking Innovation Impact Report, nearly 60% of global respondents placed themselves in the first two categories of the innovation stage.
Only 4.1% believed they had reached the highest stage of innovation maturity.
The Dell Digital Transformation Index ranks SA among the top 10 countries that are home to firms leading the digital business maturity level by implementing innovative systems and capabilities in their business processes.
Improved collaboration
The study further found that in order to succeed in their innovation strategies, local firms need to work more closely with the education system to deliver the skills required to embed continuous innovation.
"Organisations that are open to the learning process outperform those that are not. However, our research found a lack of collaboration between the private sector and institutions of higher learning," notes Steenkamp.
The United Nations Conference on Trade and Development notes in its Technology and Innovation Report 2018: "Harnessing frontier technologies for sustainable development requires skills and education in taking advantage of frontier technologies such as artificial intelligence, Internet of things and other emerging technologies that are driving much of the advances in the digital economy."
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