Mapping Innovation for Rural Development

in uMzinyathi District Municipality

MAPPING INNOVATION ACTIVITIES FOR RURAL DEVELOPMENT IN UMZINYATHI: PILOT STUDY PRELIMINARY FINDINGS

RURAL INNOVATION ASSESSMENT TOOLBOX (RIAT) PHASE TWO

Prepared by: Brigid Letty, Hlokoma Mangqalaza, Makale Ngwenya, Brandon Bodenstein, Kgabo Ramoroka, Tim Hart and Peter Jacobs

31 August 2013

TABLE OF CONTENTS

LIST OF FIGURES ...... v LIST OF TABLES ...... vi ACKNOWLEDGEMENTS ...... vii 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 ...... 8 5.1 Social profile ...... 10 5.1.1 Population ...... 10 5.1.2 Poverty and health ...... 10 5.1.3 Education ...... 10 5.1.4 Number of houses by type of dwelling ...... 11 5.2 Economic profile ...... 13 5.2.1 Employment ...... 13 5.2.5 Gross Value Added by region ...... 14 5.3 Conclusion ...... 16 6 RURAL INNOVATION IN UMZINYATHI DISTRICT MUNICIPALITY ...... 16 6.1 Introduction ...... 16 6.2 Enterprise profiles ...... 16 6.3 Understanding of innovation and the purpose of innovating ...... 19 6.4 Innovation value chains and types ...... 22 6.4.1 Invention ...... 22 6.4.2 Adoption ...... 23 6.4.3 Diffusion ...... 24 6.4.4 Adaption ...... 25 7 ILLUSTRATIVE CASE STUDIES OF INNOVATION ...... 27 7.1 Introduction ...... 27 7.2 Example 1: uMzinyathi Arts and Crafts ...... 27 7.2.1 Description of the enterprise and innovation activities ...... 27 7.2.2 Reason for innovation ...... 28 7.2.3 Innovation value chain ...... 28 7.3 Example 2: Foundation for Building Schools ...... 29 7.3.1 Description of the enterprise and innovation activities ...... 29 7.3.2 Innovation value chain ...... 29 7.4 Comparison of the illustrative cases ...... 30 8 MICRO OR INTERNAL ENVIRONMENT OF THE ENTERPRISES ...... 32 8.1 Innovation enabling environment ...... 32 8.2 Training and skills development ...... 34 9 MACRO CONTEXT – BROADER INSTITUTIONAL AND REGULATORY ENVIRONMENT ...... 36 9.1 Introduction ...... 36 9.2 Institutional awareness and influences ...... 36

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9.3 Rural innovation systems ...... 40 10 CONCLUSION AND LESSONS ...... 42 11 REFERENCES ...... 45 APPENDIX ONE: RURAL INNOVATION ASSESSMENT TOOLBOX (RIAT) FEEDBACK SESSION TO UMZINYATHI DISTRICT ...... 46

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LIST OF FIGURES

Figure 5.1: KwaZulu-Natal Provincial Map (Source: LGH KwaZulu-Natal, 2013)...... 9 Figure 5.2: uMzinyathi District Municipality Map (Source: LGH KwaZulu-Natal, 2013)...... 9 Figure 6.1: Common combinations of innovation activities ...... 24 Figure 6.2: An example of multiple innovation value chains ...... 26

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LIST OF TABLES

Table 5.1: Total population by gender and age ...... 10 Table 5.2: Highest level of education: age 15years+ ...... 11 Table 5.3: Housing infrastructure ...... 12 Table 5.4: Employment shares in formal economic sectors, KZN and uMzinyathi (2011) ...... 13 Table 5.5: Areas of development identified for the four local municipalities ...... 14 Table 5.6: Sector’s contribution to economic growth ...... 15 Table 5.7: GVA per sector ...... 15 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 = 115) ...... 18 Table 6.2: Average number of part time and full time workers per organisation or enterprise, (N=115) ...... 19 Table 6.3: Share (%) of enterprises aware of social innovation and main purpose of innovation by enterprise type, (N=115) ...... 22 Table 6.4: Share (%) of enterprises engaged in innovation activities by enterprise type, 2011 & 2012, (N = 115) ...... 23 Table 8.1: Share (%) of enterprises with direct access to resources and facilities for innovation, (N = 115) ...... 33 Table 8.2: Share (%) of enterprises using ICTs for innovation and type of ICT by enterprise type, (N=115) ...... 34 Table 9.1: Share (%) of enterprises familiar with ST&I state policies by enterprise type, (N=115) ... 37 Table 9.2: Share (%) of enterprises participating in innovation networks and system by enterprise type, (N= 115) ...... 38

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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 (RDMs). 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 one in a series of four district municipalities (DM) reports and provides the findings for the District of uMzinyathi in KwaZulu-Natal Province. The early conceptual inputs from members of the RIAT Project Steering Committee and other RIAT Project team members, who are not authors of this specific paper, are acknowledged. The contributions of the various fieldworkers involved in this pilot study, namely Nomhle Mpolase, Senzo Mkize, Paul Potgieter, Piet Fourie and Bongani Molife, are acknowledged. We also acknowledge the assistance of those people in the uMzinyathi 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

This report provides preliminary findings on using the Rural Innovation Assessment Toolbox to map innovation activities among a purpose-built sample of 115 enterprises in uMzinyathi District Municipality. To contextualise the findings and motivate some local development possibilities that investment in innovation might be able to increase, the report starts with a brief overview of the research methodology used, the sampling frame, an explanation of working definitions and the pertinent demographic and socio-economic information for uMzinyathi; the latter is used as a background to explore the potential of innovation activities as a catalyst for local development that can enhance human wellbeing. The report then discusses the findings of the quantitative and qualitative aspects generated from the application of the RIAT innovation mapping instrument, and makes recommendations for supporting innovation. uMzinyathi District is one of the poorest and most underdeveloped rural areas of KwaZulu-Natal, with only 16.6% of the population living in urban areas. Some 60% of the municipality comprises Ingonyama Trust Land, under the control of the Traditional Authorities. Lack of education, skills and functional literacy are a challenge to socio-economic development. Furthermore infrastructure backlogs also impact negatively on economic development. The District has a high rate of unemployment (29.5%), with most jobs being in the agricultural sector and community services sector.

