Mapping Innovation Activities for Rural Development in Dr. Ruth Segomotsi Mompati District Municipality: Pilot Study Preliminary Findings

Mapping Innovation for Rural Development

in Dr Ruth Segomatsi Mompati District

Municipality

MAPPING INNOVATION ACTIVITIES FOR RURAL DEVELOPMENT IN DR. RUTH SEGOMOTSI MOMPATI DISTRICT MUNICIPALITY: PILOT STUDY PRELIMINARY FINDINGS

RURAL INNOVATION ASSESSMENT TOOLBOX (RIAT) PHASE TWO

Prepared by: Alexandra Mhula-Links, Makale Ngwenya, Brandon Bodenstein, Tim Hart and Peter Jacobs

31 August 2013

TABLE OF CONTENTS

LIST OF FIGURES AND DIAGRAMS ...... v LIST OF TABLES ...... vi EXECUTIVE SUMMARY ...... viii 1. INTRODUCTION ...... 1 2. BACKGROUND TO RIAT ...... 1 3. CORE CONCEPTS AND WORKING DEFINITIONS ...... 2 4. METHODOLOGY ...... 6 5. SOCIO-ECONOMIC INFORMATION FOR THE DISTRICT ...... 9 5.1 Social Profile ...... 10 5.1.1 Population ...... 10 5.1.2 Poverty and health ...... 10 5.1.3 Education ...... 11 5.1.4 Services and infrastructure ...... 11 5.2 Economic Profile ...... 13 5.2.1 Employment ...... 13 5.2.2 Gross Value Added ...... 14 3.3.3 The Green Economy ...... 15 5.3 Conclusion ...... 15 6. RURAL INNOVATION IN DR. RUTH MOMPATI DISTRICT MUNICIPALITY ...... 15 6.1 Introduction ...... 15 6.2 Enterprise profiles ...... 16 6.2 Local Understanding of Innovation and Social Innovation ...... 18 6.3.1 Local understanding of social innovation ...... 19 6.4 Innovation value chains and innovation types ...... 22 6.4.1 Adoption ...... 23 6.4.2 Diffusion ...... 24 6.4.3 Adapt ...... 25 6.4.4 The ‘innovation trail’ - referral method ...... 26 6.4.5 Innovation activities in DR. Ruth Mompati District (2011 – 2012) ...... 27 7. TWO ILLUSTRATIVE EXAMPLES OF INNOVATION IN DR RUTH MOMPATI ...... 28 7.1 Introduction ...... 28 7.2 Example 1: Wildsilk ...... 28 7.2.1 Description of the enterprise and innovation activities ...... 29 7.2.2 Innovation value chain ...... 29 7.3 Example 2: Peanut Farm ...... 30 7.3.1 Description of the enterprise and innovation activities ...... 30 7.3.1 Innovation Value Chain ...... 30

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7.4 Comparison of the Illustrative Examples ...... 31 8. MICRO OR INTERNAL ENVIRONMENT OF THE ENTERPRISE ...... 32 8. 1 Innovation enabling environment ...... 32 8.2 Theme 1: Innovation as new ideas and creative thinking in an enterprise ...... 33 8.3 Theme 2: Innovation is more than invention, it is a continuous process ...... 34 8.4 Theme 3: Networks and new connections are important ...... 35 8.5 Training and skills development ...... 35 9. MACRO CONTEXT - BROADER INSTITUTIONAL AND REGULATORY ENVIRONMENT ...... 36 9.1 The local and national level of institutional support ...... 37 9.2 Regulatory environment ...... 38 9.3 Reasons why innovations are not introduced ...... 39 10. CONCLUSION AND LESSONS ...... 43 11. REFERENCES ...... 47 APPENDIX: RIAT Feedback Session to Dr Ruth Mompati District ...... 48

LIST OF FIGURES AND DIAGRAMS

Figure 5.1: North West Province Source LGH North West (2013) ...... 9 Figure 5.2: Dr Ruth Segomotsi Mompati District Map Source LGH North West (2013) ...... 9 Diagram 6.1: IVC for ‘The Peanut 100 Machine’ ...... 26

LIST OF TABLES

Table 5.1: Total population by age group classification ...... 10 Table 5.2: Highest level of education: age 15years+ ...... 11 Table 5.3: Dwelling type ...... 12 Table 5.4: Social and economic needs identified by the local municipalities ...... 12 Table 5.5: Employment by sector ...... 13 Table 5.6: Sectors contribution to economic growth ...... 14 Table 5.7: Gross Value Added per sector ...... 14 Table 5.8: Contribution to total economic growth (% point, Constant 2005 prices) ...... 15 Table 6.1: Share (%) of enterprises/organisations in terms of statutory registration, taxation, economic sector, group membership & output distribution by enterprise Type, (N = 122) ...... 17 Table 6.2: Share (%) of enterprises aware of social innovation and main purpose of innovation by enterprise type, (N=122) ...... 21 Table 6.3: Share (%) of enterprises engaged in Innovation activities by enterprise type, 2011 & 2012, (N = 122) ...... 27 Table 8.1: Share (%) of enterprises with direct access to resources and facilities for innovation, (N = 122) ...... 33 Table 9.1: Share (%) of enterprises familiar with STI state policies by enterprise type, (N=122) ...... 41 Table 9.2: Share (%) of enterprises participating in innovation networks and system by enterprise type, (N= 122) ...... 42

ACKNOWLEDGEMENTS

The Department of Science and Technology (DST) contracted the Human Sciences Research Council (HSRC) to develop and pilot the Rural Innovation Assessment Toolbox (RIAT) in four rural district municipalities. The RIAT aims to enhance the contribution of science and technology interventions to rural development, deepen understanding of the social and institutional dynamics of rural innovations and inform the work of the multi-stakeholder Rural Innovation Partnership. Based on the outcomes of this project, the team must also explore ways to institutionalise RIAT as a self-discovery diagnostic tool for innovators. This is the third in a series of four district municipality reports and provides the findings for the Dr. Ruth Segomotsi Mompati District Municipality in North West Province. The early conceptual inputs from members of the RIAT Project Steering Committee and other regular, but part-time, RIAT Project Team members, who are not authors of this specific paper, are acknowledged. Also acknowledged are the contributions of the various fieldworkers involved in this pilot study, namely: Aubrey Mphateng, Matsekola Mokori, Michael Saneka, Sydney Fryer and Brandon Bodestein. We also acknowledge the assistance of those people in the Dr. Ruth Segomotsi Mompati District who participated in the research. Alison Ziki and Annemarie Booyens are thanked for editing and layout of the final document. The views expressed are those of the authors and do not necessarily reflect those of any other party.

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EXECUTIVE SUMMARY

Roughly 13% of the provincial population lives in Dr. Ruth Mompati District, with more than 65% of these residents located in rural areas across this district. Human wellbeing indicators for the district generally fall below the North West provincial averages, suggesting relatively lower quality of life and living standards. Access to services such as potable water, sanitation and electricity and roads is relatively low. The district is the largest beef cattle producing district in the country. Locals sometimes refer to it as the ‘the Texas of South Africa’. Farmers also produce maize and peanuts for the national and the export markets. Tertiary services followed by primary sector activities (particularly agricultural) dominate gross value added and economic growth.

Several high-level insights flow from the assembled evidence and deserve to be highlighted as a helpful step towards thinking about appropriate policy recommendations. Based on technical criteria about registering with a statutory authority and for income tax purposes with SARS, approximately 75% of all sampled enterprises could be classified as formal sector enterprises. Another striking feature of the sampled enterprises is that they are predominantly involved in tertiary services (community and financial services) and primary sector economic activities (particularly agriculture, instead of mining).

In the sampled enterprises, almost all respondents equated innovation with hard technologies, creativity, and bringing something new into the enterprise. The traditional notion of ‘innovation’ was fairly well known among participating enterprises. Almost 90% of private organisations engage in innovation activities for direct economic benefit. Not surprisingly, 75% self-report no awareness of the restricted meaning of social innovation. On the other hand, a substantial share of sampled public and non-profit enterprises pursue innovation activities with the explicit or implicit goal to improve human and social wellbeing, yet no more than one out of four of these organisations reported an awareness of the restricted definition of the concept ‘social innovation’. This fact, if coupled with increased government support to ‘social innovation’, may well increase the prospects for new ideas and practices to directly uplift the living standards of large numbers of people.

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Unfortunately, at grassroots level there is poor localised awareness of national innovation policies and government assistance to promote innovation. Approximately 30% of enterprises self-reported an awareness of national Science, Technology and Innovation (STI) policies - heavily skewed in favour of public enterprises. A significant share of the enterprises considered institutional support (policies, laws and agencies regulating and supporting innovations) an important contributor to innovation activities. However, what reduces an appreciation of the need for institutional support is the disproportionately negative perception of institutional support prevalent among private enterprises in our sample.

A novel framework to comprehensively document the nature and extent of innovation activities (invention, adoption, adaption and diffusion) in Dr. Ruth Mompati District underpins this report. With the aid of this approach and its related methodology we were able to uncover patterns of rural innovation that can potentially overcome rural underdevelopment and raise the living standards of rural communities. Very few enterprises in this district are pioneering creators of new products, processes, organisational or marketing arrangements coupled with intensive research and development for new knowledge production. This traditional notion of innovation, or simply invention, took place within a marginal share of all sampled enterprises for the years 2011 and 2012. This evidence is not surprising because the critical drivers of original knowledge and artefact creation are generally missing as is access to further development and refinement.

Adoption was far more prevalent among enterprises and this stands in sharp contrast to invention. The evidence points towards more vigorous uptake of new ideas, practices and artefacts originally developed by other enterprises outside Dr. Ruth Mompati District. An impressive 85% of sampled enterprises are actively involved in knowledge sharing networks, which adopters are most likely to benefit from. Among the enterprises participating in self-reported networking for innovation, interactions with partners are predominantly formal rather than informal although there are sectoral differences. Moreover, enterprises that adopt innovative ideas, arrangements and products from outsiders confirmed that they are offered various choices, enjoy the freedom to choose and tend to introduce the ‘new knowledge’ into their enterprises.

Improvements and incremental changes to innovations sourced from outside enterprises rank a distant second after adoption in terms of the proportion of enterprises involved in this activity. On average, only one out of four enterprises actively adapts innovations, with private enterprises ahead of non-profits on this front. The private commercial enterprises that actively adopt and adapt rarely applied for government support for the dominant innovation activities, contrary to some non-profits (56%) that do apply.

The proportion of enterprises that transfer, share and distribute new ideas, products and practices in Dr. Ruth Mompati District have increased from 7% to 13% from 2011 to 2012. Diffusion of innovations among sampled enterprises clearly surpassed invention within two years, thus shifting it into the third most prevalent innovation activity in the district.

Although there is some evidence of innovation activity in the district, improved government support could largely improve the environment for innovation. One of the reasons identified by the sampled enterprises is the lack of coherent support for innovation in the rural district by the government. Also, the highly bureaucratic funding process is discouraging for most enterprises. At enterprise level, lack of capacity is another reason for the low level of innovation. This factor could also be improved through government support in creating necessary innovation awareness and skills transfer.

To sum up, findings of this pilot study in Dr. Ruth Mompati District support a basic proposition: in order for innovation to be a catalyst for rural development, with an emphasis on enhancing human wellbeing, the costs hindering innovative performance must be cut. In practice this means easing the ability of enterprises based in Dr. Ruth Mompati District to adopt and adapt innovative products, processes, organisational and marketing arrangements. Strengthening learning capabilities of actors in the local innovation space, especially know-how of STI policies and the national system of innovation, combined with effective institutional coordination are urgent interventions to successfully harness innovation for broad-based quality of life enhancement in rural Dr. Ruth Mompati District.

1. INTRODUCTION

The report focuses on Dr. Ruth Mompati District in North West Province and provides some of the findings, and analysis thereof, from the pilot use of the Rural Innovation Toolbox (RIAT) rapid mapping tool (Version 2). This part of the RIAT pilot study took place between the 21 April and the 24 May 2013.

The next two sections of the report provide some background to the RIAT study, the core concepts invoked and the research methodology used in the Dr. Ruth Mompati District. The remainder of the report presents a short socio-economic review of the district, drawn largely from the district municipalities’ (DMs) latest Integrated Development Plan (IDP) and recent data obtained from Global Insight Regional Explorer, followed by the presentation and discussion of the findings derived from the pilot RIAT rapid mapping instrument. Experiences gained during the implementation of this part of the RIAT pilot study are described in the final report for the Department of Science and Technology (DST) and are not described here. These experiences along with those gleaned from the pilot exercise in Chris Hani District Municipality and Mopani District Municipality were used to refine the instrument for implementation in the Dr. Ruth Mompati uMzinyathi District Municipalities. That instrument is RIAT rapid mapping tool Version 2.

Little is known about innovation in Dr. Ruth Mompati District, whilst an exhaustive and coherent picture of localised innovation actors and activities in this rural district does not exist. This study is an initial attempt at filling this knowledge gap, and the authors are mindful of the fact that the documented evidence of innovation in this report makes up a tiny fraction of what might be occurring in reality. Nevertheless, it is a repository of policy-relevant information which did not exist prior to this study and can serve as a useful guide to policy interventions aimed at boosting local innovative performance, which ought to begin with knowledge capabilities and what enterprises within the district actually know (or do not know) about innovation as well as what innovative activities are prevalent in the district.

2. BACKGROUND TO RIAT

The Rural Innovation Assessment Toolbox (RIAT) starts from the basic understanding that innovation is a multifaceted process of knowledge generation, adaption, spread and use for the delivery of broad-based societal benefits (technological, institutional and social). Based on this open-ended notion of innovation, RIAT has prepared the ground for longer-term mapping of innovation value chains in spatially marginalised contexts; in this instance the 24 deprived RDMs in South Africa serve as examples of spatially marginalised contexts. The pilot testing of the RIAT rapid mapping instrument in this district, as well as the other three, enabled further refinement of the instrument and guided the formulation of the other tools in the RIAT toolbox. These other tools will be further

explored in the third phase of the pilot study to be carried out in the remaining 20 RDMs. The results of the rapid mapping instrument, as with the other tools in the RIAT, builds upon the conceptual contributions to rural innovation systems thinking and an appropriate practice oriented methodology, informed by theoretical learning on innovation indicator development (Mhula, Jacobs and Hart, 2013) and experiences gained from pilot fieldwork in this district.

The primary objective of the RIAT project is firstly to develop a tool that can map out innovation actors, activities and systems in spatially marginalised contexts. The second key objective is to develop a complementary set of instruments (a toolbox) that could assist actors to improve their self-learning about their innovation potential and activities. The third objective is to design the instruments in such a way that they could assist with the future monitoring and evaluation of innovation activities in the RDMs. Cutting across these three objectives is the need to apply ‘systems thinking’ to broad-based rural innovation to understand the actors and factors influencing new knowledge generation, diffusion, use (adoption) and improvement (adaption) for rural development in South Africa (Hart et al, 2012).

In order to achieve these objectives, the research team made three major investments. Firstly they invested in grounding the various ‘innovation assessment tools’ in cutting-edge conceptual and policy thinking on science, technology and innovation both internationally and in South Africa. This grounding process required understanding current innovation conceptual and policy thinking. It resulted in the production of several concept papers and engagement with South African and international innovation experts, formally and informally, thereby ensuring that subsequently developed tools would derive from this state of the art thinking. The second investment was to develop new experts and scholars on rural innovation systems by incorporating interns and junior researchers into the RIAT team, enabling their rapid development in this field and assistance with the theoretical and practical applications of rural innovations systems research. The third investment was the crafting of appropriate methodologies to map rural innovation activities, understand how these from a ‘systems perspective’, to test self-reflective learning potential of rural actors and to determine monitoring and evaluation potential of the various instruments over the medium-term. The critical engagement with theoretical and practical approaches to innovation systems thinking in South Africa and internationally were vital in understanding the meanings of rural innovation and informing the methodology for information collection and analysis.

3. CORE CONCEPTS AND WORKING DEFINITIONS

The RIAT research team spent several months reviewing existing local and international definitions in order to arrive at practical working definitions for the implementation of the pilot project (this work is showcased in the various concept papers compiled by the team and available on the EPD page of the HSRC website: www.hsrc.ac.za). The development of working definitions was undertaken to

facilitate the interaction with the enterprises, organisation and individuals within the RDMS as well as to clarify the definitions that were adopted for the purpose of the study. The most crucial definition in this study is that of innovation, so time was spend here clarifying the concept and various characteristics of innovation. The working definition of social innovation that was used for the purposes of this study is then presented, emphasising what was considered to be important in distinguishing the typical or generic use of innovation from that of ‘social’ innovation.