Given the high levels of poverty and shortages of jobs, innovation is seen as one mechanism that can contribute to socio-economic development in the area. The rapid mapping exercise provided a better understanding of the extent to which innovation activity is taking place in uMzinyathi, as well as a better understanding of the types of enterprises that are engaging in these activities. The purpose- built survey design coupled with the mechanism of identifying participating organisations through a referral system (viz. snowball sampling) identified a range of public and private enterprises as well as non-profit organisations (NPOs) having innovation activities. Most of these enterprises proved to be statutory registered entities – including being registered with South African Revenue Services (SARS) - though a large number appeared to be engaged in informal transactions and activities. Some are individually owned and operated. In terms of economic sectors, the innovating enterprises were mainly in the tertiary sector (especially community services) and the primary sector (especially agriculture and forestry) with fewer being in the secondary sector (mainly in manufacturing).

The study revealed that most people understood the term ‘innovation’ to relate to ‘new ideas or new and better ways of doing things’, and the concept of innovation activities including adoption, adaption and diffusion – and not just invention - was new for many respondents.

Many respondents (especially within the private sector) were not aware of policies that relate to science, technology and innovation. There appeared to be a greater awareness of state support for innovation, but generally also a perceived need to improve efficacy of government support and/or regulation. Furthermore, despite a fairly high level of awareness of available support, a large number of organisations (especially private enterprises) had not actually applied for support.

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The term ‘social innovation’ was also new to many, with 71.3% indicating that they were not aware of the concept. Despite this, when investigated further it was found that society wellbeing and welfare was frequently the reason for innovating (especially amongst public enterprises and NPOs), surpassed only by innovation for direct economic benefit, which was encountered mainly within the private enterprises. For the latter, innovation included the introduction of new products and processes in some cases and the introduction of new organisational arrangements or marketing strategies in other cases – or combinations thereof. A few enterprises were innovating for subsistence purposes.

In terms of what RIAT classified as being innovation activities (namely invention, adoption, adaption and diffusion), adoption was found to be most prevalent (especially amongst the NPOs) and yet many respondents would not have previously recognised it as an innovation activity. Adaption and diffusion of innovations were also encountered, but in fewer enterprises than was the case with adoption. Diffusion was highest amongst public enterprises and lowest amongst private organisations, which is to be expected as public enterprises often play a role of supporting other enterprises, which could be through diffusion of new products and processes, while private enterprises generally innovate to improve their economic performance and thus are less likely to share their innovations with other enterprises as they may lose their competitive advantage. Invention, which is what many people equate to innovation, was very limited (encountered in less than 5% of sampled enterprises) and possibly reflects the lack of the required skills and facilities. The survey revealed a perceived need for basic skills improvement, as well as sector-specific skills (e.g. operation of machinery, web design skills, etc.), interpersonal skills and business management skills to ensure better innovation in the future.

Innovation was found to take place in a wide range of settings including business premises, communities, farmland, within factories and at home – and to a lesser extent within schools, higher education institutes and research centres. This is a key finding, as it highlights the need to recognise the innovation that is undertaken by non-conventional research and development actors.

The study explored the concept of innovation networks or systems, as these are seen as mechanisms for sharing resources and knowledge. Most of the enterprises supply goods and services within the local market with only a few moving outside the district and the province. Most respondents saw themselves as part of an innovation network – especially public enterprises and NPOs. This was less so for private enterprises, where only 67% perceived this to be the case. The study revealed that support provided to enterprises generally came from other local enterprises, locally-based government support or national level organisations (for example, research institutes and development agencies). While there were some enterprises that indicated that they had innovated independently of other organisations – the latter was less prevalent, and while their innovation activities were independent, the operations of the enterprise involved other actors.

Many of the respondents who saw themselves as part of a network considered these to be formal innovation networks. In terms of the special nature of these networks, there was a fairly equal spread between enterprises with local networks versus those with wider linkage. Building on this

ix concept, relatively few private enterprises (17%) and NPOs (25%) were found to be part of larger organisations, indicating that they were mainly locally based enterprises – except for the public enterprises, which generally saw themselves as part of a larger organisation (government in general or the specific department under which they fell), which in some cases provided access to in-house knowledge and skills. Overall there was a lack of understanding of the concept of a national system of innovation.

Basic resources such as toilets, running water, electricity and cellular phones (many of which are presumably not used for internet access) were reasonably common among enterprise while access to libraries and science laboratories was relatively low. This means that while enterprises are able to operate and to innovate to some extent, the exposure to new ideas and the opportunity to invent are fairly limited. Access to internet via internet cafes and public facilities was found to be very limited.

To sum up, the findings of this pilot study clearly demonstrate the existence of innovation activities amongst rural enterprises and recognition amongst many of them that such activities can improve the income generation potential of the enterprise and/or improve the livelihoods and wellbeing of rural communities. All spheres of government as well as other organisations that support people living in rural areas need to not only recognise the innovative capacity of enterprises, but also provide an enabling environment in which innovation can take place. Given that the study found very limited incidence of invention, with innovation being dominated by adoption, organisations aiming to achieve rural development need to make some key decisions about the route that they wish to follow in supporting innovation. They either need to accept that enterprises do not have access to the necessary facilities nor the necessary skills and thus focus on supporting adoption – or they need to take steps to provide an enabling environment for invention. The exact nature of the facilities required to support innovation also needs to be given attention. Alternatively, support agents can acknowledge that in general the adoption of new ideas/products/processes/arrangements is within the reach of the majority of enterprises and thus interventions should focus on creating exposure to new knowledge. This could include providing internet and library facilities or creating linkages with actors that might have ideas (including cross-visits to other communities where relevant innovations exist). Future exploration of innovation activities should also recognise that innovation takes place in a range of settings and is not limited to research stations, research and development units in big companies or engineering firms. One key role that government must play is to improve the awareness amongst rural enterprises of the supportive policies and programmes that exist, particularly for social innovation. Another role that organisations could play is that of innovation brokering, facilitating the establishment of linkages between different actors and providing access to new ideas that enterprises can incorporate into their own operations.