Innovation refers to both a process and the output of that process. The innovation process typically involves four activities: adoption (the incorporation or use of an innovation into an enterprise or individual’s way of doing things which improves on what was previously done); adaption (the changes made by the user to an innovation in order to make it more useful to the user); diffusion (the transfer or sharing of an innovation with others to use for their own purposes – it does not necessarily always include the sharing of all of the knowledge required to use the innovation); invention (the creation of a virtually new or much changed and improved innovation – this can be incremental such as the move from portable phones to cellular phones to smart-phones; a process aided by the increased improvement in computer technology and network platforms). Not all of these activities need to be present for an innovation process to have occurred. Quite simply, adoption of something new that improves what one is doing is an innovation, i.e. a single activity means that an innovation process has taken place. While adoption may lead to adaption or even diffusion, invention does not have to occur in the present for something to be considered an innovation. Essentially, one would anticipate that invention should be followed by adoption, adaption and then diffusion. However, invention could be equally followed by diffusion without the inventing enterprise or individual actually adopting the innovation for their use. More importantly, if we consider the example of a smart-phone we realise that it is based on the integration of a number of technologies and systems that have been developed since the late 19th Century and improved during the course of the 20th Century to result in the smart-phone used in the 21st Century. In such instances it would be incorrect to say that the smart-phone was invented in the 21st Century by a specific company or person. It has emerged incrementally overtime and we would not expect to identify the specific time and place when the smart-phone was invented. In this example we would not see a process involving invention but rather one involving adaption, diffusion, adoption and perhaps further adaption and diffusion. In other words, the process of innovation is not a linear one and need not start with invention. In fact, within a specific spatially bounded area the innovation process might begin with adoption.

The study has interpreted the innovation process as one akin to the value chain and named it the Innovation Value Chain (IVC). Various factors and actors along the value chain determine how far an innovation travels and what happens to it as it travels. Some innovations may have long journeys (such as the telephone) involving the repetition of various innovation activities. Others may have much shorter journeys and only involve one or two innovation activities. We discuss this IVC process

in more detail in the presentations of the findings below and look at how it is manifested in this district.

Innovation or innovations (plural) are the output of the innovation process (or activities), which is generally accepted to occur as part of the core function of enterprises, organisations or individuals, and where the purpose of innovations is to improve or increase the core function directly or indirectly. In this regard four innovation types are identified: products (these include goods and services); processes (these include the means to provide/deliver improved products); marketing strategies (ways to increase the quality, scale and access to existing or new markets); and organisational arrangements (to use new organisational methods, including new or changed business practices, internally in an organisation or to create changes and improvements in external relations with other organisations).

Knowledge is also crucial to the innovation process and outputs. The development of the Rural Innovation Assessment Toolbox (RIAT) has started from the basic understanding that innovation is a multifaceted process of knowledge generation, adaption, spread and use, for the delivery of broad- based1 societal benefits (economic, technological, institutional and social). Knowledge appears to have two important roles in innovation. In the first instance some level of knowledge is required to generate new knowledge. In this sense there has to be a building on existing knowledge to bring about new knowledge that is considered by the user to be an improvement. Some level of knowledge is required for innovation to occur and improve or new knowledge can be the output of the innovation process. In the second instance knowledge may be required to be part and parcel of a product (service or good), process, organisational arrangement or marketing strategy so that these can be used effectively by both the provider and the consumer in their respective roles. Innovation is both a process as well as output of this process and involves the use of knowledge in the innovation process and/or the development of improved or new knowledge through this process. Sometime this knowledge is required to make use of other outputs of the innovation process. There are three further characteristics that determine whether or not a product, process, strategy or arrangement is considered to be an innovation.

It is possible to draw out three minimum core requirements for something to be considered an innovation. The first is the idea of novelty. To be considered an innovation, an idea, practice, process, product, etc., must be new to the organisation or at least be a significantly improved version. This requirement of novelty or newness holds for the producing or adopting enterprise or individual. The second requirement is that of value. To be considered as an innovation, the product, process, marketing strategy or organisational arrangement must have value. However, value need not necessarily be exclusively confined to notions of financial or commercial value - social value, welfare,

1 Of course there could be accumulation by individuals but our understanding of the DST interest and focus is that of broad-based direct societal benefits, rather than individual and trickle-down benefits of innovation.

satisfaction, perceived improvement in one’s life are all important. The adoption of an innovation indicates its usefulness and potential for further innovation in the form of adaption or even incremental change. In light of this some scholars suggest that a further or third requirement for something to be an innovation is that it can be diffused beyond the producing individual or enterprise – broader adoption requires diffusion. Such diffusion or sharing can take place through market and non-market channels. However, some scholars argue that R&D is not innovation until the outputs thereof connect to a market (Gault 2010). It is the authors’ opinion that such a market need not be commercially oriented and is more likely to be determined by the need or desire for an innovation. If no diffusion occurs beyond the developing enterprise or individual then there might not be any actual broader economic or social impact.

Social innovation differs from the more generic concept of innovation in the sense that the outputs of the social innovation process should have an identifiable social impact rather than simply an economic or other (e.g. adding to the state of knowledge or science) impact. There is much debate about what is or is not reasonably classified as a social innovation. Analysis of the literature on the subject illustrates that there are three primary understandings of the concept of social innovation, as well as variations of these. The first understanding considers the organisation or the management of people and things within enterprises or social settings. Furthermore, these can be both informal and formal organisations and arrangements. Examples include trade unions, bargaining councils, stokvels, working parties, job-sharing schemes and distribution methods.

A second understanding proposes that social innovations are those that have social outputs or benefits. They make welfare, well-being or social improvement contributions, which enable poorer people to access and participate more actively in socio-economic opportunities and affairs of the state (governance/service delivery). Examples include not only access to but also input into improved health, sanitation, water, electrification, education and security. Such innovations can be products or processes. However, they must involve social value and possibly inter-generational value and improvement. Medium-term ideas around sustainable environmental development, reduction of the carbon footprint and promoting the green economy are examples of innovations that have inter- generational value. Loan strategies that are directed to and accessible to the poor, as well as national radio and television broadcasters, are also considered to be social innovations in this category, as the affordability of such products and services is maximised through various means, including state funding. However, some scholars argue that a social innovation must be a social and public good (Harris and Albury, quoted in YF/SIX 2010: 16) and they would not consider the private sector development of a necessary vaccine as a social innovation, unless it was subsidised, freely available and accessible. Other scholars see Google as a social innovation, despite its origins in the private sector (like the vaccine example above), because its value to society outweighs the profits to the private sector.

The third understanding is a rather narrow combination of the above two. Social innovations are those innovations (new products, services, models and practices) that concurrently meet social requirements and produce new social collaborations outside of the enterprise environment. This notion excludes innovations occurring in enterprises. Social innovations must have social means (driven by users) and ends (benefits to users). Users should influence social innovation rather than it being exclusively top-down; therefore it must achieve systemic change (YF/SIX 2010).

There is also an increasing awareness of the social dynamics of innovation processes and outputs. Here the roles of history, politics, social relationships, etc. in influencing the innovation process and outputs, particularly focusing on access to resources, are examined. The study’s interest was more on the existence of social innovations although it is clear that social dynamics have an important role in influencing innovation activities of all types within the RDMs; especially with regard to what is available and who gets access to innovations.

The study adopted a middle of the road approach with regards to social innovation, whereby it must emphasise improvement in social wellbeing or welfare improvement for society as a whole; or for a specific marginal or vulnerable group in society, such as infants, orphans or the poor. It should do this through products, processes and/or formal and informal social and organisational arrangements. As a result the study did not focus deeply on social innovations linked to marketing strategies and in fact did not pick up any such innovations in its sample. While the authors accepted that there can be economic spin-offs from social innovation, they are of the opinion that the social contribution must be greater and it should involve community participation and empowerment in innovations that enhance social wellbeing.

4. METHODOLOGY

Given the relative ‘newness’ of this type of innovation measurement and mapping exercise, exploratory methods proved to be most suitable for pilot-testing Component 1 of the RIAT, the survey instrument to conduct rapid mapping of the rural innovation system and value chain. A scoping visit was undertaken in Dr. Ruth Mompati District Municipality in November 2012. The purpose of the scoping visit to the district was to establish how best to link the innovation concepts derived from the literature and engagement with the experts, with the experiences and prevailing circumstances in the district. The scoping visit was also used to establish the most suitable sampling approach and build on the survey instrument design by illustrating thematic and crucial areas for the questionnaire structure. Furthermore, the scoping visit had the purpose of identifying key stakeholders, initiating contacts and potential interviewees, and getting ‘a feel’ for innovation activities and types within the district.

Unlike most national and international STI surveys, which primarily focus on registered and fairly easily identifiable firms as the unit of analysis, RIAT does not have this luxury, because many of the actors (enterprises, organisations and individuals) engaged in the innovation value chain in rural settings are often not easily identifiable. Some are unregistered organisations and others include unregistered individually owned micro-enterprises. To take care of these ‘hidden elements of the rural innovation value chain’, the pilot phase combined purposive survey design and snowball sampling. This sampling was considered most suitable for overcoming many of the initial obstacles encountered in identifying the rural innovation actors, but it also brought with it some internal constraints. The sampling approach is now discussed in some detail.

As the population of innovators or innovation actors in rural areas are often hidden and therefore unknown, it is difficult to identify the best sample size. Therefore, it was decided that the sample drawn need not be random because the lack of a discernible and finite population would make probability sampling redundant. The team adopted a purposive built survey design in which non- probability sampling was based on convenience. Following from this, snowball sampling was the best approach to selecting individual respondents. Potential respondents were firstly identified through a referral process (often peer referral or service provider referral) and then were screened to determine if they were suitable respondents (i.e. those to whom the survey instrument can be administered because they were engaged in innovation activities during 2011 and 2012). In the case of RIAT rapid mapping instrument and primarily for subsequent monitoring and evaluation purposes it was decided that respondents should have engaged in at least one innovation activity during the previous two years (2011 or 2012). Of course this meant that this pilot study unfortunately excludes earlier innovation activities that exist in the district and which contribute to ensuring economic and social development. A further restriction that this approach places on the data collected is that, because it is not a random probability sample from a discernible and finite population, the evidence cannot be used to make any inferences beyond the sample generated during the study. Given this situation and the fact that this is a pilot study this study cannot and does not attempt to make broad inferences for out-of-sample enterprises based on the collected data.

A range of relevant contact people were identified during the scoping visit in November 2012. Following discussions with these contact people, in which the project and specific purpose of the questionnaire were explained, they were asked to refer the fieldworkers to potential innovation actors from various sectors, i.e. those engaged in one or more innovation activities of invention, adoption, diffusion and adaption. In the pilot phase all the actors on the lists generated during the scoping visit were screened and if appropriate, interviewed using the rapid mapping survey instrument (Component 1 of the toolbox). They were then asked by fieldworkers to refer them to another two to three potential innovator respondents and the screening and interview process was repeated. In this manner, the snowball sampling approach identified appropriate respondents that were interviewed as part of the survey.

A more or less generic approach to sampling and interviewing was used in Dr. Ruth Mompati District Municipality during the pilot phase. The district was divided into two zones or hubs, where the main economic activities in the RDM are concentrated. These hubs were Vryburg (Zone A) and Bloemhof (Zone B). The fieldworkers comprised of three teams of two people; each fieldworker underwent three days of intensive fieldwork training in Pretoria. In the district they were coordinated by an HSRC intern who assisted with administration, fieldwork and research activities. A senior researcher, who managed the district team, visited the Dr. Ruth Mompati District twice to ensure that the fieldwork was on track, to resolve possible obstacles and to ensure that questionnaires were being accurately completed. The referral process started with the scoping visit contacts and thereafter expanded through the identification of new participants mainly, but not exclusively, from participating respondents.

Within the Dr. Ruth Mompati District three teams identified and interviewed a total of 122 innovation actors (individuals/organisations/enterprises), which translates to 81 actors in Zone A and 41 actors in Zone B. The targeted sample was unevenly spread across the sampling zones. The reality, as emphasised by the scoping visits, is that each zone has a different composition of sectors and industries. Because of the presence of informal actors in the innovation systems in these areas, the fieldworkers were advised to ensure that the final sample includes a good and ‘representative’ mix of informal enterprises/activities2. The willingness and availability of respondents to participate is an important factor in understanding the results, as not all identified innovators were willing to be interviewed and others were unavailable. Consequently, the fieldwork teams had to identify other actors who were engaged in at least one of the four innovation activities in order to achieve the upper and lower limits set by the research managers.

It is envisaged that the rapid mapping survey technique evolves with the other tools in the RIAT to form an integrated package of instruments for final use at the end of the third phase of the study. There was significant fine-tuning of the rapid mapping instrument on the basis of a richly nuanced picture of grassroots innovation activities pieced together from investigations over the last ten months. The research experience and use of the tool in the Mopani and Chris Hani Districts also guided the refinement of the rapid mapping tool used in Dr Ruth Segomtosi Mompati and uMzinyathi Districts. This experience will help inform sampling methodologies for more frequent and less resource intensive measurement, monitoring and evaluation beyond Phase 3.

2 More information on sampling in terms of sectors and industries per RDM can be accessed by downloading the relevant methodology RIAT Concept Paper, available on the EPD page of the HSRC website: www.hsrc.ac.za.

5. SOCIO-ECONOMIC INFORMATION FOR THE DISTRICT

Dr. Ruth Mompati (DRM) District Municipality is located in the North West Province (Figure 5.1 below) with an estimated population of 460 482, which is approximately 13% of the North West population that is estimated at 3 554 558.

Figure 5.1: North West Province (Source: LGH North West 2013)

The district comprises of six local municipalities, these are Naledi, Greater Taung, Kagisano, Mamusa, Lekwa Teemane and Molopo (Figure 5.2 below).

Figure 5.2: Dr. Ruth Segomotsi Mompati District Map 2013 (Source: LGH North West 2013)

The main towns in the district are Vryburg, Christiana, Schweizer-Reneke and Bloemhof. Of the estimated 460 482 residents in the district, 65.5% live in rural areas compared to the 34.5 % that live in urban areas in the larger towns (Global Insight 2013).

5.1 SOCIAL PROFILE

5.1.1 Population

The total population3 in Dr. Ruth Segomotsi Mompati District is estimated at 460 482 (Global Insight 2013). Slightly more than half of the population are female (52.1%) compared to the male population of 47.9%. Table 5.1 indicates the total population in the district for 2011. According to the table the youth and young adults make up the largest single share of the population, the minority are the infants and elderly.

Table 5.1: Total population by age group classification Classification Age Number Share % Infants 0-4 59 783 13 Children 5-13 101 003 22 Youth and young adults 14-34 145 434 31 Mature adults 35-65 124 098 27 Elderly 70+ 30 163 7 Total 460 482 100

Source: Global Insight (2013)

5.1.2 Poverty and health

DRM District is characterised by a high level of poverty with an estimated 53.7% of people living in poverty in 2011, compared to an estimated 43% of people living in poverty in the North West Province as a whole. The Gini Coefficient is 0.59 which indicates a highly unequal distribution of income within the district. The Human Development Index (HDI) is 0.52 which indicates a medium level of human development within the district.

HIV and AIDS affects local economic development through illnesses and deaths associated with the disease. The share of people who are HIV positive is estimated at 9.8% (45 291) while the share of the population who die annually from AIDS is estimated at 0.5% (2 337) in the district (Global Insight 2013).

3 The total population of a region is the total number of people within that region in the middle of the respective year. It therefore includes all residents, non-residents and individuals of any age, gender and population group.

5.1.3 Education

The functional literacy4 rate in DRM for the age group 20 years and older who completed Grade 7 or higher is 50.3 % for 2011, while the provincial functional literacy rate is substantially higher at 71.3%. The district rates indicate small and steady improvement over the period 1996-2011 from 40.9% in 1996 to 50.3% in 2011. However, the district literacy rate is much lower than the provincial literacy rate. Table 5.2 illustrates the highest level of education for the age group 15 years and older in the district, education is broken down into nine categories.