Multi-stakeholder platforms are one mechanism for bringing different stakeholders together to support ongoing innovation processes or to think innovatively about possible solutions to challenges that rural communities are facing. The support of innovation processes, especially those involving multiple actors, is potentially an effective mechanism to achieve socio-economic development in rural areas such as uMzinyathi.

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1 INTRODUCTION

The report focuses on uMzinyathi Municipal District in KwaZulu-Natal Province and provides some of the findings, and analysis thereof, from the pilot use of the Rural Innovation Toolbox (RIAT) rapid mapping tool (Version 1). 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 uMzinyathi 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 Mompati District Municipality (RIAT rapid mapping tool Version 1) were used to refine the instrument for implementation in the uMzinyathi District Municipality and Dr Ruth Segomotsi Mompati District Municipality (Version 2).

Little is known about innovation in uMzinyathi 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.

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 as well 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

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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, and use (adoption and 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 ‘innovation assessment tool’ 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 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.

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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

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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 improved 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, 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 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 probable 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

1 Of course there could be accumulation by individuals but our understanding of the DST interest and focus is that of broad-based societal benefits, rather than individual and trickle-down benefits of innovation. 2 More information on sampling in terms of sectors and industries per RDM can be accessed by downloading the relevant methodology

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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, wellbeing 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 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

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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 the social wellbeing enhancing innovations.

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 uMzinyathi District Municipality in 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 possible 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 were 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. Consequently, 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 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

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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 uMzinyathi 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 Dundee (Zone A) and Greytown (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 uMzinyathi 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 uMzinyathi District three teams identified and interviewed a total of 115 innovation actors (individuals/organisations/enterprises), which translates to 49 actors in Zone A and 66 actors in Zone B. The upper limit for the district was intended to be approximately 120 respondents from different organisations/enterprises or departments within these organisations/enterprises, and the lower limit was 100. The targeted sample (N = 100-120 organisations/enterprises) was 50% in the primary sector, 20% in the secondary sector and 30% in the tertiary or services sector (the total sample size is based on the upper boundary limit of 120 units). The targeted sample is 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 included a good and ‘representative’ mix of informal enterprises/activities2. The willingness and availability of people associated with the enterprises was an important factor in understanding the

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.

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results, as not all identified potential innovators were willing to be interviewed and others were unavailable. Consequently, the fieldwork teams had to identify other actors in order to achieve the upper and lower limits set by the research managers.

It is envisaged that the rapid mapping survey technique will evolve with the others 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.

5 SOCIO-ECONOMIC INFORMATION FOR THE DISTRICT uMzinyathi District Municipality (UDM) is located in the KwaZulu-Natal Province (see

Figure 5.1 below) with an estimated population of 510 337 which is approximately 5% of the KwaZulu-Natal population that is estimated at 10 347 260. It is one of eleven district municipalities in in the province. The district comprises four local municipalities, namely: Endumeni, Umvoti, Nquthu Nquthu and Msinga (see The main towns are Greytown, Glencoe and Dundee. The more developed areas in uMzinyathi are around Dundee, which is the administrative seat of the uMzinyathi District Municipality, and Greytown, which is a strong regional centre with agricultural and commercial activities. The district has 17 traditional authorities and the bulk of the land, estimated at 60%, is under the control of the Ingonyama Trust, located in the Nquthu and Msinga local municipalities (UDM, 2012).

Figure 5.2). uMzinyathi is located in the north central areas of KwaZulu-Natal. The district is among the poorest and most under-developed rural areas of KwaZulu-Natal. Of the estimated 510 337 residents in UDM, 83.4 % live in rural areas compared to the 16.6 % that live in urban areas in the larger towns (Global Insight, 2013).

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Figure 5.1: KwaZulu-Natal provincial map (Source: LGH KwaZulu-Natal, 2013).

The main towns are Greytown, Glencoe and Dundee. The more developed areas in uMzinyathi are around Dundee, which is the administrative seat of the uMzinyathi District Municipality, and Greytown, which is a strong regional centre with agricultural and commercial activities. The district has 17 traditional authorities and the bulk of the land, estimated at 60%, is under the control of the Ingonyama Trust, located in the Nquthu and Msinga local municipalities (UDM, 2012).

Figure 5.2: uMzinyathi District Municipality map (Source: LGH KwaZulu-Natal, 2013).

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5.1 SOCIAL PROFILE

5.1.1 Population

The total population in uMzinyathi District in 2011 was 510 335 ( Table 5.1). More than half of the population are females (55.2%), at an estimated 281 893. The male proportion of the district population is slightly smaller (44.8%), at a figure of 228 444. The largest individual share of the population is the youth and young adults, at one-third of the district population, while the elderly are in the minority.

Table 5.1: Total population by gender and age Classification Age Number Share % Infants 0-4 72 739 15 Children 5-13 132 717 26 Youth and young adults 14-34 169 974 33 Mature adults 35-65 107 755 21 Elderly 70+ 27 150 5 Total 510 335 100 Source: Global Insight (2013)

5.1.2 Poverty and health

The uMzinyathi District Municipality is characterised by a high level of poverty. Approximately 60% of people live in poverty in the district, compared to 45.3% of people living in poverty within KwaZulu-

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Natal Province as a whole. The Human Development Index (HDI3) is 0.47, which is relatively low compared to the other districts in the pilot study. Income inequality in the district is relatively high, with a Gini Coefficient4 of 0.57 (Global Insight, 2013).

The KwaZulu-Natal Province has the highest HIV prevalence rate in South Africa (UMD, 2012: 64). In uMzinyathi District Municipality the proportion of the population that is HIV positive is estimated at 13.1% or 66 864 people. The annual AIDS mortality rate is estimated at 0.8%, or approximately 3 923 per annum (Global Insight, 2013). HIV and AIDS affect local social and economic development.

5.1.3 Education

Education and skills development are serious challenges to the socio-economic development in uMzinyathi. The levels of adult illiteracy are very high (UDM, 2012: 31).

The functional literacy rate in UDM for the age group 20 years and older who completed Grade 7 was 46% for 2011, while the provincial functional literacy rate5 was substantially higher at 71.6% for the same year. The district literacy rate indicates a small and steady rate of improvement over the period 1996-2011. The district literacy rates have improved from 39.6% in 1996 to 46% in 2011, whereas the provincial literacy rates for the same period increased from 60.3% to 71.6% (ibid.). When compared to the provincial rates, the district literacy rate is very low. Table 5.2 indicates the levels of formal education6 attained by people over fifteen years of age in the district. A significant proportion of people have no schooling (22%) while 12% have completed their primary schooling and can be classified as functionally literate. A small number of people have Matric and a Bachelor’s degree (0.7%) (ibid.). However, the proportion of people with only a Matric is 14.7%, which is 20 times greater than those with Bachelor’s degrees. It is probable that constrained access to higher education, poverty and other social conditions could be preventing learners from study further.

Table 5.2: Highest level of education: age 15years+ Formal Education Level Number Share % No schooling 67 316 22% Grade 0-2 7 211 2.4% Grade 3-6 36 868 12% Grade 7-9 67 077 22% Grade 10-11 64 680 21%

3 Human Development Index is an indicator of development. It measures life expectancy, literacy and the standard of living (Income). 4 The Gini Coefficient is a summary statistic of income inequality, which varies from 0 to 1. If the Gini Coefficient is equal to zero it means that incomes are distributed in a perfectly equal manner, indicating a low variance between high and low income earners in the population. If the Gini Coefficient is equal to one, income is completely inequitable, with one individual in the population earning income, whilst everyone else earns nothing. 5 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. 6 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.

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Certificate / diploma without Matric 1 957 0.6% Matric only 44 674 14.7% Matric & certificate / diploma 12 075 3.9% Matric & Bachelor’s degree 2 167 0.7% Matric & Postgraduate degree 855 0.3% TOTAL 304 880 100% Source: Global Insight (2013)

5.1.4 Number of houses by type of dwelling

There is a substantial need for housing in the district. The provision of houses has been inadequate, with many houses constructed with traditional materials. The number of households occupying traditional housing is 52 198, which is nearly half of the people living in the district. Almost 40% (38 573) of households live in formal dwellings (see Table 5.3).

Table 5.3: Housing infrastructure7 Type of dwelling Number of households8 Very formal 11 126 Formal 38 573 Informal 2 644 Traditional 52 198 Other dwelling type 3 264 Total 107 805 Source: Global Insight (2013)

According to the Integrated Development Plan (IDP), uMzinyathi District has the highest proportion of households residing in traditional dwellings (49.9%) in the province after Sisonke District Municipality. In 2007 the local municipalities had significant housing backlogs. Endumeni had 6.9% of households residing in traditional dwellings, 2.8 in informal dwellings in backyards, and 3.9% in informal settlements. In Nquthu 53.2% of the households reside in traditional dwellings made out of traditional materials (i.e. clay, mud or grass). In Msinga, more than 75% of households are residing in traditional dwellings. In Umvoti 36% of households reside in traditional dwellings and 4.3% in informal settlements. There is a portion (19.1%) who are classified in ‘other’ housing categories (the IDP is not clear what those are) which may also comprise part of the backlog (UDM, 2012: 52).

5.1.5 Sanitation, water and electricity

In terms of sanitation, there is a backlog of approximately 47 630 households without hygienic toilets, i.e. they have no formal toilet and make use of either a pit toilet or bucket system. The proportion of households with access to improved sanitation facilities - ventilation in pit latrines (VIP)

7 The limitations of data do not allow us to get the approximate number or rate of homeless people within this or any of the other districts. 8 The Global Insight Regional Explorer (ReX) output follows the StatsSA definition of a household and a dwelling unit. A household is a group of persons who live together and provide themselves jointly with food and/or other essentials for living, or a single person who lives alone. A dwelling unit, which is a known as a housing unit, is a unit of accommodation for a household, which may consist of one structure, or more than one structure, or part of a structure.

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and minimum standard pit latrines - increased from 8.5% to 24.4% between 2001 and 2007 (UDM, 2012: 40).

There has been a significant improvement in the provision of basic water infrastructure during the 2001 to 2007 period, but despite this significant improvement it is estimated that approximately one third of households are still reliant on untreated sources of water (UDM, 2012: 33). The water backlog for households below the RDP9 minimum level is 7 548 households. Households above this minimum standard are not considered to be part of the water supply backlog even if they are residing in informal dwellings. Above RDP minimum level includes all households that have access to piped water within their dwelling, within their yard or within 200 metres of their dwelling (Global Insight, 2013).

The number of households without electricity connections is 69 555 (Global Insight, 2013). Overall, the levels of electrification in uMzinyathi are very low compared to other districts in KwaZulu-Natal. In fact, this district has the second lowest level of household electrification in the province (UDM, 2012: 44).