Table 5.2: 5Highest level of education: age 15years+ Level of Education Number of People Share % No schooling 52 976 17.7% Grade 0-2 8 375 2.8% Grade 3-6 47 450 15.8% Grade 7-9 71 697 23.9% Grade 10-11 56 012 18.7% Certificate / diploma without Matric 1 625 0.6% Matric only 44 250 15.0% Matric & certificate / diploma 13 564 4.5% Matric & Bachelor’s degree 2 776 0.9% Matric & Postgraduate degree 970 0.3% TOTAL 299 695 100.0% Source: Global Insight (2013)

5.1.4 Services and infrastructure

The backlog for sanitation in Dr. Ruth Segomotsi Mompati District is estimated at 57 397, which is the number of households without hygienic toilets, i.e. they have no formal toilet or they make use of either a pit toilet or the bucket system. The water backlog for the number of households below the Reconstruction and Development Programme6 (RDP) basic standard is approximately 64 9737. Houses of a standard above the RDP level are not considered to be part of the water supply backlog. Households above the RDP level include all households that have access to piped water within their

4 The functional literacy rate of those aged 20+ measures the number of people in a region who have completed their primary education (Grade 7), and are thus deemed functionally literate. If someone is functionally literate, they are assumed to have a level of reading and writing skills, enabling them to manage daily life and employment. The output can be broken down according to population group and represented as those who are literate, those who are illiterate or the percentage of people who are literate, which is commonly known as the literacy rate. 5 This measure represents the highest level of education for those aged 15 or older, broken down according to population group. An age of 15 is used because, according to the United Nations definitions on education, one is an adult if they are 15 or older. Using this cut off point therefore allows for cross country comparisons. Furthermore, age 15 is the legal age at which children may leave school in South Africa. 6 Households at or above the RDP level are not considered to be part of the water supply backlog. Above RDP level includes all households that have access to piped water within their dwelling, within their yard or within 200 metres of their dwelling. 7 This includes houses that are formal but for the households living in these formal structures, water is accessed more than 200 metres from their dwelling.

dwelling, within their yard or within 200 metres of their dwelling (Global Insight 2013). The number of households without electrical connections is 20 858 (Global Insight 2013, but see Dr Ruth Segomotsi Mompati IDP 2012-17 for more details – DRM 2012).

5.1.5 Number of households by type of dwelling

The majority of households living in what is classified as formal housing are estimated at 81 606, while households living in what is classified as traditional houses is estimated at 4 289. The number of households living in informal houses is approximately 10 888 (Global Insight 2013). This is indicated in Table 5.3 below.

Table 5.3: Dwelling Type Type of dwelling Number of households Very Formal 18 960 Formal 81 606 Informal 10 888 Traditional 4 289 Other dwelling type 314 Total 116 058 Source: Global Insight (2013)

Naledi and Mamusa local municipalities are the dominant contributors to the district economy. Most of the other economic contributions are through agricultural activities, such as farming. Manufacturing, retail trade and financial institutions also play an important role. The Dr. Ruth Segomotsi Mompati District Municipality has prioritised the following needs, listed in Table 5.4 (most of which are basic social needs), as crucial for social and economic development in each of the five local municipalities. Undoubtedly, significant attention must be paid to basic social infrastructural services before economic development can significantly increase.

Table 5.4: Social and economic needs identified by the local municipalities Local municipality Needs Naledi Roads, human settlements, water, sanitation, and jobs Mamusa Water, human settlements, roads, sanitation and electricity Lekwa-Teemane Water, human settlements, roads and storm water, social amenities Greater Taung Roads, sanitation, water, electricity, human settlements, bridges Roads, human settlements, water, water for livestock, electricity, in-fills, Kagisano-Molopo sanitation and job creation Source: Dr RSM IDP 2012/17

5.2 ECONOMIC PROFILE

Dr. Ruth Segomotsi Mompati District Municipality is located in the less densely populated and more impoverished western region of the North West Province. It is one of four district municipalities in the North West. The district is the largest beef cattle producing district in the country, known for the Bonsmara and the Hereford breeds. Locals sometimes refer to it as the ‘the Texas of South Africa’. Farmers also produce maize and peanuts for the national and the export markets. The administrative seat is Vryburg.

5.2.1 Employment

The official unemployment rate8 in the Dr. Ruth Mompati District is very high, with 31.6% of the population being unemployed in 2011. The larger share of this portion constitutes females at 37.3%, followed by males at 27.6% (Global Insight 2013).

Table 5.5 below illustrates the provincial and district formal sector employment. For the province, mining employs 34.9%, agriculture 9%, and the household sector 6.2%. For the district, agriculture employs 2.1%, household sector 0.7% and community services 0.6%.

Table 5.5: Employment by sector 9Region's share of national total (%) Formal Sector Employment North-West Dr. Ruth Segomotsi Mompati Agriculture 9.0% 2.1% Mining 34.9% 0.3% Manufacturing 2.4% 0.1% Electricity 5.0% 0.5% Construction 3.7% 0.3% Trade 5.1% 0.3% Transport 4.0% 0.2% Finance 2.4% 0.1% Community services 6.2% 0.6% Households 6.2% 0.7% Total 6.3% 0.5% Source: Global Insight (2013)

8 The unemployment rate represents the number of people that are unemployed (according to the strict definition) that are living in a region, taken as a percentage of the economically active population of that region. The strict definition of unemployment considers all people who are currently not working, but who are actively looking for work. It therefore excludes those who are not actively seeking work. These people, if they would like to work, are referred to as discouraged work seekers and form part of the non-economically active population. 9 The region’s share of national total employment is the contribution of this region to all formal employment in South Africa. In other words, it is the number of all employed people who work within the specific region divided by the number of people who work within the whole country. For example, if there are 100 working people in South Africa, and 12 of them work in this region, we would say that this region’s share of national employment is 12%. The regional share output can be categorised into the various broad or detailed economic sectors.

5.2.2 Gross Value Added

The economic sectors in an area are distributed into three main sectors, namely the primary, secondary and tertiary sectors. The primary sector consists of agricultural and mining activities. The secondary sector consists of the manufacturing, electricity, construction and trade activities. The tertiary sector consists of the transport, financial and community services. Table 5.6 illustrates the contribution of the different sectors to economic growth in the province and the district. In Dr. Ruth Segomotsi Mompati District the tertiary sector (73.7%) is the highest contributor, while the secondary sector is at 8.7% and the primary sector is at 17.6%. Table 5.6: Sectors contribution to economic growth Sector's share of district total (%) North-West Province Dr. Ruth Segomotsi Mompati District

Primary sector 43.4% 17.6% Secondary sector 8.3% 8.7% Tertiary sector 48.3% 73.7% Total 100.0% 100.0% Source: Global Insight 2013

According to Global Insight data for the 2011 period, as indicated in Table 5.7, mining (40.7%), community services (19.6%) and finance (12.1%) are the biggest contributors in the province. For the district, the sectors’ share of regional total indicates that community services (34%), finance (21%), agriculture and trade (11.8%) contributed the most.

Table 5.7: Gross Value Added per sector Gross Value Added by Region Sector's share of regional total (%) (GVA-R) North-West Dr. Ruth Segomotsi Mompati Agriculture 2.7% 14.3% Mining 40.7% 3.2% Manufacturing 4.5% 3.4% Electricity 1.6% 2.2% Construction 2.1% 3.1% Trade 10.1% 11.8% Transport 6.5% 6.9% Finance 12.1% 21.0% Community services 19.6% 34.0% Total Industries 100.0% 100.0% Source: Global Insight (2013)

Table 5.8 indicates the provincial and district’s contribution to economic growth. The province’s contribution to the economy was more in the tertiary sector and lower for the primary and

secondary sectors. For the district, the primary sector contribution was 0.5%, secondary 0.1% and tertiary the highest at 3.2%.

Table 5.8: Contribution to total economic growth (% point, Constant 2005 prices) Primary, Secondary & Tertiary Sector aggregates North-West Province Dr. Ruth Segomotsi Mompati District

Primary sector -0.7% 0.5% Secondary sector 0.2% 0.1% Tertiary sector 1.5% 3.2% Total 1.1% 3.8% Source: Global Insight (2013)

3.3.3 The Green Economy

There are various projects within the Dr. Ruth Segomotsi Mompati District with activities related to developing the green economy. There are environmental projects including the improvement of land-fill sites, veldt improvement and rainwater harvesting. Other projects are the field crop fencing, to prevent grazing and in some cases over-grazing by unattended livestock, and field crop improvement.

5.3 CONCLUSION

The Dr. Ruth Mompati District Municipality is characterised by relatively high levels of unemployment, poverty and educational challenges, including the shortage of schools and classrooms. These challenges combine to constrain the local economy and adversely affect economic and social development. The majority of the population is very young, which holds a lot of potential for the local economy if the challenge of education and skills development is overcome.

There are sectors with a comparative advantage such as financial institutions, community services, agriculture and retail which are a source of employment, and they boost the local economy. The tertiary sector plays a significant role in the local economy; however, other sectors should be explored that could have potential to create jobs and grow the local economy. Diversified economies tend to weather economic recessions better.

6. RURAL INNOVATION IN DR. RUTH MOMPATI DISTRICT MUNICIPALITY

6.1 INTRODUCTION

The rapid mapping survey instrument can be simply divided into five core sections, each composed of several questions that together provide evidence about the five main areas of interest. These areas are discussed in turn and the study concludes by discussing what the results of the survey are

able to inform us about rural innovation. The reader is again reminded that the discussion refers only to the sample obtained during the pilot study, so no further inferences can be made outside of the sample. Similarly, the study was a pilot study so the reliability and validity of the questions, the practical usefulness of the instrument and the sampling frame and methodology were in a process of development when the information was gathered.

A sample of 122 enterprises were visited and interviewed. However, several more enterprises were visited but not interviewed because no innovation activities were identified that took place during the years 2011 and/or 2012.

6.2 ENTERPRISE PROFILES

The first section of the survey instrument aimed at developing profiles of the enterprises, organisations and individuals that were interviewed during the Rural Innovation Assessment Toolbox pilot survey in Dr. Ruth Mompati District Municipality. Of the total sampled enterprises, 31 were found to be public enterprises, 57 were private enterprises and 34 were non-profit organisations (this is indicated in the Table 6.1 below). The referral and innovating enterprise identification method used in the sampling process seemed to generate a high number of private and non-profit enterprises in contrast to public enterprises. This distribution was expected given the high number of private enterprises in the economy generally. The number of non-profit organisations, which is slightly higher than that of public enterprises, includes volunteer groups, spiritual and religious groups, various social clubs, development NGOs and CBOs, etc. The high number indicates that they have an important role to play in the district, cannot be overlooked and must be included into the national system of innovation, especially as most concentrate on social development and welfare.

Table 6.1 also summarises the three types of enterprises in terms of statutory registration as a legal entity, registration for income tax purposes, economic sectors within which the enterprises operate and the dominant subsector within each economic sector, and participation in a larger group or company (including franchises).

If we look at statutory registration we note that the majority of public enterprises in the sample (87%) were registered with government departments. Just over half of the private enterprises (54%) were formally registered as legal companies (CC or PTY Ltd.). Of the remaining, private enterprises (21%) were registered as sole proprietors but 14% were not registered at all. The 2% of private enterprises registered as NPOs or with government departments cannot be explained accurately and is probably due to respondent or researcher error during the interview. Of the sampled Non-Profit Organisations (NPO), 65% are registered as either an NPO with the Department of Social Development (DSD) or as a Section 21 company with Department of Trade and Industry (DTI). Another 3% were registered with another undisclosed government department, and 9% were not

registered. Consequently, nine out of ten enterprises in our sample are registered as some sort of legal entity.

Of the 122 enterprises, 91 enterprises were registered for income tax purposes with SARS whereby the majority (90%) of public enterprises are registered for income tax purposes, followed by 84% of the private enterprises. A larger share of NPO compared to the public and private enterprises were not registered for income tax purposes with SARS, less than 45% of the NPOs that participated in the survey were registered. One possibility for this low number is that some of these are voluntary and informal community groups or associations.

Table 6.1: Share (%) of Enterprises/Organisations in terms of statutory registration, taxation, economic sector, group membership & output distribution by enterprise Type, (N = 122) Public Private Non-Profit Valid Profile information enterprises enterprises Organisations observations (n = 31) (n = 57) (n = 34) Statutory registration Business CC/PTY(LTD) 32 3 54 0 Registered with government 28 87 0 3 Department NPO/ Section 21 24 3 2 65 Cooperative 11 0 5 24 Partnership 2 0 4 0 Sole proprietor 12 0 21 0 Not registered 13 6 14 9 Income tax SARS registration 91 90 84 44 Exempted from business 5 0 2 12 Not registered 26 10 14 44 Economic sector Primary Sector 30 23 32 14 (Agriculture & forestry) (25) (71) (83) (100) Secondary Sector 13 0 18 9 (Manufacturing) (13) (0) (100) (100) Tertiary Services 79 77 51 76 (Community social services) (38) (67) (3) (81) (Trade and Finance) (26) (8) (76) (8) Part of larger group or organisation Part 45 77 19 29 Main territory of output distribution Sales output- Local/regional 65 19 68 59 Note: Valid Observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

More than 60% of the sample comes from the tertiary sector. The subsectors within the primary, secondary and tertiary sectors listed in Table 6.1 only demonstrate the most dominant subsectors in each of the three sectors. We see that the larger share of enterprises in the primary sector is engaged in agricultural activities, irrespective of whether they are public, private or non-profit enterprises. Interestingly, all the NPOs in our sample in the primary sector engage in agricultural activates. In the secondary economic sector, the larger share of enterprises is engaged in manufacturing activities. Here as well, all the private sector and NPO enterprises of our sample in the secondary sector engage in manufacturing activities. As we would expect there are no public enterprises engaged in this subsector. Lastly in the tertiary economic sector the largest share of enterprises are engaged in community social services. Interestingly, the numbers of non-profit organisations (81%) that engage in community services activities is higher than that of the public enterprises (67%). The second largest share of tertiary sector is trade and finance, with one out of four enterprises coming from the trade and finance sectors dominated by private enterprises. Perhaps most significantly is that from the sample, 79 of the 122 (65%) sampled enterprises are engaged in the tertiary sector. This suggests that there is significant innovation taking place in this sector and that it deserves increasing attention.

Not all enterprises/organisations are part of a larger group or organisation; however, the majority of public enterprises as expected are part of a larger group or organisation, e.g. local municipality being part of a district municipality. The highest share (77%) of public enterprises that were included in the survey was found to be part of a larger group or organisation.

Lastly, when it comes to the distribution of output, more than half of the sampled enterprises are distributing their output locally.

6.3 LOCAL UNDERSTANDING OF INNOVATION AND SOCIAL INNOVATION

Following the enterprise profiling section, the questionnaire focused on paying particular attention to local understandings of innovation and social innovation in the Mopani District and attempting to understand the purpose of innovation among the sampled enterprises. From the analysis of the qualitative data it became clear that most of the respondents in the survey had an understanding about innovation. Many of the responses had to do with ‘bringing about change within an organisation’ and ‘doing things differently’. Other responses were more specific and related to technology: ‘bringing in new technology’ and ‘using old technology in new ways’. There were also comments relating to ‘creating something new’ or creating something that hasn’t existed before’. A small share of the respondents acknowledged having no idea of the term innovation, but the screening process indicated that despite this they were engaged in some form of innovation activity such as invention, adoption, adaption or diffusion. This section provides an analysis of the social

innovation within the DRM district. The section will focus on two main aspects of social innovation in the district. The first aspect will focus on the respondents’ understandings of social innovation. The section allowed participants to explain social innovation in their own terms and unpacks the response provided and describes the understandings provided in a number of themes. The second aspect of social innovation is the presence of social innovations in the DRM district. These social innovations will also be discussed as aspects of innovation value chains (IVCs) within the district. One overarching theme is that Aspect 1 (understandings of social innovation) is related to whether or not Aspect 2 (acts of social innovation) is applicable. The discussion will conclude with an analysis of this overarching theme and explain the importance of social innovation in the DRM district.

6.3.1 Local understanding of social innovation

There is little knowledge of the terms social innovation or social technology in the district. The majority of respondent enterprises explain that they simply ‘don’t know’ what the term social innovation means. The enterprises are not able to define clearly their understandings of social innovation because the majority have never heard the two terms, ‘social’ and ‘innovation’, used in conjunction. In some instances enterprises are able to loosely define social technology, but there are even fewer attempts to explain social innovation. Social technology is explained as ‘a means of communicating through the social network’. This explanation is a reference to making use of social networking facilities (often ICT based) to ensure better communication between people in the communities. This understanding of social technology is not related to social upliftment, in terms of addressing social ills. The conceptualisations of what social innovation is are broad, and more often than not, equated with community development and upliftment. The enterprises that are able to define it are usually in the community services sectors and the social innovation concept is interwoven with their goals and objectives as enterprises that are there with the purpose to address social ills and provide complementary and supplementary services to those provided by the state. Some definitions include ‘social innovations are innovations that work for all’, ‘people coming together to achieve a common goal’, ‘innovations that benefit more than one person in a community’ and ‘introduction of something new that benefits the people’.

The understanding of social innovation as a way of addressing social ills within a specific community was the main focus in the definitions provided. The social innovations are mainly activities which involve addressing the community’s primary social needs. These social ills and needs are defined by the people in the community and the social innovations are attempts to address these problems in a new way, because the existing means of addressing the social ills and needs are inefficient and in many instances non-existent. The social innovations are responses to the community needs. Each community is different and as a result the required social innovations are different. The social innovation mentioned in the DRM district are mainly focused on improving education, addressing HIV and AIDS awareness and prevention as well as social innovations geared towards addressing food shortages in the communities. Examples of these social innovations will be discussed in the sections

below. While the majority of organisations are not able to define social innovation it does not prevent them from introducing new activities (products, process and organisational arrangements) that have distinctive characteristics of social innovation as defined in the RIAT questionnaire.