5.2 ECONOMIC PROFILE

5.2.1 Employment

The rate of unemployment in uMzinyathi is high at 29.5%, particularly among the male population which has a 33.1% official rate of unemployment10. The female unemployment rate is 25.5%. Table 5.4 illustrates that in KZN, manufacturing (19.7%), households (16%) and community services (15.5%) are sectors that employ a large portion of people, while the sector with the lowest employment is mining (2.4%). For the district, agriculture - at 0.6% of the region’s share - seems to employ a lot of people; this is followed by community services and households, with the other sectors providing very little employment. Table 5.4: Employment shares in formal economic sectors, KZN and uMzinyathi (2011) Region's share of national total11 (%) Formal Sector Employment KwaZulu-Natal Province uMzinyathi District Agriculture 13.7% 0.6% Mining 2.4% 0.0% Manufacturing 19.7% 0.1% Electricity 13.0% 0.1% Construction 10.8% 0.1% Trade 10.5% 0.1% Transport 15.6% 0.1% Finance 12.5% 0.1%

9 Reconstruction and Development Programme 10 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. 11 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.

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Community services 15.5% 0.4% Households 16.0% 0.3% Total 13.8% 0.2% Source: Global Insight (2013)

The main sources of employment in the district are community services (46.6%), agriculture (21.7%) and households (14.9%). In view of the rural nature of uMzinyathi District, the secondary and tertiary sectors play a less significant role, but government services are very important - especially as sources of employment and job creation (ibid, 54).

The UDM does not fall within a primary economic corridor or node; therefore, it is not a priority investment destination for the public or private sector in terms of the KZN Spatial Economic Development Strategy (see UDM 2012 for more information). However, it was a priority in terms of the Integrated Sustainable Rural Development Programme (ISRDP) node (ibid, 58) and is currently a site of some wards participating in the current Comprehensive Rural Development Programme (CRDP).

Table 5.5 illustrates the area of development earmarked by the UDM for further economic development in each of the local municipalities. It would seem that the authors of UDM 2012 are actually considering a novel intervention to ensure that subsistence agriculture is recognised as a contribution to rural livelihoods and are thus attempting to support this sector.

Table 5.5: Areas of development identified for the four local municipalities Town Area for development Endumeni Agriculture and tourism Nquthu Subsistence agriculture Msinga Subsistence agriculture Umvoti Commercial agriculture Source: UDM 2012

5.2.2 Tourism Tourism in uMzinyathi is developed around historical tours to the ‘Battlefields of the Zulu Kingdom’ tourism routes, as well as heritage and cultural tours (ibid, 56). However, this area of tourism is not developed well enough to create significant employment opportunities. There are five famous battle sites that provide tourism opportunities: Bambatha Rebellion; Fort Bengough; Rorkes Drift; Fugitives Drift; and the Battle of Blood River.

5.2.3 Agriculture The UDM is largely characterised by subsistence and small-scale agriculture, which are the primary sources of sustenance and income for a large part of the local population (UDM, 2012). More commercially focused and significant farming activities include large-scale beef cattle ranching.

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5.2.4 The key service delivery priorities The UDM has recognised the following services as priorities in the region: water; sanitation; electricity; education and skills development; access to roads; refuse removal and regional waste sites; HIV/Aids prevention; and housing development (ibid.).

5.2.5 Gross Value Added12 by region

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 manufacturing, electricity, construction and trade activities. The tertiary sector consists of transport, financial and community services. Table 5.6 illustrates the provincial and district contributions to economic growth. For the district, the primary sector contributes 18%, the secondary sector 7.5% and the tertiary sector 74.5%. The provincial contribution for the primary sector is 6.4%, the secondary sector 23% and the tertiary sector 70.6%.

Table 5.6: Sector’s contribution to economic growth Sector's share of regional total (%) KwaZulu-Natal uMzinyathi Primary sector 6.4% 18.0% Secondary sector 23.0% 7.5% Tertiary sector 70.6% 74.5% Total 100.0% 100.0% Source: Global Insight (2013)

Table 5.7 illustrates the contributions from various sectors to the district economy and the sector’s share of regional total. Community services such as health, education and public adminstration contribute the largest portion of Gross Value Added (GVA) in the district (41.3%). This contribution is followed by finance with 20.7% and agriculture with 15.8%%.

Table 5.7: GVA per sector Gross Value Added by Region (GVA-R) Sector's share of regional total13 (%) KwaZulu-Natal uMzinyathi Agriculture 4.4% 15.8% Mining 2.0% 2.2% Manufacturing 16.9% 3.8% Electricity 2.8% 1.6% Construction 3.3% 2.1% Trade 18.0% 8.5% Transport 12.9% 4.1% Finance 18.2% 20.7% Community services 21.4% 41.3%

12 Gross Value Added is a measure of output (total production) which measures the total output of a region by considering the value that was created within that region. One can think of GVA-R as the difference between the inputs obtained from outside the region and the outputs of the region – that is, the region’s total ‘value added’. 13 The sector contribution to the region is the percentage of that sector compared to the total Gross Value Added (GVA) of the whole region.

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Total Industries 100.0% 100.0% Source: Global Insight (2013)

From Table 5.8 we see that the tertiary sector contributes the largest portion to the district’s GVA, namely 4.1%, while the primary and secondary sectors are lower at 0.6% and 0.1% each.

Table 5.8: Contribution to total economic growth (% point, constant 2005 prices)14 Primary, Secondary & Tertiary Sector shares KwaZulu-Natal uMzinyathi Primary sector 0.1% 0.6% Secondary sector 0.6% 0.1% Tertiary sector 2.0% 4.1% Total 2.7% 4.7% Source: Global Insight (2013)

5.3 CONCLUSION

The uMzinyathi District Municipality has a high level of poverty, unemployment and income inequality; there is also a high prevalence of HIV infection. These factors constrain the local economy in various ways. The location quotient for agriculture is very high. This means that the local economy could benefit with the diversification of the other sectors that exhibit potential. This requires more research which is beyond the scope of the current pilot study.

The reliance on community services as the largest source of employment is not sustainable, since such services are mainly state driven and involve temporary programmes. The message is that other sectors must be supported in order to achieve economic growth and development. The challenges of low education levels add to social under-development and further constrain the local economy through lack of skills and employability of the local people.

6 RURAL INNOVATION IN UMZINYATHI DISTRICT MUNICIPALITY

6.1 INTRODUCTION

The rapid mapping survey instrument can be divided in to five core sections, each composed of several questions that together provide evidence about the five main areas of interest. This study discusses these areas in turn and 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.

14 This measure depicts a particular sector's contribution to the total growth of the total regional Gross Value Added (GVA). Sector comparisons can be made either in terms of the primary, secondary and tertiary aggregates, the 9 broad, one digit level, SIC sectors or the 34 detailed, two digit level, SIC sectors.

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A sample of 115 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 study identified a range of enterprises with innovation activities in uMzinyathi but private enterprises and NPOs were slightly more prominent than public enterprises (see Table 6.1). In terms of formal registration, the majority of enterprises were found to be registered. Private enterprises were mainly registered as CC/Pty (Ltd) businesses (56.65%), while 17.39% were not registered at all and 13.04% were registered as cooperatives. Most NPOs were registered either as Section 21 companies (45.75%) or cooperatives (40%). Most enterprises interviewed were said to be registered for business income tax (96.55% of public enterprises; 76.09% of private businesses and 60% of the NPOs). Most public enterprises interviewed were operating under a certain group or organisation (i.e. falling under a provincial or national government department) but this was not the case for the private and NPO enterprises. Only 17.39% of private enterprises and 25% of NPOs were part of a larger enterprise. This seems to indicate that most private enterprises and NPOs are local enterprises that are based predominantly within the district.

The length of time that the various enterprises had been in existence was also investigated. It was found that public enterprises were the longest operating enterprises in the district. Their average number of years in operation was 21.4, while private enterprises had an average of 12.4 years in operation, and NPOs had the least number of years in operation at 10.4 years on average.

Looking at the broad economic sectors within which enterprises operate, it was found that the largest share of sampled enterprises (almost 60%) were engaged in tertiary service activities, followed by primary sector activities. Secondary sector activities were less prominent across all enterprises, especially in the public sector where they only made up 6.9% of the enterprises.

When examining the spread of enterprise activities within these sectors, it was found that a large proportion of the enterprises were involved in community and social services, agriculture and forestry, and education and training.

In the tertiary services sector, roughly two thirds of all enterprises are involved in community/social services and the trade/finance subsectors, but the variation in enterprise involvement is worth highlighting. Community social services made up 34.48% of public enterprises as the most prominent enterprises, followed by agriculture and forestry activities (31.03%) and then education and training (24.14%). Private enterprises are mostly within the trade and finance sector (34.78%) and the manufacturing sector (21.74%). There were no private enterprises identified within the research sector. The NPOs were mostly within the community and social services sector (35%) and the agriculture and forestry sector (35%), although there were a notable number of enterprises that fell within the manufacturing sector (15%). Overall for uMzinyathi District, there were very few

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enterprises with innovation activities identified in the research sector, mining and minerals sector and the health sector.

The largest market that enterprises supplied was investigated. It was found that most enterprises sold their outputs in the local market (67 out of 115 enterprises interviewed) which refers to the distribution of goods and services inside the boundaries of the local municipality. Sales to customers in other local municipalities within uMzinyathi or even neighbouring district municipalities amounted to roughly 10% of the market size across all enterprises. Unsurprisingly, private enterprises were the dominant suppliers across all market categories, including a very small number of cases where they were supplying national and international markets.

Table 6.1: Share (%) of enterprises/organisations in terms of statutory registration, taxation, economic sector, group membership & output distribution by enterprise type, (N = 115) Profile information Valid Public Private Non-profit observations enterprises enterprises organisations (n = 29) (n = 46) (n = 40) Statutory registration Business CC/PTY(LTD) 27 0 57 3 Registered with government 32 100 2 5 Department NPO/ Section 21 19 0 0 47 Cooperative 22 0 13 40 Sole proprietor 5 0 11 0 Not registered 10 0 17 5 Income tax SARS registration 87 97 76 60 Exempted from tax 6 3 4 8 Not registered 22 0 20 33 Economic sector Primary sector 32 34 17 35 (Agriculture and forestry) (28) (90) (63) (100) Secondary sector 18 7 22 15 (Manufacturing) (18) (100) (100) (100) Tertiary sector 65 59 61 50 (Community social services) (26) (59) (7) (70) (Trade and finance) (16) (0) (57) (0) Part of larger group or organisation Part 43 86 17 25

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Main territory of output distribution Sales of output - locally 67 40 80 47 Note: Valid Observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies)

The capacity of different enterprises to provide full time and part time employment was investigated (see Table 6.2). Employment figures for public enterprises were generally higher than for private enterprises of NPOs. Employment levels showed constant increase for both part time and full time workers across all enterprises from 2011 to 2012. Public enterprises employed a much greater number of part time workers (possibly contract staff) compared to full time workers, while private enterprises and NPOs employed more full time workers than part time workers and private enterprises employed the least part time workers. From the study, NPOs were found to employ the lowest number of full time workers per enterprise.

Table 6.2: Average number of part time and full time workers per organisation or enterprise, (N=115) Full/Part Time Worker (Year) Valid Public Private NPO observations enterprises enterprises (n=40) (n=29) (n=46) Full time workers (2011) 112 29.5 19.4 17.9 Full time workers (2012) 113 30.9 21.4 18.6 Part time workers (2011) 113 65.3 4.07 8.38 Part time workers (2012) 113 75.8 4.76 9.57

6.3 UNDERSTANDING OF INNOVATION AND THE PURPOSE OF INNOVATING

The survey explored the respondents’ understanding of social innovation (see Error! Reference source not found.) and innovation in general at the beginning of the survey, and then again after engaging in the interview process. 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’. Regarding the term ‘social innovation’, the survey demonstrated that prior to the RIAT project there was little knowledge of the term in the uMzinyathi District, very much the same as in the other districts (only 28.7% of respondents indicated that they were aware of the concept). However, the type of enterprises that had the greatest awareness of the concept was public enterprises (41.38% of public enterprises), while private enterprises had the least awareness of the concept, with only 23.91% of the enterprises having prior awareness. The situation was similar for NPOs.