Social innovation is taking place in the DRM district and can be identified in multiple sectors (including both the private and the public registered enterprises). Social innovations are a focal point of many enterprises. The enterprises that are involved in social innovation understand these to be innovation activities with direct social benefits. There are instances of innovations which are geared towards social upliftment and also benefit financially from the innovation activities within an enterprise. One such example is ‘Jet’s training school’, a private enterprise established in 1998 and serving the education and training sector. The enterprise adopted a new 12 month internship programme and started offering ‘mobile training’. The enterprise visits enterprises and train people who register with the enterprise. The adoption is of a product, in this case a new service of bringing the training courses into the communities where there is a demand. The adaption of the ‘mobile training’ took place in 2012 when the enterprise started providing ‘artisan qualifications’, which was not offered initially in the ‘mobile training’. The ‘mobile training’ service was adapted due to the lack of a ‘college in the local community that trains people to be artisans’. The enterprise is a private enterprise focusing on improving their financial gain as a business; however, the enterprise has managed to fill a much needed position in the DRM district. The enterprise has filled a gap in the community. This gap was the need for training to take place within a local context. They provide a service that was originally not offered. This is a good example of social innovation that can be profitable. This type of innovation can be viewed as a move towards the private sector addressing social problems by providing services when other means are not functioning to address the lack of certain services in the communities. The IVC starts with an adoption that is economically driven and then social upliftment is seen as a by-product of the successful adoption.

An example of a social innovation directly aimed at social upliftment and benefit is the Department of Agriculture and Land Reform with their diffusion of a new product called the ‘earthbox’. The department supplied the maintenance-free boxes, inputs and limited equipment. This initiative was started with the intention of developing agricultural skills in the local communities by offering an easy and affordable innovation which would offer the opportunity for households to improve their production of crops for household consumption. In this way, the department intended to improve local food security. The ‘earthbox’ is an example of a social innovation because it was introduced to reduce food insecurity in rural areas as well as making food production possible on a subsistence or small commercial scale. Interestingly the Department of Agriculture respondents had no understanding of the term social innovation, but they were involved with a project geared towards social upliftment through the provision of a new product that would reduce food insecurity in rural areas. This exemplifies that an understanding of social innovation is not essential in carrying out innovations that contribute to social upliftment.

Another example of a social innovation is introduction of a soup kitchen feeding programme at ‘Amanda’s crèche’. The soup kitchen is an example of a social innovation that involved the adoption of a service. The innovation resulted from the increased awareness of hunger amongst the children. The children would arrive at school without having breakfast, lunch and in some instances dinner the previous night. This was attributed to the increase in poverty in the local community. The social innovation has now been used for two years and has also contributed to an increase in the number of registered children attending the crèche. This social innovation involves addressing a social problem identified within the activities of the school as well as the community. The school incorporated the feeding scheme to ensure that the children are well fed in order to encourage early childhood development. This social innovation is made possible through the provision of resources from enterprises in the local district. Many of the resources, such as food and cooking utensils, were sponsored by private enterprises. Social innovation in this instance was made possible through the donation of resources, without the continued donations the innovation would not be possible.

Despite the fact that these examples illustrate social innovation activities and some awareness of social innovation in the district, quantitative data suggest quite the opposite. As indicated in Table 6.2 below, most enterprises public (65%), private (74%) and especially NPOs (88%) are not aware on the concept ‘social innovation’ (only one out of four enterprises are aware of the concept). These results are especially surprising in the case of NPOs given that it would be expected that these enterprises should have some knowledge of social innovation. On the other hand, with regards to purposes of innovation activity, most public enterprises and NPOs view innovation as being for society wellbeing and welfare. However, most private enterprises (88%) expect innovation activity to be a source of direct economic benefit but in some cases engage in social innovations to achieve this.

Table 6.2: Share (%) of enterprises aware of social innovation and main purpose of innovation by enterprise type, (N=122) Public Private Non-Profit Valid Awareness and main purpose enterprises enterprises organisations observations (n= 31) (n= 57) (n= 34) Awareness of concept social innovation

Aware of social innovation 30 35 26 12 Not aware 92 65 74 88 Main purpose of innovation activity

Direct economic benefit 61 16 88 18 Society wellbeing and welfare 54 77 5 79 Basic subsistence purposes 5 3 5 3 Expand frontiers of new knowledge 1 3 0 0 Note: Valid Observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

Only a small number of enterprises (less than 5%) engage in innovation activity for basic subsistence purposes and only 1 enterprise out of the entire sample uses innovation as a source to expand new knowledge.

In conclusion, the definitions of ‘social innovation’ can provide insight into local understandings of the terminology. The definitions bear some similarities to the definition used in the RIAT questionnaire. The main purpose of gauging the various understandings of social innovation should not be used to determine whether or not the social innovations are taking place, rather, they should be used to identify new insight into whether the terminology has gained traction in the local communities. In the case of DRM district the concept of ‘social innovation’ has not trickled down clearly into the local context. This lack of understanding in the district does not act as an indicator of whether or not social innovation takes place. The cases above show how lack of understanding terminology does not restrict social innovation from taking place. There were two main motivators for social innovation in the cases mentioned above. They are both similar with regard to the outcome of the innovation, which is to say, is the outcome of addressing social ills and/ or addressing a social need in the community. However, they differ in their ways of innovating. In the first case of ‘Jet’s training school’ the innovation of a mobile facility serves two important (but separate) needs. The first is the financial gain of the enterprise and the second is addressing a social problem, as expressed by the community. In the second case of ‘Amanda’s crèche’ the social innovation is aimed directly at addressing hunger in children. However, in the second case the social innovation is only possible through the sponsorship. These two cases show that social innovation can be achieved using two financial means. The first relies on own financial income to carry out the innovation which benefits the community in the long-term if there are artisan jobs available after training. The second relies on continued financial support from sponsors and donors from the private sector. Therefore social innovations should not be understood as purely socially driven activities.

6.4 INNOVATION VALUE CHAINS AND INNOVATION TYPES

The innovation value chain (IVC) is described as consisting of four innovation activities: invention, adaption, adoption and diffusion. There are few combinations of the value chains that are occurring in our sample of Dr. Ruth Mompati District – that is to say, the IVC is not linear and the activities need not follow any specific order in a certain location or enterprise. The section starts with a discussion of the prevalence of innovation activities in the Dr. Ruth Mompati District and aims to understand what innovation entails within the context of DRM by presenting the innovation value chains as manifested in the DRM. The common innovation activities and types in the district are presented and discussed in detail.

The first major innovation activity is that of adoption - typically the adoption of products, processes or marketing strategies. These adoptions usually stand alone and are not followed or preceded by

another innovation activity, such as adaption, diffusion or invention. Innovation involving adaption is the second most widespread innovation activity in our sample of the district. Innovation involving diffusion by adopting, adapting or inventing enterprise is also a part of the IVC, but to a lesser extent. These themes mentioned are backed by examples in the section to follow.

6.4.1 Adoption

Innovation in our sample of the DRM district is mainly focused on the adoption of products, processes and marketing strategies with little apparent adoption involving organisational arrangements. Adoption usually consists of the adoption of a product as is evident from the example of an enterprise in the education sector, called ‘Amanda’s crèche’ established in 2010. The enterprise expressed that their innovation involved the adoption of a new product, in this case a service. The service adopted is a ‘soup kitchen’ for the school children. The enterprise started with providing day care facilities and then adopted the new service of feeding the children at the school by providing them with breakfast and lunch to ensure that children where fed two nutritionally balanced meals daily. They started the kitchen with the intention of addressing malnutrition in the children attending the crèche. This adoption has seen an increase in children attending the crèche. The enterprise was only involved in this one innovation activity during 2011. This innovation is described as making a difference in the crèche’s objectives of addressing early childhood development. While the innovation activities mainly involve adoption of fairly simple innovations, it is clear that a single adoption can have a big impact on the core objectives of an enterprise, as illustrated by the example whereby increased enrolment enables more children to be exposed to early childhood development. A similar trend and emphasis on adoption is evident in many other examples identified during the research in the district. These adoptions are often involve low-technological innovations but such innovations have a great impact because they require little or ‘no training’ to address a request made to the enterprise [by the community].

The ‘Fount farm’ is an agricultural enterprise, which adopted a ‘slaughter house’ into their production process, to enable the enterprise to slaughter their livestock on-farm and reduced the cost of transporting the livestock to abattoirs. This new process enabled the farm to cut out the middle man and sell directly to the general public. The ‘slaughter house’ was adopted in 2012 and replaced the process of selling the produce to the abattoir. This has enabled the enterprise to reduce transportation costs, get a better price for their produce and allowed the owner to regulate the price of meat produced and sold. This process innovation was an attempt to reduce the overall production and selling costs and is said to be more cost-effective than the previous approach of engaging with the retailers through the abattoir. The adoption of additions or variations to the production process can be understood as saving on costs and ensuring greater market access for the enterprise.

While the two enterprises described above, and several others, suggested that low technological innovations have been fundamental to the success of the enterprise, there are instances in the

district where the innovations adopted are highly technical and require greater skills. One example of a highly technical adoption is ‘Consideration farm’, established in 1990. This enterprise adopted a new process of breeding ‘climate tolerant’ cattle. The process adopted is known as In Vitro Fertilisation (IVF). This is a process by which an egg is fertilised by sperm outside the body. This process allowed the breeder to match the genetics needed to create a cattle breed which may be more resistant to the drought conditions in the district. This process was started in 2011 and required the importation of semen from Australia. This is one of the few farms, in South Africa, that is equipped for the procedure of in a fully equipped laboratory situated on the farm premises.

6.4.2 Diffusion

Enterprises in our sample of the DRM district have an affinity towards incorporating diffusion into their innovation endeavours. While the diffusion may not be as prominent as adoption it does feature in many of the enterprises and is explained as important in the transfer of skills into the district. One example is ‘Champ Clinic and Youth Centre’, an enterprise in the health sector established in 2004. The ‘Champ Clinic and Youth Centre’ focuses attention on a variety of core functions including preventing minor human ailments, sexually transmitted disease management, voluntary HIV testing and counselling, and life skills development in local schools. In 2011, ‘Champ Clinic and Youth Centre’ adopted a new programme called TADA (Teenagers against Drug Abuse). This programme was an adoption of an ‘organisational arrangement’ by creating leaders or pupil supporters which coordinate self-help groups in the local community. The programme is aimed at learners between the ages of 13 an 24 years of age. The clinic collaborates with local schools to introduce these self-help groups, as well as offer insight into ways of dealing with drug and substance abuse. In 2011 the clinic was able to diffuse the new service in ‘how to carryout awareness campaigns on the fight against drug and substance abuse’. The IVC of the enterprise starts with the adoption of an organisational arrangement which is followed by the diffusion of the ‘TADA toolkit’ which is adopted by the programmes established in the schools.

Another example of diffusion in the DRM district that incorporates diffusion is the introduction of the ‘earthbox’ by the Department of Agriculture and Land Reform in 2011. The ‘earthbox’ is a portable, re-usable, maintenance-free container gardening system that produces a 60% higher yield than a conventional garden of the same size – using half the fertiliser and 40% less water. This new product is explained as being a low-technological innovation. The enterprise diffused the ‘earthbox’ concept to small-scale farmers as well as backyard cultivators in the district. The approach used in the diffusion of the ideas above is described as ‘formal’ in the sense that it was part of an official programme.

The IVC that consists of diffusion always includes another innovation activity, as illustrated in these two examples. This activity is the initial adoption by the organisation doing the diffusion. Diffusion as a part of the IVC is not type-specific, but can involve products, processes, marketing strategies or

organisational arrangements. This is important to recognise because it acknowledges that diffusion of any innovation type is possible, whether it be an organisational arrangement, product, process or marketing strategy. The process of diffusion needs to receive more attention, or in-depth research, to ensure that the difficulties of diffusing certain innovations can be clearly understood. One suggestion would be to focus not only on the difficulties of diffusing but also the factors that encouraged the diffusion of the particular innovation and the existence of similar innovations.

The IVC consisting of adoption and diffusion is also prevalent in the commercial private agricultural sector. ‘ABC Potato Farmers’ was established in 1988 and consists of 180 hectares of farmland. The enterprise produces mainly beef, wheat and potatoes. Recently, potatoes have become the main focus of their innovation activities. In 2012 the enterprise adopted ‘easier cultivated potatoes’ (a type of biotechnology developed potato) that uses less water and is less vulnerable to disease. The enterprise claims that these are also potatoes with better nutritional value, as a result of their diseases resistance and reduced water use. These ‘easier cultivated potatoes’ also offered new marketing opportunities. The adopted innovation was subsequently diffused, in the same year, to neighbouring potato producing farmers.

6.4.3 Adapt

The last apparent IVC component is that found in enterprises that adapt their own or others’ innovations. Adaption is irregular with regard to how often it occurs and in the majority of the enterprises this adaption entails firstly adopting ideas from another enterprise in the same sector. In our sample of the DRM district the adoptions are usually followed by adaption to ensure appropriateness for the local setting. The adaption is deemed appropriate once it can perform the desired functions, for which it was introduced, within the enterprise environment. Adaption ensures that the innovation functions in the local context as well as the enterprise. The adoptions are usually from surrounding enterprises and these adoptions usually have to be adapted to the needs of the enterprise that has adopted it. One example of innovation adaption is ‘Jet’s Training School’, a private enterprise established in 1998 and located in the education and training sector. The enterprise adopted a new 12-month internship programme and offering mobile training facilities. The enterprise visits other enterprises and individuals based in local villages and trains people who register with ‘Jet’s Training School’ and the locally based organisations. The adoption in this case is a new service of bringing the training courses into the communities where there is a demand. The adaption of the ‘mobile training service’ took place in 2012 when the enterprise started providing ‘artisan qualifications’ as part of this mobile service. The mobile training service was adapted due to the lack of presence of a local college to train artisans. IVCs in DRM that consist of adaption often occur as a need is identified or a niche opens up in the market.

6.4.4 The ‘innovation trail’ - referral method

The DRM district sample results expressed a new aspect of the IVC that was previously unacknowledged in the earlier pilot phase in the districts in the Limpopo and Eastern Cape Provinces. This new aspect of IVC is the tracking of innovation activities which cut across sectors as well as enterprises. The example (explained in greater detail in Section 7) is of the collaboration between agricultural and light engineering enterprises. ‘Peanut Farm’ in collaboration with AB engineers developed ‘The Peanut 100 Machine’. The idea of tracking the actual innovation allows for the opportunity to properly make use of the referral method of snowballing. The IVC is clear and concise, if need be one could also incorporate the institutional environment into Diagram 6.1 to explain the supply of insight, resources and funding if it exists. Diagram 6.1 below shows how the IVC can be understood in relation to the actual innovation whether it be a product, process, organisational arrangement or marketing strategy. It may be worth considering as a way of understanding what contributes to the success of a single innovation and who are the actors involved in innovation invention, adoption, adaption and diffusion activities. Diagram 6.1: IVC for ‘The Peanut 100 Machine’

Peanut Farm; No social benefit; purely to improve AB Construction: profit (engineering company) No social benefit; purely to Invention improve profit of ‘The Invention Peanut of ‘The 100 Peanut 2 Machine’ 100 (2012) Machine’ (2012) 3 1 Adaption of ‘The Peanut 100 Adaption: Improved on a Machine’ worked in ‘Ripper’ on the land, added collaboration with Peanut markers to draw lines on Farm and Other Farm (2012) ‘The Peanut 100 farm land (2012) Machine’ Innovation Value 3 Chain in the Adoption of a new tractor, North West internal GPS system to Province Diffusion of improve harvesting processes (2012) ‘The Peanut 100 Machine’ (2012)

Diffusion of ‘The Peanut 100 Machine’

(2012) Other Farm; No 4 social benefit; purely to improve profit 4

Adoption of ‘The Peanut 100 Machine’ (2012) 26

The IVC invoked can be traced due to the referral methods being used to their full extent. The referral method created a kind of ‘innovation trail’, which could trace the various actors/ enterprises involved in the invention, adoption, adaption and diffusion of the innovation. By following the ‘innovation trail’ of ‘The Peanut 100 Machine’ a clearer picture of the IVC is portrayed. This approach could also offer the possibility of finding out where the ‘trail’ starts and where it ends, if it ends. One could also consider the time factor related to ideas, invention, adaption and diffusion and possibly see if further adaption takes place.

In Section 7 we go on to exploring the innovation value chains (IVC) even further, most evident from the sampled enterprises in Dr. Ruth Mompati District. This is done by using two case studies of innovating enterprises, one of which is the Peanut 100 Machine.