The conceptualisations of what social innovation is were broad, and more often than not, equated with community development and upliftment. The enterprises that were able to define it were

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usually in the community services sectors and the social innovation concept was interwoven with their goals and objectives as enterprises that are there with the purpose to address social ills and provide the services that government cannot. Some definitions given were: • ‘Improving the way society lives through upgraded methods.’ • ‘To improve what you have so that other people can benefit, for example, identify a need within the community and improve...the community at large.’ • ‘Social development, social upliftment technologies that have a social benefit and contribute to community...to help people.’

These definitions may not be exactly according to the one provided in the RIAT questionnaire but they do emphasise similar characteristics, namely upliftment, community and improving what you have for the benefit of others. The majority of organisations may not be able to define it but they are actively engaged with the ideas of social innovation. In general, after the RIAT definition of social innovation was explained, respondents were in agreement with the definition. Despite the term ‘social innovation’ not being understood by many respondents, the survey showed that there was quite a lot of activity around social innovation. Consequently, we examine some of the examples supplied by the respondents. This will shed some light on the diversity of what are termed social innovations that were found to be occurring in the uMzinyathi District.

Using only a restrictive meaning of social innovation, respondents in many enterprises were able to identify illustrative examples and cases of this concept from their own activities. The enterprises that were involved in social innovation understand these to be innovation activities with direct social benefits. There were numerous instances of innovations that respondents claimed to be geared towards social upliftment, but which were more focused on improving profit margins within the enterprise. One such example was a commercial farm established in 1883 that has been farming with a range of livestock, including cattle (mainly Nguni and Boran breeds), chicken, guinea fowl, sheep and goats. In 2011 the enterprise’s innovation involved the adoption of new processes for incubating guinea fowl eggs, namely using chicken hens to incubate guinea fowl eggs. This was said to be beneficial because ‘it allows the guinea fowl to lay more eggs, which is more profitable than chicken eggs’. This innovation was diffused to the workers on the farm, who now use the same process for hatching their personal guinea fowl eggs. This example is not a clear example of social innovation because the IVC starts with adoption that was economically driven and the diffusion was a by- product of the successful adoption.

However, there were many instances of innovation that was geared directly towards uplifting the communities. For example, an organisation in the education and training sector played a facilitative role in the community and acted as a liaison committee. The group worked with child development training educators, as well as getting involved in disseminating subsistence crop farming practices in the communities with which they engage. The enterprise’s innovation activities involved the adoption of two new products, one in 2011 and the other in 2012. The first adopted product was the ‘toy library’. This concept was aimed at preparing children in the rural areas for school by taking ‘educational toys’ to the communities in order to enhance children’s mental development. The

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second adoption, in 2011, was a product called ‘bag gardens’. It consisted of growing vegetable seedlings in a bag and then distributing these bags into the rural area and providing training to the community growers. The two product adoptions were then adapted, the former was adapted in the same year - the educational toys were placed into containers and the process was now facilitated by a qualified librarian. The IVC started with the adoption of a product, followed by the adaption of the same product. The ‘educational toys’ concept was diffused into the local communities by encouraging the local community to make and operate it for themselves. These innovations are geared at social upliftment within the community.

Another example of social innovation encountered was a public library that started providing public access to information, ranging from book to Internet services. In 2011 they adopted the idea of a ’mobile library’ that would ensure schools in the surrounding area had access to reading materials. This adoption can be seen as a social innovation because it provides a new service with the intention to assist community upliftment. The mobile library offered Internet access to students and provided computer skills development classes. The classes included basic word processing and Internet surfing. The library also adopted the service of introducing study groups for students. The students had the opportunity to engage with one another in order to encourage studying in schools. The services were further adapted in 2011, when the mobile library started delivering books to the surrounding schools. These were distributed to the various schools and could then be accessed on the school property when the mobile facility was not present. The study group innovation also underwent further adaption; initially the process of selecting students was on a ‘first come, first served’ basis, but after seeing the increased interest they started forming more groups and also grouped the students according to subject, i.e. students interested in computer classes were grouped together. This example can be seen as a social innovation since it involved providing a new service targeted at community upliftment. In conclusion, both these cases mentioned are testament to the demand for social innovations and innovators within the uMzinyathi District. Social upliftment is not simply a matter of supporting financially viable enterprises but is also about supporting institutions that are addressing social challenges. Social innovations are not limited to the workings of the community service sectors but can be found in many other sectors. An example of social innovation that takes place outside of the community service sector is by the Department of Agriculture, who adopted a new production system of ‘tunnels’ for vegetable production. These structures were made available to community members for free, allowing them to grow vegetables in a controlled environment. The vegetables are distributed and sold by the community. The innovation adopted has social upliftment as its key reason for being adopted. While there may not be a clear way for people in uMzinyathi to express their understandings and definitions of social innovation, it is clear that many of their innovation actions are geared towards upliftment (often social and economic). Many of these innovations have the potential to be diffused into other districts too.

Regarding the improvement in understanding of the concept of innovation as a result of participating in the interview, a typical response that emerged was that the process had created ‘awareness of the innovation taking place within the enterprise’. This self-learning component revealed that enterprises were internalising the concepts of innovation and were able to link them to the everyday activities of the enterprise. The enterprises who expressed this awareness of innovation did not

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make specific reference to any particular type of innovation but rather expressed that enterprises could identify with the concept of innovation. One respondent, in the trade and retail industry, namely a lodge, explained that they learnt that ‘innovations are new ideas applied in everyday living and business’. The term ‘new idea’ was used synonymously with the term innovation; the enterprises found it to be a term they could relate to many of the new ideas brought into the enterprise. The idea of understanding an innovation as a ‘new idea’ specific to the enterprise has worked in establishing a common platform to discuss innovation. Speaking about the ‘new ideas’ in the first section of the questionnaire, which focuses on the respondents’ understanding of innovation, was found to establish common ground between the enterprise and the concept of innovation as defined later in the questionnaire.