6.4.5 Innovation activities in DR. Ruth Mompati District (2011 – 2012)

Table 6.3 presents a summary of innovation activities in 2011 and 2012 by enterprise type. The column of valid observations indicates the overall participation of sampled enterprises in innovation activities during both years. In both years the rate of adoption was the highest followed by adaption. Adaption was followed by diffusion. Invention is the least common innovation activity undertaken by enterprises in the sample. It is important to note that all types of innovation activities made progress from 2011 to 2012.

Table 6.3: Share (%) of Enterprises engaged in innovation activities by enterprise type, 2011 & 2012, (N = 122) Public Private Non-profit Innovation Valid enterprises enterprises organisations activity observations (n= 31) (n=57) (n= 34) 2011 2012 2011 2012 2011 2012 2011 2012

Invent Yes 4 2 3 3 5 2 0 0 No 118 120 97 95 95 98 100 100

Adopt Yes 88 90 68 65 72 84 76 65 No 34 32 32 35 28 16 24 35

Adapt Yes 21 33 6 23 28 37 9 15 No 101 89 94 77 72 63 91 85

Diffuse Yes 9 16 10 13 2 12 15 15 No 113 106 90 87 98 88 85 85 Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

In both 2011 and 2012 the rate of adoption was higher followed by adaptation of innovation. In 2011 NPO sector come out as a leaders in adopting innovations, with 76% of enterprises adopting innovations. It 2012 the lead was taken by private enterprises, with 84% of respondents adopting

innovations. Adaption, on the other hand was mostly driven by private enterprises (28%) in 2011 and in 2012 (37%).

In conclusion, this section has focused on the three themes of IVC in the DRM district. The first main theme identified is adoption of processes, products and organisational arrangements. The second emphasised that diffusion is a part of the IVC and that it usually occurs in conjunction with another activity in the IVC, such as adoption. The third theme identified is the importance of adaption of innovations to ensure greater success within the enterprises. The section then provided an alternative approach to studying IVC in a rural context by suggesting that we take a look at the ‘innovation trail’ established through the referral process to ensure a more in-depth understanding of the IVCs. Lastly, less than 5% of enterprises engage in inventive activities in Dr. Ruth Mompati district. Adoption is the most common type of innovation, dominated by NPOs in 2011 and private enterprises in 2012. Adaption is the second most common type of innovation whereby the number of enterprises that engage in adaption activities increased by about 10% from 2011 to 2012. Only one of five enterprises in our sample engages in diffusion of innovation.

7. TWO ILLUSTRATIVE EXAMPLES OF INNOVATION IN DR RUTH MOMPATI

7.1 INTRODUCTION

This section presents the innovation value chains that occurred in two selected enterprise examples when they engaged with a specific type of innovation. The section concludes with a comparison of the two examples, highlighting the similarities and differences. In the process of selecting examples of enterprises for this section, the enterprises had to be from different economic sectors. These illustrative examples highlight a variety of innovation activities and innovative patterns within enterprises. In so doing, they illustrate the overall innovative performance of these enterprises, the nature of the innovation activities carried out, the different knowledge bases underlying the innovation processes, and the different patterns of interaction through which enterprises generate, interact and diffuse innovations.

7.2 EXAMPLE 1: WILDSILK

Wildsilk is a non-profit organisation that innovated between 2011 and 2012. The objective of this enterprise is to harvest and process silk produced from cocoons of the silk-producing moth, commonly called the ‘silkworm’. These cocoons are collected, cleaned and degummed by community members by hand. Cocoons are commonly found in mopani and acacia trees as gonometa moth larvae (silkworms) consume the leaves of these trees. The primary economic sector in which Wildsilk operates is the manufacturing sector.

7.2.1 Description of the enterprise and innovation activities

Wildsilk was founded in 1997 by community members. However, a number of stakeholders came together to develop the organisation and the production of wild silk. Currently, Wildsilk is not fully registered as a business and consequently also not registered with South African Revenue Services (SARS) for tax purposes. However, they are in the process of registering. The produced yarn has not yet been taken to large commercial markets but was only been sold in the local market.

Prior to the establishment of a gumming plant, community members in the village spun yarn by hands from African wild silk moth cocoons. This process was not that efficient and highly time- consuming. Consequently, the Council for Scientific and Industrial Research (CSIR) got involved in researching the quality of the actual silk fibre produced, skills transfer, the creation of a viable market for the silk and a commercial pilot. At the CSIR offices in Port Elizabeth, natural fibres such as wild silk are being used to create exciting new fabrics. It was inevitable that the various stakeholders would notice the economic potential of this NPO and provide the necessary support structure.

7.2.2 Innovation value chain

Wildsilk is working closely with the Department Trade and Industry, North West Province Department of Economic Development and Tourism, Northern Cape Department of Economic Affairs, Dr. Ruth Mompati District Municipality and Kagisano Local Municipality, local community, the Tlou le Tau and Ba Ga Mariba tribal authorities and the CSIR. In the past two years stakeholders agreed that CSIR from Port Elizabeth office will lead and manage Wildsilk. CSIR was involved in acquiring the new building and equipment for the project. The current manager of the enterprise is also appointed by CSIR. Other stakeholders contribute to the success of the Wildsilk enterprise. North West Province Department of Economic Development and Tourism was the first stakeholder to fund Wildsilk. The tribal authorities manage and control the fields; therefore, they grant permits to community members for the right to harvest cocoons.

Adoption process: Wildsilk adopted an innovation process of producing or turning hatched cocoons into yarn. Yarn is further used to produce fabrics. In 2011 Wildsilk obtained buildings and equipment for a more efficient production of yarn and other fabrics. Furthermore, the necessary local management system together with general project management was provided. The enterprise adopted a degumming plant from CSIR. CSIR’s Textile Technology Division from Port Elizabeth office implemented technologies for the harvesting, cleaning and degumming of the wild silk cocoons, which are found in acacia or mopani trees. The degumming process includes hand spinning, hand weaving, sewing and dyeing. CSIR further trained personnel on how to operate the machinery. The degumming plant is a chain of machines performing different functions. These include producing sliver web (performed by card opener), spinning single ply yarn (performed by spinning machine), packaging single ply yarn (performed by assembler winder) and other functions.

7.3 EXAMPLE 2: PEANUT FARM

The Peanut Farm, briefly mentioned in Section 6.4.4 with its complete IVC, is a registered private enterprise established in 2002. This enterprise in the agricultural sector is considered a family business, the land has been passed from father to son for many decades, with its main activities to grow, produce, harvest and sell agricultural products to a variety of people and organisations. Some of the key types of products are corn, peanuts, horses and beef.

7.3.1 Description of the enterprise and innovation activities

Peanut Farm is a good example of an enterprise that innovates regularly for the purpose of increasing its profits. Amongst many innovation activities, the invention of ‘The Peanut 100 Machine’ stands out. ‘The Peanut 100 Machine’ is machinery developed to improve the efficiency of harvesting peanuts. The idea to develop ‘The Peanut 100 Machine’ was conceptualised by the owner of Peanut Farm. This idea was taken to AB Engineers. This is a light engineering/manufacturing enterprise that collaboratively developed this idea into a final product in the rural setting of the local municipality in 2012.

This invention was created to reduce the size of the workforce in the farm’s harvesting process and to reduce the harvesting time. The designers insisted that the less amount of contact between the peanuts and human hands the better it would be for the overall quality of the produce. ‘The Peanut 100 Machine’ is attached to the rear of a tractor and improves the harvesting process of peanuts by sucking up the harvested peanuts and depositing them in the trucks that drive alongside ‘The Peanut 100 Machine’.

The news of ‘The Peanut 100 Machine’ was spread locally by both the designer and manufacturer, following which other farms became interested in this implement. This interest provided the opportunity to diffuse the machine. However, the prerequisite for the distribution of the machine was that Peanut Farm had to illustrate its ability before other farms would be interested in purchasing the product. As a result, approximately a year after the invention of the product other farms ordered and adopted the machine and one, ‘Other Farm’, adapted ‘The Peanut 100 Machine’ by changing the angle of the delivery pipe that blew the peanuts into the collection containers that follow machine as the peanuts are picked up from the ground and then blown, through this adapted pipe, to the peanut capturing containers.

7.3.1 Innovation Value Chain

‘The Peanut 100 Machine’ is an example of the IVC that consists of various innovation activities. It started with the invention of the product (an innovation activity seldom found in the rural setting). Not only is it rare to find an example of invention in a rural district, it is even less common to find an example of IVC which can be traced across multiple enterprises. The invention of ‘The Peanut 100

Machine’ resulted from the collaboration between two enterprises from different sectors, one being from agricultural and another from engineering/manufacturing sector. This same innovation was then adopted by other enterprises, after the diffusion of the innovation by Peanut Farm and after successful adaptation to the innovation by Other Farm. The IVC in this instance contains all types of innovation (invention, adoption, adaption as well as diffusion). This IVC can be illuminated through the tracking of a single innovation in multiple enterprises. This would be a new approach of tracing innovation and serves as a good example of how an IVC of a specific innovation can be understood when multiple enterprises are involved.

7.4 COMPARISON OF THE ILLUSTRATIVE EXAMPLES

Do rural people benefit from innovations? Based on the two examples presented above, the answer is ‘Yes’ and ‘No’. In one example we find a strong theme of social innovation, however the other example uses innovation for economic profit.

In the first example of Wildsilk an innovation activity of organisational arrangement occurred and rural residents appear to have benefitted from this activity. More in depth research may illustrate differences in how and in what ways people benefitted. Wildsilk adopted an innovation process of producing or turning hatched cocoons into yarn instead of doing it manually as previously. This innovation was achieved with financial and managerial support of various government and non- government organisations. However, it still relies on this support.

In the second example an invention has occurred, followed by adoption, adaption and diffusion. The invention of a product rarely happens in rural settings and the invention of ‘The Peanut 100 Machine’ is indeed one of the very few we identified. This product did not benefit the community at large; however, it did benefit the production value chain of peanuts in the local and neighbouring communities through quicker harvesting and delivery of apparently better quality of peanuts to the market.

The key difference between the two examples is the sector of innovation activity. Given that the first example is that of a non-profit organisation, innovation mostly benefited the local community as expected. However, the intention is sustainable harvesting and processing of better quality wild silk in a shorter period by using locally available natural fibre. Through this action it is expected that part- time and permanent jobs will be created and the manufacturing value chain expanded, improved and localised. On the other hand, the second example is that of a private enterprise - thus, not surprisingly, the invention of the product, followed by its adoption, diffusion and adaption, was motivated by direct economic benefit such as increase in market share or profits. Here the purpose was to improve quality, mechanise the harvesting process and reduce costs. As such it is possible that some seasonal unskilled labour may be lost.

8. MICRO OR INTERNAL ENVIRONMENT OF THE ENTERPRISE

This section provides a glimpse of the internal organisational environment of public, private and non- profit enterprises sampled in the DRM District Municipality. Internal factors, such as the access to basic services including water and electricity as well as access to resources such as infrastructure, scientific knowledge, educational facilities and skilled personnel are deemed likely to influence and enable the ability of enterprises to engage in innovation activities. Some enterprises, particularly those situated near the major towns, are likely to have access to a range of facilities even though they might not have ownership of these facilities, i.e. enterprises and organisations close to towns are able to access libraries and through libraries or the local post office they might access fax machines, copiers, computers and the internet. The study was also interested in where enterprises most often carried out their innovation activities.

8. 1 INNOVATION ENABLING ENVIRONMENT

The internal environment is composed of the elements within the organisations, including current employees and the basic services which are available to the enterprises (specifically referring to energy, information and communications technology (ICT) and transport) and which could have an important role to play in the innovation abilities of enterprises. The research was specifically interested to find out if the internal organisational environment was conducive to the innovation activities identified in the various enterprises. Here we provide a table and a basic description of the internal organisational environments which provided the opportunity for innovation activities.

It is evident from Table 8.1 that most innovation activities take place in the community/at home (47%) or on the business premises (29%). Smaller shares are conducted on farmlands or fields (13%), followed by factories or workshops (7%) and very little in higher education institutions (2%) and primary or secondary schools (2%).

Most enterprises have explained that they have access to basic facilities such as running water, toilets that work and electricity. This access to basic resources is deemed valuable for the innovation activities of the enterprises. When the organisations have access to the basic resources, their innovations are less sporadic and more controlled. When basic services are provided, the enterprises in the DRM district are able to invest more money into more aspects of their innovation activities, including further skills development. There is a correlation between the ability to invest in innovation activities and the access to basic services. With regards to ICT-related or educational resources, less than half of our sample has access to libraries and less than 10% has access to science laboratories. The cell phone is the most utilised ICT device in all types of enterprises (97%). However, this device is not used exclusively for innovation activities; only 54% of the enterprises use a cell phone for innovation purposes. Other resources like computers and internet are available for most of the enterprises of the sample. Similar to cell phones, although more than 70% of the enterprises have

access to computers only less than 50% utilise them to access the Internet. Roughly one out of three enterprises is connected to the Internet.

Table 8.1: Share (%) of enterprises with direct access to resources and facilities for innovation, (N = 122) Share (%) Share (%) Share (%) Valid Non-Profit Share of Public Private observati organisa- Total enterprises enterprises ons tions (n=122) (n= 31) (n= 57) (n= 34) Main place of carrying out innovation activities

Farmland or field 16 6 21 6 13 Business premises 35 19 37 24 29 Community/Suburb/Home 57 59 30 65 47 Factory/Manufacturing/Workshop 9 0 12 6 7 Higher education institutions 2 6 0 0 2 Primary or secondary school 3 10 0 0 2 Direct access to resource

Plumbed running water 114 94 95 91 93 Flushing toilets 106 84 89 85 87 Electricity 108 90 88 88 89 Library facilities 59 61 46 41 48 Science laboratory 11 3 9 15 9 Computer 92 68 79 76 75 Landline 61 39 54 53 50 Cell phone 118 94 98 97 97 Internet 86 52 75 79 70 ICT devices most used for innovation activities

Cell phone 66 68 40 65 54 Landline 8 6 7 6 7 ICT hardware to access Internet

Computer/tablet 49 29 49 35 40 Smart/cell phone 5 6 4 3 4 Don't have either 34 45 21 24 28 Internet connecting device for innovation activities

Own 3G/cellular network 40 35 32 32 33 Own satellite 13 3 11 18 11 Own ADSL 34 16 35 26 28 Note: Valid Observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

8.2 THEME 1: INNOVATION AS NEW IDEAS AND CREATIVE THINKING IN AN ENTERPRISE

The first theme that is typical of the DRM district is based on responses which include phrases such as ‘new ideas’ and ‘creative thinking’ in the self-learning sections. The respondents have shown that they have learnt that innovations are about new ideas - whether they are products, processes,

marketing strategies or organisational arrangements - which have been considered when wanting to make improvements in the enterprise or community. The new ideas are understood as the end result of the creative thinking process. This process involves being aware of what the enterprise entails, through basic skills development and sector-specific skills development training, in order to establish where the new ideas can be introduced into the enterprise to ensure the innovation. One response that stands out is ‘Thabo’s furniture manufacturers’. This private furniture manufacturing enterprise started in 2009. Thabo explained that he had learnt that innovation is about ‘[being] creative and [to] come up with new ideas. I now realise that [I] am also innovative because [I] am using waste products to create something new.’ Thabo was able to understand that the activities within his business could be understood as innovation and that the reason for his innovation was the result of a process of creative thinking and the introduction of the new idea. Thabo adopted a new product in 2011, when he started making furniture from waste products. Thabo started the interview process explaining that he had no idea about what innovation meant. This is a good example of how enterprises are able to associate the concept of innovation to the activities of the enterprise. If innovation is going to be explained in the district it should be done from the perspective of the enterprise. Innovation terminology should reflect the activities of the enterprises rather than defining innovation from the start. The self-learning component offered an opportunity for the participant to express what they now understood to be innovation in the enterprise. The self- learning component encouraged the participant to engage with the terminology and make sense of it in terms of the enterprise’s activities. The self-learning component has revealed that enterprises are internalising the concepts of innovation and are able to link them to the everyday activities of the enterprise. The enterprises that express this awareness of innovation do not make specific reference to any particular type of innovation but rather express that enterprises can identify with the concept of innovation in broad terms. The self-learning component revealed that individuals use the idea of innovation as new ideas and as having importance in the day-to-day activities of the business.

8.3 THEME 2: INNOVATION IS MORE THAN INVENTION, IT IS A CONTINUOUS PROCESS

The second theme that can be seen in the DRM district self-learning responses includes responses that make references to the idea that notions of innovation have been broadened. The term innovation has been understood in a new light, one which includes multiple types of innovation. Innovation is not limited to being defined as purely invention. The broadening of the definition is important when identifying enterprises in the district, as well as ensuring that enterprises are not subjected to a single category of innovation activity. The broadening of the definition of innovation to include multiple activities and types of innovation is said to offer more opportunities for innovation within the enterprise. One enterprise, ‘Sunrise Farm’, explained that they could now ‘give a name to it [innovation] and formulate a better understanding of what they are doing on a daily basis [with regard to the variety of innovations].’ The enterprise found value in understanding the various types of innovation which meant that they could make sense of the activities carried out in

the day-to-day activities as the processes of innovation. The responses have shown that invention as understood from the perspective of anything ‘new or improved’ in the enterprises’ activities allows for an understanding of innovation as more than invention. This ensures that enterprises are aware which of their activities are innovation activities. The definition has offered the room for people to position their innovations into the process or value chain. Enterprises appreciate the broad understanding of innovation and can better associate with the idea of innovation. Other comments made that fall into the same theme include ‘thought about the scope of innovation’, making reference to the fact that there is a broader ‘scope’ of innovation.

8.4 THEME 3: NETWORKS AND NEW CONNECTIONS ARE IMPORTANT

The third theme that is clear in the DRM district is the acknowledgement that networks of innovation are important and that if networks do not exist then they should be considered if the innovation process is going to continue. This theme consists of response that make references to: 1) the established network that may be accessible for innovators and will assist in the innovation process; 2) in order to achieve things (develop) enterprises should be willing to consider inputs from ‘the right’ people; and 3) channels should be in the networks to ensure more access to information. One example of such a response was by ‘Ben’s Glasswork’, who explained that ‘the interview provided us with some information on innovation and the usefulness of networks either formal or informal.’ The response shows that networks of innovation are not always clearly understood in the local context and that the networks may be valuable in the innovation process. If enterprises are not aware of the networks then getting assistance will be a problem. Enterprises are not adverse to the idea of using a network to achieve their innovations, with many explaining that cooperation would ensure greater development for the local enterprises, with a typical response such as ‘I learnt that cooperation with other organisations through a network facilitates and improves development processes in local areas.’ The need for a network is explained as a possible means for ensuring better innovation within the local areas. The enterprises explain that with the establishment or association with a network, the innovation process may be made easier. Many enterprises seem to be in agreement that networks which relay information, insight and resources would encourage greater innovation. These responses have shown that innovation networks are a possible space where innovation knowledge and processes can be improved.

8.5 TRAINING AND SKILLS DEVELOPMENT

Skills and training opportunities within the enterprises are considered necessary because of the local opinion that these are important in the innovation process. The skills that are important for innovation are defined as basic educational skills, technical or sector-specific skills and professional skills. Interviewees noted that the most needed skills, in relation to increasing and continuing

innovation activities, are basic skills. Enterprises usually explain that language, writing and communication skills are crucial to the innovation process. The basic skills are understood by respondents as the key indicator of whether or not the business has the capacity to innovate. Many enterprises expressed a desire to have their workforce trained in order to ensure greater innovation within the specific sectors. The enterprises describe that there are particular skills that are essential to the innovation process. These skills are not necessarily sector specific, although there are examples where skills training in specific sector-based activities are mentioned as crucial to the innovation process, such as a fairly comprehensive understanding of the core knowledge and practices of the sector. The majority of skills mentioned by the enterprises are related to interpersonal skills, some of which are basic skills such as reading, writing and communication as noted above.

An example of the sector specific skills required for innovation is that from ‘Diamonds of the North’, an enterprise in the mineral and mining sector. The enterprise adopted new machinery in 2011, this machinery included ‘tippers, caterpillars and more powerful loaders’. These machines are described as highly technical, requiring special skills to operate them. The enterprise explained that the adoption was only possible due to the ‘knowledge of the digging process and knowledge of diamond mining’. They also explain that skilled workers are vital in the implementation and adoption of the equipment. These sector specific skills are needed for the effective adoption of innovations as well as the continued application and maintenance of the innovations. Of the 49 employees in the enterprise, 24 were enrolled in skills development programmes. These skills development programmes, focusing on safety and assisting workers to get their driver’s licence, had a positive effect on the innovation activities of the enterprise and are explained as assisting in skills on ‘how to do the job [mining] successfully’. The key message in this example is that the adoption and diffusion activities require skills to ensure successful innovation. Without the skills required to use highly- technical equipment as well as prior experience in using similar machinery along with previous knowledge of diamond mining/digging, the adoption will fail and the diffusion will not be able to take place.

9. MACRO CONTEXT - BROADER INSTITUTIONAL AND REGULATORY ENVIRONMENT

This section provides a description of the institutional environment of the DRM district and considers the regulatory, external support and resource environment that is evident in the DRM district. An understanding of whether or not enterprises experience the legal, policy and standards regulatory environment as supportive of innovations in the internal organisational environment is also important when making sense of the internal organisational environment, and is also presented in this section. There is also a brief discussion on the role players within the innovation environment. The purpose of this section is to establish what resources are available, who supplies the resources,

who has access to the resources and what resources would encourage future innovation in the DRM district? The concluding remarks include possible areas of consideration that could ensure an increase in appropriate innovation within the district.

9.1 THE LOCAL AND NATIONAL LEVEL OF INSTITUTIONAL SUPPORT

The DRM district has innovation activities which primarily involve the adoption of products and processes. These adoptions entail both low as well as high technological innovations. As mentioned above the adoptions usually take place to ensure greater success within the enterprise. These innovations are usually adopted from a variety of enterprises situated at the local, national as well as international level. The innovations adopted are usually attributed to the external support and resource environment in the DRM district. The adoptions which are introduced are also subject to the regulatory environment of South Africa. The adoption process is inextricably linked to the external environment which provides resources and assistance to innovation adoptions in the DRM district. This section will begin with a description of the role players, support structure and resource provision involved in the adoption process within the district. The diffusion of innovations usually only occurs after the successful adoption of an innovation. Diffusion is usually influenced by both local and national role players. The adaptation of innovations will be discussed in relation to the local external environment. In essence, this section will provide a description of the institutional environment of the DRM district.

Established locally based organisations, such as the local municipality, and national research and support agencies, such as SEDA (Small Enterprise Development Agency) with a presence in the province are key role players in the macro-institutional environment. These organisations are said to offer much needed assistance to informal and formal enterprises in the DRM district. This assistance is not always directly linked to the process of innovation, but they do assist in ensuring the enterprises that receive assistance continue to have the opportunities to innovate in the future. This is achieved by offering platforms for interaction: employee training; provision of permits to operate according to sector standards; by ensuring that enterprises continue to look for new ventures (innovations within the sector); and the financial incentives which are a necessary but not exclusive driving force of innovation.

While local municipalities are listed as a part of the innovation network of some enterprises in the DRM district, there is also a large amount of criticism of the local municipalities and their inability to provide basic services such as water, electricity and sanitation, which are crucial for many innovation activities. The contribution of local municipalities is usually limited to their financial contributions to the operational activities of the enterprises that collaborate with the municipalities. One example of limited local municipal involvement in the innovation process is ‘Jet’s Training School’, mentioned above. The enterprise adopted a new 12 month internship programme and started offering ‘mobile

training’. The enterprise started providing courses in the various villages and towns rather than on their main premises. This cut out the cost of travel for the people enrolling in the courses. The enterprise is associated with various locally represented government departments such as the Department of Higher Education and the Department of Labour. The support provided was financial support in the form of accreditation and subsequent subsidies for learners, rather than skills development or assistance in identifying the needs of the community. Despite a lack of support (such as training for skills development and planning associated with the innovation implementation and adoption) in these areas, the municipality was mentioned as being important in getting the mobile training idea incorporated into existing structures in the district. One example is assisting in getting the mobile training started in the already established government environment.

An example of assistance provided, which is not directly related to innovation but offers opportunities for future innovation, is skills training. This may not be aimed at developing innovative thinking as such but rather aims to improve basic skills. Once the basic skills have been learnt, the enterprises and individuals are believed to be in a position to innovate in the future because they have an understanding of the basic skills required in their sector which can improve the ability to adopt new innovations.

Important to the local enterprise innovation activities are the collaborations between different private sector enterprises. One such example is ‘The Peanut 100 Machine’ mentioned above. There was collaboration between ‘AB Construction’ and ‘Peanut Farm’ to develop an innovation for the local peanut farming sector. This collaboration is viewed as essential in the macro-institutional support environment and is seen in a number of instances where enterprises come together to innovate successfully and appropriately, by sharing knowledge, skill sets and other resources. One of the reasons for this local collaboration is the awareness of and access to these enterprises in the district or in adjacent districts. Such awareness may not exist of enterprises further afield.

The diversity of enterprises that are innovating and can contribute to innovation is important in the DRM district. Innovations within the DRM district are not restricted to actors within a single sector, such as agriculture. There is some amount of inter-sector collaboration within the district and this can be seen in the case of the ‘The Peanut 100 Machine’ - the two sectors involved in the innovation are the agriculture sector and the engineering/manufacturing sector. If this collaboration did not take place the invention of ‘The Peanut 100 Machine’ would not have been possible. This demonstrates that innovations can result from inter-sector collaboration.

9.2 REGULATORY ENVIRONMENT

An understanding of whether or not enterprises experience the legal, policy and standards regulatory environment as supportive of innovations in the internal organisational environment is also

important when making sense of the internal organisational environment. The majority of enterprises express that they view the legal, policy and standards regulatory environment as supportive of innovations. With such satisfaction it almost seems as if no change is needed. However, while the respondents suggest that the legal, policy and standards regulatory is supportive, they qualify responses with comments such as ‘[we need] regulation of contracts and cooperation’ or ‘[there needs to be] consistent follow-ups on the progress that is done.’ The enterprises are satisfied with the legal, policy and standards regulatory environment of South Africa but express dissatisfaction with their implementation, application and enforcement. The problem seems to be not with the regulations, but with the implementation of the various regulations; which is a point that has to be borne in mind when researching innovations. There has to be an appropriate application of these legal, policy and regulatory standards in South Africa, including those that are concerned with innovation activities.

There is also a lack of awareness of broad innovation regulations in some instances, noted when enterprises were asked to define innovation. They are often unable to make reference to the legal, policy and standards regulatory environment. There has to be a focus on making enterprises aware of this support structure in South Africa; currently too many enterprises lack the knowledge of the policies and cannot benefit from the support that is available. Similarly, they are unaware of the limitations of what they can do and how they can adhere to standards or go about registering new innovations. When enterprises’ explain that the legal, policy and regulatory environment are not supportive; they indicate that ‘information sharing and coordination should, at least, be improved.’ The enterprises explain that if people are made aware of the support structures they will then be able to attempt to make use of the support. When enterprises express that there is a lack of support from the legal, policy and standards regulatory environment their responses are not associated with policy specifically dealing with innovation, but make reference to policy that is sector-specific, which is seen as negatively impacting innovation activities. For example, an enterprise in the agriculture sector called ‘ABC Potato Farmers’ indicated that agricultural sector labour laws are forcing them to innovate in a way that discourage them from supporting innovation that is more labour intensive and encourages greater employment of local workers.

9.3 REASONS WHY INNOVATIONS ARE NOT INTRODUCED

Some of the more common reasons why innovations are not introduced into the enterprises need to be discussed in some detail. First we give insight into the explanations provided by the enterprises as to why innovation may not always be possible or introduced. In the DRM district innovations are usually introduced; however, there are instances where introducing innovations encounter some challenges. This may have been an interruption in the IVC or rather an obstacle which needed to be overcome prior to the innovation being introduced. In some cases these innovations are successfully introduced into the enterprise while in other cases this process of innovation is slowed down, put on

hold or even prevented. The reasons provided span across the capabilities of the enterprises (socio- economic factors) and the enterprises’ relation to the supportive environment.

Enterprises are restricted to the innovations that can be effectively assimilated or adopted due to the level of capability within the enterprise. These missing capabilities are usually explained as ‘meeting standards of the head office’, ‘cash flow problems’ and as ‘too expensive to maintain’. These responses emphasise that innovation, to a certain extent, is not only attributed to the enterprise’s internal desire to innovate. The innovations may be dictated by external institutions such as government departments (local and national) and sector specific regulatory bodies which are actively involved in the enterprises’ activities (farmer’s associations, head offices of franchisers, or suppliers of innovation-specific resources) which influence when, why and how innovations may or may not be introduced. These external institutions directly impact on the internal capabilities, flexibility and resources available for the enterprise. While money is not the only factor innfluencing innovation, it may just offer insight into one of the possible difficulties in the innovation process. Some of the day- to-day obstacles include the cost of travelling within the district, transport of goods and services, the high cost of basic amenities (water, infrastructure and electricity) and developing staff capacity (basic training of employees). While innovation may not be directly related to all these factors, they do influence the final decision making process on whether or not to innovate.

One of the bigger stumbling blocks in the introduction of innovations is the lack of coherent support for innovation in the rural district by the various government representatives. The government is mentioned on several occasions when unpacking the reasons why innovations may be difficult to introduce. There is specific reference to the lack of coherent and easily accessible innovation policy and the government does not have sufficient mechanisms in place to ensure enterprises (both commercial as well as individual) have a platform to engage with their requirements for innovation. With comments ranging from ‘access to information by [the] municipality’ to ‘having financial support’ it is clear that there is a need for the government’s active involvement in the introduction of suitably desired innovations. Another difficulty experienced by enterprises with regards to the government is the highly bureaucratic funding process. The funding available usually only provides enough to start the enterprises and in many instances financial support does not continue to ensure that the enterprises grow. This may be more clearly understood as simply starting an innovation by funding limited funding and not seeing the idea through to fruition and even further dissemination. This approach is often ineffective when trying to get enterprises to innovate.

Table 9.1 below substantiates some of these points. One out of four enterprises reported to be familiar with South African STI Policy, where most of the respondents (48%) are from the public sector. Although the majority of the enterprises (58%) reported to be aware of the state support for innovation, only one out of four enterprises actually applied for this support. By unpacking even further, it becomes evident that out of 74% of public enterprises, who are aware of the state

support, only 16% applied for the support. Similarly, out of 46% of private enterprises who are aware of government support, only 9% applied. In contrast, out of 65% of NPOs, 56% applied for government support. Table 9.1: Share (%) of enterprises familiar with STI state policies by enterprise type, (N=122) Public Private Non-profit Valid Innovation support Enterprises Enterprises Organisations observations n = 31 n = 57 n = 34 Aware of SA STI policies

Yes 37 48 26 21 No 85 52 74 79 Aware of state support for innovation

Yes 71 74 46 65 No 51 26 54 35 Applied for state support for innovation

Yes 29 16 9 56 No 93 84 91 44 Note: Valid Observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

These results highlight the importance for the government to educate enterprises on South African STI policies as well as on when and how to apply for government support and engage in innovation activity.

Table 9.2 below presents crucial information about enterprises’ participation in innovation systems and networks. More than 85% of the enterprises are part of an innovation system, whereby all NPOs of the sample are part of the innovation system followed by public enterprises (97%) and private enterprises (70%). Another interesting finding is most of them engage in formal innovation systems, whereby NPOs lead with 92% of the enterprises, followed by public enterprises (87%) and lastly private enterprises (53%). Additionally, between 35% (public and private sector) and 59% (NPO sector) of enterprises reported to be part of systems that are locally based. However, the remainder reported to be part of a system that is not locally based - and here the public sector takes the lead. Lastly, less than 5% of the enterprises could report whether the innovation system they are part of is part of the NSI; this may be related to the question from Table 9.1 where there is little awareness of STI policies - and thus there may be little awareness of NSI generally.

Table 9.2: Share (%) of enterprises participating in innovation networks and system by enterprise type, (N= 122) Public Private Non-profit Valid Innovation system Enterprises Enterprises Organisations observations n = 31 n = 57 n = 34 Part of innovation system

Yes 104 97 70 100 No 18 3 30 0 Type of innovation system

Formal 88 87 53 92 Informal 19 13 21 9 System mainly locally based

Yes 51 35 35 59 No 55 61 39 41 Innovation system part of NSI

Yes 6 6 7 0 No 3 3 4 0 Note: Valid Observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

Enterprises have also expressed dissatisfaction with the financial framework within the district; explaining that financial incentives are not provided for innovation or hard work, and that the funding and regulations should be supportive of enterprises that are proactive and show creative and innovative drive.

The second most influential institutional group includes sector specific regulatory bodies which are actively involved in the enterprises’ activities (farmer’s associations, head offices of franchises, or suppliers of innovation-specific resources). In some instances an obstacle to innovation in the DRM district are manner in which these regulatory bodies interact with enterprises in the district. On the other hand, enterprises are restricted by the legal, policy and standards regulatory environment in South Africa. Respondents explain that the policies are not implemented correctly and are usually not considerate of the situation in the local setting. They explain that in some instances innovation was a laborious task which took months for approval before any form of action was taken. One such example is of ‘Consideration Farm’ established in 1990. This enterprise adopted a new process of breeding ‘drought resistant’ cattle. The process adopted is known as In Vitro Fertilisation (IVF). This is a process by which an egg is fertilised by sperm outside the body. This process allowed the breeder to match the genetics needed to create a cattle breed which may be more resistant to drought in the district. This process was started in 2011 and required the importation of semen from Australia. This is one of the few farms, in South Africa, that is equipped for the procedure of collecting the embryos and then carrying out the IVF in a fully equipped laboratory which is situated on the farm premises. The enterprise explained that the prevailing policies do not allow for faster introduction of the

innovation, which meant that their innovation process was delayed as a result of the regulatory environment, including importation and quarantine regulations.

10. CONCLUSION AND LESSONS

This report provides preliminary findings on using the Rural Innovation Assessment Toolbox to map innovation activities among a purpose-built sample of 122 enterprises in Dr. Ruth Mompati District Municipality. To contextualise the findings and motivate some local development possibilities that investment in innovation might be able to increase, this report started with a brief overview of pertinent demographic and socio-economic information of Dr. Ruth Mompati District. About 13% of the provincial population lives in Dr. Ruth Mompati District, with more than 65% of these residents located in rural areas cross this district. Human wellbeing indicators (poverty rates, inequality measures and the Human Development Index) of the district generally fall below the provincial averages for the same indicators, suggesting relatively lower quality of life and living standards than the average person living in North West Province. The district is largely a cattle producing district in the country, known by many as ‘the Taxas of South Africa’. Looking at the sectoral composition of the district’s economy, it is worth noting that tertiary services (73%), followed by primary activities (particularly agriculture), dominate gross value added and economic growth. It is against this backdrop that this report has begun to explore the potential of innovation activities as a catalyst for human wellbeing enhancing local development.

Several high-level insights flow from the assembled evidence and deserve to be underscored as a helpful step towards thinking about appropriate policy recommendations. Based on technical criteria about registering with an enterprise authority and for income tax purposes with SARS, approximately 75% of all sampled enterprises could be classified as so-called formal sector enterprises. This does not mean that the kinds of economic transactions these enterprises undertake are always strictly formal contractual arrangements; for it is well-known that officially and outwardly formal organisations are active in multiple informal economic relationships and vice versa. Another striking feature of these enterprises is that they are predominantly involved in tertiary services, with the largest share of enterprises found in community and social services, and trade and finance.

Little is known about innovation in Dr. Ruth Mompati District, as an exhaustive and coherent picture of localised innovation actors and activities in this rural district does not exist. This study is an initial attempt at filling this knowledge gap and the authors are mindful of the fact that the documented evidence of innovation in this report makes up a tiny fraction of what might be occurring in reality. Nevertheless, it is a repository of policy-relevant information which did not exist prior to this study and can serve as a useful guide to policy interventions aimed at boosting local innovative performance, which ought to begin with knowledge capabilities and what enterprises within the district actually know (or do not know) about innovation.

In the sampled enterprises, almost all respondents equated innovation with hard technologies, creativity, and bringing something new into the enterprise. The conventional idea of ‘innovation’ was fairly well known among participating enterprises. Almost 90% of private organisations engage in innovation activities for direct economic benefit. Not surprisingly, 75% self-report no awareness of the restricted meaning of social innovation. On the other hand, a substantial share of sampled public and non-profit enterprises pursue innovation activities with the explicit or implicit goal to improve human and social wellbeing, yet no more than one out of four of these organisations reported an awareness of the restricted definition of the concept ‘social innovation’. This fact, if coupled with increased government support to ‘social innovation’ may well increase the prospects for new ideas and practices to directly uplift the living standards of large numbers of people.

Alongside what enterprise representatives knew about innovation, a more pressing concern has to do with poor localised awareness of national innovation policies and government assistance to promote innovation at grassroots level. Approximately 30% of enterprises self-reported an awareness of national Science, Technology and Innovation (STI) policies - heavily skewed in favour of public enterprises. A significant share of the enterprises considered institutional support (policies, laws and agencies regulating and supporting innovations) an important contributor to innovation activities. However, what reduces an appreciation of the need for institutional support is the disproportionately negative perception of institutional support prevalent among private enterprises in our sample. Why private enterprises would be averse to institutional support for innovation is difficult to answer and would probably begin with an in-depth case by case investigation of their opinions.

A novel framework to comprehensively document the nature and extent of innovation activities (invention, adoption, adaption and diffusion) in Dr. Ruth Segomotsi Mompati underpins this report. With the aid of this approach and its related methodology, the study was able to uncover patterns of rural innovation that can potentially overcome rural underdevelopment and raise the living standards of rural communities. Very few enterprises in this district are pioneering creators of new products, processes, organisational or marketing arrangements coupled with intensive research and development for new knowledge production. This traditional notion of innovation, or simply invention, did not exceed 2% for the years 2011 and 2012. The virtual absence of invention is not surprising because the critical drivers of original knowledge and artefact creation are generally missing - as shown by the low-levels of self-reported access to scientific labs and libraries for innovative activities. Sampled enterprises rarely had or used a specialist R&D division, self- experimentation or tapping into discoveries of tertiary and scientific agencies as platforms for invention. Adoption activity was far more prevalent among enterprises and this stands in sharp contrast to invention. Over 85% of enterprises adopted innovation in 2011 and/or 2012.

Although the lack of appropriate infrastructure as well as other explicit and transaction costs might be typical barriers to adoption, the findings show that knowledge sharing and networking facilitate the adoption and use of innovations. In fact, more than 85% of sampled enterprises are actively involved in knowledge sharing networks which adopters are most likely to benefit from. Among the enterprises participating in self-reported networking for innovation, interactions with partners are predominantly formal rather than informal. Moreover, although most examples have suggested how technological activity has been fundamental to the success of the enterprise, some case studies illustrate the adoption of highly technical innovation which required great skills level.

With regards to skills and training development, it was argued that basic education skills such as language, writing, interpersonal and communication skills are most important for innovation activity to take place. Government could provide necessary infrastructure and support to stimulate the development of these skills.

The Dr. Ruth District Municipality sample results expressed a new aspect of the innovation value chain that has previously been unacknowledged in the earlier pilot phase, and that is ‘innovation trail’. Innovation trail or the referral method is the tracking of innovation activities which cut across sectors as well as enterprises. An example of such innovation was illustrated through a case study of ‘The Peanut 100 Machine’.

The last two sections of the report looked at the internal and external environments which also influence innovation activity in the district. Although the socio-economic data suggests poor access to resources such as basic services, the respondents of the selected sample indicated having access to basic resources such as running water, electricity, toilets, libraries, etc.

The majority of enterprises express that they view legal, policy and regulatory framework as supportive of innovation; however, many are dissatisfied with their implementation, application and enforcement. In addition, many lack knowledge of the policies and thus cannot benefit from the support simply because of a lack of awareness.

While there is some evidence of innovation activity in the district, improved government support could largely improve the environment for innovation. One of the reasons identified by the sampled enterprises is the lack of coherent support for innovation in the rural district by the government. Also, the highly bureaucratic funding process is discouraging for most enterprises. At the enterprise level, lack of capacity is another reason for the low level of innovation. This factor could also be improved through government support.

To sum up, findings of this pilot study in Dr. Ruth Mompati District support a basic proposition: In order for innovation to be a catalyst for rural development, with an emphasis on enhancing human

wellbeing, then the costs hindering innovative performance must be cut. In practice this means enabling the ability of enterprises based in Dr. Ruth Mompati District to adopt and adapt innovative products, processes, organisational and marketing arrangements. Even though the cost of scaling up innovative activity is a major concern, the non-profit and private commercial enterprises that actively adopt and adapt rarely applied for government support for the dominant innovation activities. Reasons for this ought to be further investigated and must begin with aggregating the total value of government investment in innovation activities across this district. Strengthening learning capabilities of actors in the local innovation space, especially knowledge of STI policies and the National System of Innovation, combined with effective institutional coordination, are urgent interventions needed to successfully harness innovation for broad-based quality of life enhancement in rural Dr. Ruth Mompati District.

11. REFERENCES

Global Insight (IHS Global Insight Regional eXplorer Data). 2013. South Africa. Accessed: 10 May 2013. http://www.ihsglobalinsight.co.za Gault, F. 2010. Innovation strategies for a global economy: Development, implementation, measurement and management. Ottawa, Canada: International Development Research Centre (IDRC). Hart, T., Jacobs, P.T. and Mangqalaza, H. 2012. Key concepts in innovation studies – Towards working definitions. RIAT Concept Paper Series – Concept Paper 2. Pretoria: Human Sciences Research Council. Mhula, A., Jacobs, P.T. and Hart, T. 2013. Innovation methods– Indicator development. RIAT Concept Paper Series – Concept Paper 6. Pretoria: Human Sciences Research Council. DRM (Dr Ruth Segomotsi Mompati District Municipality Integrated Development Plan Third Generation 2012-2017) 2012. Accessed 20 May 2013. http://mfma.treasury.gov.za/Documents/01. Integrated Development Plans/2012-13/03. District municipalities/DC39 Dr Ruth Segomotsi Mompati/DC39 Dr Ruth Segomotsi Mompai - IDP - 2012- 13.pdf YF/SIX (Young Foundation / Social Innovation eXchange). 2010. Study on social innovation. A paper prepared by the Social Innovation eXchange (SIX) and the Young Foundation for the Bureau of European Policy Advisors. Obtained from the South African National Council for Innovation (NACI), August 2012.

APPENDIX ONE: RURAL INNOVATION ASSESSMENT TOOLBOX (RIAT) FEEDBACK SESSION TO DR. RUTH MOMPATI DISTRICT

DR. RUTH MOMPATI DISTRICT MUNICIPALITY, VRYBURG, NORTH WEST

5 September 2013 9:30AM – 14:30PM

Proposed Workshop Agenda 8:00 – 9.00 Registration and tea 9.00 Opening and introductions 9:30 Rural Innovation Assessment Toolbox [RIAT]- Overview of RIAT, Concepts & Methods • Discussion 10.15 Engaging with RIAT Evidence - Presentation & Open Discussion 11:00-12:30 Self-reflection & Horizon Exploration • How to harness Innovation for development in Dr. Ruth Mompati? • Out-of-box thinking about localized innovation activities 12:30-13:15 Enhancing Rural Innovation Networks/Systems • Learning from the evidence to fine-tune our ‘rural innovation’ vision • Where do we go from this point forward? • Evaluation 13:15-14:00 Lunch

OVERVIEW

This was the last session of the process of reporting back on the pilot studies undertaken as part of the RIAT project in four rural district municipalities. The aim was three-fold: • Inform participants about the usefulness of RIAT and give participants feedback about the findings. • Encourage participants to reflect on the findings. • Based on the pilot findings, facilitate an exploration of how to harness innovation for development (beginning with the identification of catalytic socio-economic activities).

The workshop was attended by various groups of people from the local municipalities, district municipality, NGOs, cooperatives and CBOs. Mr Thabo Radebe represented the Department of Science and Technology.

1. Welcome and introduction

Introduction and welcome was conducted by Mr Hercules Ndlovu of the Local Economic Development Department of the Dr. Ruth Segomotse Mompati District Municipality. Mr Ndlovu welcomed everyone and said that as part of their mandate as the LED department, whenever there were stakeholders that came to the district to share information, they organised the local key stakeholders within the district to share their information and experience. Mr Ndlovu handed over to Dr. Peter Jacobs.

Dr. Jacobs explained that RIAT is a project that the Department of Science and Technology (DST) commissioned in 2012 and further details will be provided in his overview presentation. After going over the workshop agenda and a round of introductions, Dr. Jacobs emphasised that unlike ordinary workshops this self-reflection and horizon exploration session requires full participation and inputs from the participants. Mr Tim Hart reminded those present to fill out the two attendance lists. Participants were encouraged to read the HSRC Briefing Note and Policy Brief as they discuss pertinent rural innovation issues. Following an explanation of the workshop evaluation form, participants were allowed five minutes to complete the first section of the feedback form.

2. Ice breaker

Dr. Jacobs introduced the adjusted programme for the day, as the programme was running behind – he introduced the presentation and explained how the time will be utilised.

In order to learn about the local innovation activities Dr. Jacobs asked the audience two questions about innovation in the district: 1. Where do you think innovation fits into the IDPs? 2. Is innovation mentioned in the IDPs and what role is innovation given? 3. Do you think there is a connection between innovation and local development?

In response to these questions, one participant expressed the view that innovation fits into the IDP. However, according to this participant, public libraries have limited Internet or limited computers at schools. Representing an organisation of artists, they bring artists together and share information about how to promote their music, so that their music can be advertised and promoted. But there is also the need for skills transfers to students that can aid their search for information about careers, job prospects and so forth.

Another participant said that IDP, by its nature, should be people driven - but the reality is that innovation that has been initiated by what academics or experts think should be done in those communities which might not match the needs of the communities. For example, we have indigenous knowledge that is not considered in the IDPs. So, in principle, innovation must be included in IDP but in practice it is not. What comes from studies and academic research overshadows what communities need on the ground.

In response to this input, another participant suggested that different interest groups (for example youth, business people and farmers) must be consulted based on their areas of operation. Ask people what do they think will assist them? Ask people what can be done for them. Placing everybody under one roof is problematic because some people might be more vocal than others, and therefore tend to dominate.

Another participant argued that even though the IDP is a municipal driven programme, it must be grounded in a holistic fashion. There are deliverables that the municipality should deliver. In the case involving musicians and music, we should ask if it is a core function of the municipality. The IDP is based on needs shared by the community, their concerns and priorities. Technocrats need to make sure those needs are achievable and factor in issues of funding. How innovative are we in IDP forums or interactions?

A participant raised the energy concerns in Dr. RSM DM and the need to build a geo-thermal plant instead of building an ESKOM plant. It was argued that the proposed plan will offer free energy for years to come because it is will be energy from nature. This area is dominated by rural areas with a lot of youths, the government could get students with different skills for instance IT, and agricultural students, they should get these students and develop them and incorporate their knowledge to make this a profitable municipality.

3. Presentation by Dr. Peter Jacobs: Rural Innovation Assessment Toolbox [RIAT] - Overview of Concepts & Methods

To give a background Dr. Jacobs explained what the RIAT project set out to do. This was a strategic priority of the government and according to Strategic Priority Number 3, which places emphasis on

rural development because of the specific problems in rural areas, such as infrastructure and service backlogs, high levels of poverty and low human development indices. These challenges are currently spread over 24 district municipalities. To get a better understanding of innovation and to kick start development, the government thought of various activities, programmes and interventions. Can there be innovative partnership development and institutional linkages?

Dr. Jacobs highlighted the origin and purpose of the RIAT pilot study in the four districts and reviewed some of the key concepts, the developed methodology and sampling frame used with regard to administering the mapping instrument in Dr. Ruth Segomotsi Mompati District and the other three districts. He emphasised that the mapping instrument (survey) was only one of the tools and that two other tools were being developed as part of the RIAT collection. This self-reflection participatory interaction and horizon exploration workshop is part of the action component of the toolbox. He drew their to attention to the fact that they were participating in the use of this tool and that some of the activities taking place during this interactive session would assist the research team in developing the various tools. Subsequently, participant interaction during the programme is considered vital and is encouraged. The tools are to be further explored and developed in the next phase of RIAT.

Queation and Answer session for clarity purposes

Question: According to your previous slide – which says grounded in the cabinets approach for scaling up rural development - Are there other programmes besides the one we are currently engaged in that we should look at in so far as the cabinet’s pronouncement on rural development?

Cabinet’s Action Plan is called Action Plan 6 and one focal area is scaling up rural development programmes. It’s a packaged programme with multiple tentacles and multiple interventions. The district municipalities, for example, can tap into resources via COGTA’s support programmes.

Question: Names and concepts that have their origins in African languages have been used especially in cities, without taking into consideration the origins or even compensation for the people who came up with those concepts or names – is there an opportunity that this project will assist with patents and intellectual property in terms of protecting those who came up with those concepts and names?

While this question obviously goes beyond RIAT, it points to two or three areas of possible interaction. The first level of interaction is the national level with the DST heritage and cultural affairs - through their indigenous knowledge directorate with lots of information and experience. Secondly, the Department of Arts Culture has a programme for protecting heritage sites/rights. Thirdly, when it comes to the commercialisation aspect, the Department of Economic Development oversees the

competition commission that controls rights and intellectual property and the DTI enforces intellectual property.

Another element of this question touches on the link between innovation and commercialisation. Commercialisation is just one step of this process. The key part is innovation and human wellbeing improvement – that is the critical element. Whether on needs commercialisation is neither here nor there; innovation can happen without commercialisation. The simplest example is that of fire by friction – which was never commercialised until recently. So this part of the question turns on the benefits that should accrue to South Africans who have been innovating for a long time and even centuries.

Another way to look at this is that innovation must add value, whether it’s commercial or not – if it does not then who wants it? It has to add value to those who use it.

Sometimes the way things are done in government tends to supress innovation activity and thinking. The Devils Claw Project is a case in point, as the head of the LED explained. Whilst this product has huge export potential, this is not exploited due to conflicts between the traditional authority and community about the sharing of benefits related to harvesting and exporting this natural resource. As the government partner, the DM is uncertain as to which actor to support and consequently the socio-economic benefits of this project are not realised. Poor institutional support and coordination must be addressed. People are very innovative but their ideas are sometimes not accommodated by the powers that be. How can we make sure that all stakeholders work together? How does RIAT assist on the ground, and confront those issues?

The last session of our day will try to get us to think actively about real situations and projects. The Devils Claw Project is less about technical innovation and more about institutional arrangements. We will try to think innovatively about those arrangements and the role people need to play in developing innovations that address those conflicts between local and traditional authorities. How, practically, can we use innovation to address these issues?

4. Presentation by Mr Kgabo Ramoroka

Mr Ramoroka noted that the results of the mapping survey were drawn from a purposive sample of 122 innovating enterprises from the Dr. RSM district. He explained how the enterprises were categorised into public, private and NPOs. A high number were registered with the statutory bodies and for tax. Three out of four were registered for tax. From the sample most enterprises were from the tertiary sector. One out of four enterprises was engaged in trade. NPOs dominated in the community services and more than half of them were serving the local market (the district).

Innovation and Social innovation Mr Ramoroka explained that the purpose of this section was to establish awareness about the concepts of innovation and social innovation. The key findings were that a relatively high number of the sample indicated a certain level of awareness. He gave an example of one of the case studies - the peanut blower and the various innovation activities involved. Some enterprises were innovating for economic objectives, some were also innovating for social benefit.

Innovation Value Chain The key findings: less than 10% of enterprises are engaged in invention. Adoption was the most common form of innovation activity – this was most common among non-profit organisations. Adaption was the second most frequently reported innovation.

Resources Factors that affect innovation in enterprises – the key findings, a low share of enterprises did not have direct access to facilities such as libraries, private laboratories and telephones. The usage of ICT within the sample indicated that the most utilised form of ICT were cell phones, computers and tablets.

Macro context broader institutional and regulatory environment: few enterprises were aware of STI policies and regulatory frameworks related to innovation.

Question and Answer session for clarity purposes

A question was raised about how dispersed the enterprises were across the district and whether private enterprises were restricted to urban areas. Mr Ramoroka responded that they also visited a number of villages outside of the main centres when conducting the study. Dr. Jacobs also highlighted that there has been interest about innovation activities at local municipality level and not just at district level. He also highlighted that with many enterprises there is very localised distribution of goods and services that often does not cross municipal boundaries.

Another participant asked for confirmation that the study had profiled all race groups and this was confirmed by Mr Ramoroka.

The extent to which the amount of innovation activity in Dr. Ruth Mompati District was comparable with the rest of South Africa was queried. There was concern that government has not created sufficient awareness about innovation and support thereof. Another point was made that even when people are aware of funding opportunities many do not have the capability to prepare the necessary submissions. It was suggested that one needs to properly diagnose the problem in order to identify a solution. It was highlighted that the lack of innovation activity could be linked to the fact that the

population is declining as people are moving to areas where development is taking place – this was discovered in the recent review of the LED strategy.

Another challenge raised was that big, well-resourced companies take ideas from SMMEs that do not have the necessary capacity and then run with these ideas, making them their own.

Some additional points were raised after Mr Ramoroka’s presentation:

• In the study it was found that enterprises are clearly not aware of policies. What is being done to make them aware of the STI policies? • The government is encouraging people to start cooperatives – but no skills and information is transferred to the people and therefore these enterprises cannot grow. • What is the NSI – and what is an enterprise that forms part of the NSI? The response from Dr. Jacobs was that an innovation system is typically seen as: (1) a private sector enterprise with a need / idea engaging with (2) a state enterprise (national level) and (3) a university/research centre. But has now importantly started to include civil society, including individuals as important actors. • The presentation said that 80% of respondents had access to cell phones/Internet. Does this presuppose that people thus have access to information and that government does not have to take responsibility for raising awareness about issues such as supportive policies? Dr. Jacobs responded that while many people have cell phones, it is also not clear whether they were actually making use of them for their innovation activities. • The issue of protecting IP and registering patents was raised and the RIAT team was asked whether they had encountered any cases where patents had been applied to any innovation activities. Mr Ramoroka responded that the enterprise that developed the peanut blower had applied for a patent. Mr Hart added that an enterprise can only apply for a patent that it has actually created (or a new process that it has developed such as the technique for converting devils claw into a product), and that an enterprise would only do so if they thought it could make money for them and secure their rights. Ms Mangqalaza also highlighted that in her experience, enterprises have not applied for patents because they were not aware of where to go – and sometimes were not even aware that they had actually invented something.

5. Interactive session by Ms Brigid Letty

Self-Reflection and Horizon Exploration: How can innovation contribute to development in DRDM? Ms Letty emphasised the innovation value chain graphically by displaying on flipchart paper the different innovation activities (invention, adoption, adaption and diffusion) as well as the range of innovation types that can be found (products, processes, marketing arrangements and organisational arrangements). The audience was encouraged to think about activities, programmes or projects within the community that could use the innovation value chain. What are some of the problems and

what solutions could be applied? The attendance was extremely good with 19 local participants, so Ms Letty asked them to select the themes they wanted to discuss and then to form groups based on their interest in the different themes. The participants divided themselves into four breakaway groups. The groups were then asked to work through the following set of questions as a guide to their discussions.

Self-reflection and horizon exploration session • Considering the case study shared during the presentation…. Which aspects would you consider to be innovations? What types of innovations and what sort of innovation activities? • Can you give examples of projects / interventions that the DM is currently supporting / investing in or which are in the pipeline (on the horizon)? • Are there any aspects of these projects that you would consider to be examples of innovation? • Are there any aspects of the project that could be improved by innovative thinking? • What stakeholders are involved with the project – do any additional stakeholders need to be brought in to participate in the discussions about strengthening the innovation? a. Municipality group: Beef beneficiation initiative

The representative from the DM highlighted that their group had dealt with a project that has been on the go a long time – the Western Frontier Beef Beneficiation Project. He highlighted that this is a key project because agriculture is a mainstay in the province. The programme has failed to take off on a number of occasions – and yet it is important for it to do so for the benefit of the district.

The programme is mainly about livestock improvement and agro-processing including tanneries and abattoirs (i.e. it encompasses agricultural value chain linkages). Livestock is currently leaving the district to be processed elsewhere, so this programme should create job opportunities locally by carrying out some of the value chain activities locally.

Some challenges were raised, for example that they previously had commitment from the Vryburg Agricultural Society (representing commercial farmers) to support the project. They are still waiting because there has been no response from government (Municipality and the Department of Agriculture) about how they can involve them in the project. They also had commitment from emerging black farmers – but they were never effectively brought on board, beyond being provided with training.

The group discussion looked at possible solutions, one of which was the issue of coordination of different stakeholders (DM, LMs, DOA, DEDT, DLA), and how they must come together to thrash out responsibilities and commitments. It was also highlighted that there is a need for a project champion,

who will be the driver and take responsibility to make sure that all stakeholders are involved. A stakeholder management plan is needed.

In terms of technical challenges, a lack of bulk water supply was identified as a problem in a previous meeting about the beef programme because water supply is running short in the district. Now the group discussed that if the project could be piloted at a specific locality rather than trying to implement it acorss the district, it might be able to work. It was also noted that the commercial farmers that have cattle are finding their own solutions to the water-related challenges and thus the DM could work with them. It would then be possible to expand to other LMs, to become a district- wide initiative. As solutions for the water constraints are identified and implemented, the project can be rolled out to those municipalities that have the most severe water constraints – solutions and the project can be rolled out together.

A question was raised to the DM about whether the project was functional yet in any parts of the district or if action had not gone beyond initial training. The response was that the project has been on the cards for 20 years but it has never actually been implemented, though it is still annually included in the State of the Province address. It was highlighted that the programme is difficult to actually implement but could actually revive the economy of the district. One of the participants added that people just attended training and it never went further. The need to involve the youth in the cattle programme was also raised by a number of participants. Furthermore, it was suggested that the DM should be champion and convenor of different stakeholders along the value chain so as to initiate pilot activities. For example, the DM has already engaged various stakeholders such as BMW, who might provide markets for leather. b. Community support group

The second group that provided feedback highlighted that they were presenting on social aspects, from the side of non-profit organisations. Their enterprise addresses the challenges of people living with HIV/AIDS and Tuberculosis. Some of the challenges that their enterprise faces include lack of transport (which results in delays), lack of communication facilities and a need for training, since government is no longer providing training workshops to disseminate knowledge. Some of the innovative solutions that they proposed were ‘walky-talkies’ for cheap and effective communication, linkages with experts such as doctors would provide access to information and knowledge; while the issue of transport could be addressed by using a bus that runs on used fish cooking oil.

In terms of their innovative achievements to date, they said that they had come up with the idea of a laundry – as they are able to assist people who cannot do washing for themselves and it’s a means to generate an income. The group has also started a vegetable garden, which is a solution to nutritional challenges that people face and the lack of money to buy fresh produce. It was added that the group

has helped many people that had never previously received support and whose health has now improved as a result of their interventions.

A question was raised of where they see themselves in 20 years’ time. The response was that since they have already initiated a laundry and a garden, they will now aim to have their own transport in place. It was also suggested that there has been innovation by Department of Health (treatment has been simplified from 3 tablets to 1 tablet), so there could be even bigger breakthroughs in 20 years’ time. c. Agricultural cooperatives

The next group explored the role of innovation in supporting activities of agricultural cooperatives. The group also focused on strengthening cattle production – initially they considered breeding new types of cattle, but now they want to open a new abattoir in the district as the previous ones are no longer working. They also discussed the possibility of expanding from beef to other meat such as pork. This initiative will require that the transport problem be addressed in order to get livestock to the abattoir. Vryburg is seen as an accessible, central point for these activities.

Some other ideas that emerged were to attract funding and investment, get skills and training from other workshops that are conducted, market the abattoir from the new radio station, etc. Some of the stakeholders that they would have to engage with include the Department of Health (to check the abattoir facilities), the ARC, and North West Provincial Department of Agriculture (DoA and LR). A suggestion was made by one of the participants that if they want to be able to supply Halaal meat, they must not to mix pork and beef in the abattoir. Another participant asked that the group also consider the lack of skills amongst the youth, as well as land-related challenges. The representative of the cooperative said that the issue of land was outside of the scope of the cooperative to address.

The representative of the LM then responded to the issue of skills needs amongst the youth. He said that in recognition of the rural nature of the district, the Department of Education (DoE) is piloting a project to provide an agricultural school in Stella in the 2014/15 or 2015/16 financial year. He added that since over 60% of economic activities in the district involve farming, it is a gap that <5% of students have knowledge of agricultural sciences, thus DoE in partnership with DoA is piloting such an institution.

Another participant raised a concern that there is already such a school in the Greater Taung local municipality that specialised in agriculture and has the necessary facilities. The suggestion was that rather than waiting for the new school at Stella, the existing school should be used in the meantime. The LM representative responded that the project is still in early stages and thorough consultation will take place.

d. Music and community radio

The final group that gave feedback represented the entertainment and community radio sector. The focus of the discussion was on the community radio initiative. They were seeking opportunities for innovation to address some of the challenges that they face. The social benefits of community radio in terms of information dissemination were highlighted. Emphasis is placed on local content, diverging from the big radio stations that concentrate on provincial matters. This one will be a district radio station covering the five local municipalities. It will primarily cover local content focusing on district news and events. The station will source local talent in order to develop the local community. There will also be community response programmes where communities can participate by using those programmes. In terms of technical matters, they will have to identify transmitters to ensure enough coverage. The district municipality will take on the role of facilitator. One of the future plans is to strike a balance between radio and television, many people are opting for television and it does not cover local content at all, but rather focuses on national and international topics, events and news.

Some technical issues are problematic. For example, they must identify whether there is infrastructure for anticipated coverage (i.e. are transmitters available). Considering different stakeholders, it was suggested that it would be up to SENTEC (one of the stakeholders) to identify transmitters that can be used to provide sufficient coverage. Another innovation proposed was to encourage NGOs to be part of the team as they have programmes that deal with community development. DM was also identified as a stakeholder to assist and facilitate with programmes that can achieve LED. In terms of compliance issues, another stakeholder was identified because the station must comply with licensing procedures, etc. Similarly, the Department of Public Communications will be a stakeholder as they deal with regulations and policies and must make sure that the station’s operations are not in conflict with policies.

In terms of the future and how they see themselves, they said that they want to see the station as a tool for information transfer in terms of local content. They want everybody, communities in particular, to use the radio as a tool for raising issues or awareness of events. They want to develop the community in terms of media transformation (i.e. less television, more radio because television does not generally provide local coverage of issues affecting communities). They want to build the station as a brand for the local community in terms of news, print and broadcast in general.

General concluding remarks by Dr. Jacobs

When asked how the participants saw RIAT being involved in future, one of the participants highlighted that the RIAT team should have been introducing this concept of self-help long ago, rather than having enterprises relying on others to come with funding and solutions. He saw innovation as being about long-term visions. The DM representative said that he found the session

very educative, but what he found lacking was the need for deeper understanding (although he acknowledged that this might have been outside of the HSRC’s brief) of why enterprises behave in the ways demonstrated through the survey – for example that most supply of goods and services takes place locally. He suggested that this additional information could help the municipalities further. He thanked the RIAT team for the presentations and acknowledged the structure of the workshop and the effective flow between the different sessions.

Evaluation by participants

Background and pre-workshop ideas on innovation Type of enterprise you represent Of the 19 participants that completed the evaluation forms, three were from the private sector, six from NGOs, seven from the public sector and only one did not enter a response.

On average, how many hours per week do you use the Internet for the following purposes (personal communication, private personal research and deliberate research for work) Of the 19 participants, three participants indicated that they used zero hours per week for person-to- person communication. Five participants indicated they used the Internet for about 1-5 hours per week for private personal research. Five people used the Internet for 6-20 hours per week for person-to-person communication. Eight people indicated that they used about 1-5 hours per week for private personal research. Four people said that they did not use the Internet for deliberate research for work, followed by four people who indicated they used about 1-5 hours per week for work-related research and seven people who said they used 6-20 hours for the same purpose.

What was your understanding of ‘innovation’ before attending this workshop? Nine out of the nineteen participants associated innovation with the creation of new things, ideas and products or services. Two associated innovation with the creation of new technology. Only one respondent said that they did not know what innovation is. Generally people recognised that innovation is about the creation or improvement of new products and services.

RIAT concepts and information collection methods Was the presentation on the purpose of RIAT and the conceptual definitions useful to you? All participants indicated that they found the presentation useful; many said that it brought RIAT to their attention and this gave them an opportunity to further learn and understand what innovation was about. Many also indicated that after the workshop they recognised how innovation was important for the sustainability of their livelihoods.

Are you aware of any examples of social innovation that has taken place in the district? Five of the participants said that they were not aware of any examples of social innovation. Fourteen of the participants gave examples of projects and programmes that they thought represented social innovation in their community. The main examples listed were related to agriculture, broadcasting and community social support programmes.

How can the idea of innovation make a valuable contribution to socio-economic development in the district? Most of the respondents thought that innovation can contribute to the local economy and assist them to improve their livelihoods. They linked innovation to local development, and as a benefit to the local community. Unfortunately few details about specific projects and linkages were provided.

Evidence of ‘innovation’ in the district municipality Was the presentation on the RIAT pilot findings about innovation activities in the district useful to you? Two people did not respond while the remaining seventeen said that they found the presentation useful. The majority said that the presentation broadened their understanding of innovation as a developmental tool. The respondents found the presentation educational with respect to concepts of the innovation value chain.

What were the key lessons about innovation activities that you consider most important from this presentation? Three people did not respond to the question. The majority thought that this presentation helped them to understand issues of economic and community development and how they could improve their lives; in general awareness of the benefits of innovation and the broader understanding of specific concepts such as invent, adopt, adapt and diffuse.

Can you identify any specific areas where you think innovation could play a role in your future operational activities in this district and how could you enhance innovation activity? Four people did not respond, while the remainder thought that innovation could play a role in the district through skills development and public investment. They thought that it could help with the IDP review processes. They also thought it could play a role in agriculture and other sectors generally.

Interactive self-reflection and horizontal exploration Specifically, what do you consider to have been the most important information coming out of this workshop? In other words what is the key take home message that you will share with your colleagues in the next day or two?

Five people did not respond. The remainder thought that innovation is good and that RIAT study and concept awareness was an eye-opener. People felt encouraged to be self-starters and to address their challenges and become more involved with finding ways to advance their socio-economic wellbeing.

Do you consider your attendance of this workshop to have been a valuable use of your time? Five people did not answer this question and the remaining fourteen participants indicated that attendance of the workshop was beneficial. They wanted RIAT to raise more awareness and to come back to the district to help them to more deeply understand and implement innovation. Some of the participants said it was educational and informative.