The bottom part of Table 6.3 also displays information about the main purpose why enterprises engage in innovation activities. It was found that there was substantial variation in the main purposes why enterprises had engaged in innovation activities. When considering all three types of enterprises, it was found that innovation for economic benefit was the greatest, followed by innovation undertaken to achieve social welfare or improve human wellbeing. Looking at each of the types of enterprises in isolation it was found that for public enterprises, innovation was mainly for social welfare and human wellbeing (68.97% of enterprises). In the case of the private enterprises, it was mainly for commercial purposes (in 76% of enterprises), while in NPOs innovation was mainly for achieving social wellbeing (45% of enterprises), although a substantial number of enterprises innovated for commercial purposes (37.5%). Innovation for survival and subsistence purposes as well as for the purpose of expanding the frontiers of knowledge was fairly limited (only 7 and 15 valid observations respectively out of 115 respondents). A greater proportion of enterprises that took part in innovation activities for survival and basic subsistence were NPOs (though this was a limited percentage of the NPO enterprises). In the case of innovation to expand the frontiers of knowledge, there was greater incidence of this within the public sector than in private enterprises or NPOs.

Table 6.3: Share (%) of enterprises aware of social innovation and main purpose of innovation by enterprise type, (N=115) Awareness and main purpose Valid Public Private Non-profit observations enterprises enterprises organisations (n= 29) (n= 46) (n= 40) Awareness of concept social innovation Aware of social innovation 33 41 24 25 Not aware 82 59 76 75 Main purpose of innovation activity Direct economic benefit 51 3 76 37 Society wellbeing and welfare 42 69 9 45 Basic subsistence purposes 7 0 7 10 Expand frontiers of new knowledge 15 30 9 8

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Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies).

6.4 INNOVATION VALUE CHAINS AND TYPES

As discussed earlier, the innovation value chain (IVC) is described as consisting of four key innovation activities: invention; adaption; adoption and diffusion. In Table 6.4 we report information about the extent to which enterprises were engaging in different innovation activities. Mapping these activities formed a core part of this study and the findings thus deserve closer explanation.

6.4.1 Invention

Invention levels in the district were very low across all types of enterprises. Only six enterprises were captured as having invention activity in 2011 or 2012. The invention activity rarely coincided with other types of innovation activities. Some examples of invention are provided. An unregistered arts and crafts enterprise was established in 2011 by an individual trying to make a living. The enterprise created artwork from waste materials and then sold them, to make a living. The enterprise started making model helicopters and decorative sculptures out of wire and cardboard. The enterprise invented a new product in 2012, when the artist decided to create model helicopters that could fly. This was achieved by adding a motor to the wire and cardboard helicopter. The main reason for the invention was to access a larger customer base by improving the quality of the work and what the product could do.

Table 9: Share (%) of enterprises engaged in Innovation activities by enterprise type, 2011 & 2012, (N = 115) Innovation Valid Public Private Non-profit activity observations enterprises enterprises organisations (n= 29) (n=46) (n= 40) 2011 2012 2011 2012 2011 2012 2011 2012 Invent Yes 3 3 0 3 4 4 3 0 No 112 112 100 97 96 96 97 100 Adopt Yes 84 37 69 38 65 30 85 30 No 31 78 31 62 35 70 15 70 Adapt Yes 25 41 24 17 17 43 25 40 No 90 74 76 83 83 57 75 60 Diffuse Yes 44 31 55 14 24 24 43 40 No 71 84 45 86 76 76 57 60 Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies).

6.4.2 Adoption

Regarding the different innovation activities, there was greatest evidence of adoption. Adoption levels in 2011 were found to be high across all enterprise types but appeared to decline substantially

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in 2012. For example, in 2011 adoption levels were greatest in the NPOs (85% of enterprises), but declined to 30% in 2012. This adoption by the various enterprises included a range of innovation types (products, processes, marketing strategies and organisational arrangements), i.e. innovation involves the adoption of diverse innovations. Innovation which involves adoption played an important role in the IVC of uMzinyathi District and was followed by innovation which involved diffusion.

The public library mentioned above started providing public access to information ranging from book to Internet services. In 2011, they introduced a new service of a mobile library. They adopted the idea of a ’mobile library’ that would ensure schools in the surrounding area had access to reading materials. Similarly, the farming enterprise that adopted the new process of incubating guinea fowl eggs, diffused this technology to its farm workers.

What is important to notice in the two cases above is the IVC which started with the adoption of a product, and was then followed by the diffusion of the new products (goods and services) to other users. After the diffusion took place, further adaption of the innovations was the next type of innovation activity that took place. This adaption could be viewed as reactive to the community and schools’ needs. This combination of innovation activities was found to be fairly common in the uMzinyathi District. In addition, these examples illustrate that in many instances a single enterprise will have more than one innovation activity – which may in fact not be directly related, although sometimes it is two positions along the same IVC. The IVC in these two examples also expresses how adoptions can be understood as improvements and/or expansions of the core functions of the enterprises and how they can be understood as a means to an end. The adoptions are additions to the existing function of the enterprise and allow for greater opportunity to improve their production levels or the services offered.

Figure 6.1: Common combinations of innovation activities

‘Adoption’ of someone else’s innovation

‘Diffusion/Transfer’ of this Innovation

‘Adaption or improvement’ of this innovation

‘Diffusion/Transfer’ of the innovation after adaption to originally adopted innovation

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6.4.3 Diffusion

The study found that there was a fair amount of diffusion of innovations occurring within the surveyed enterprises. The diffusion usually involved the sharing/dissemination of products and processes; with the occasional enterprise diffusing all four activities (products, processes, marketing strategies and organisational arrangements). In terms of the diffusion of innovations, public enterprises had the highest rates in 2011, which dramatically declined from 55.17% to 13.79% in 2012. NPOs were the second highest diffusers in 2011, and although their diffusion levels declined slightly in 2012, they were still the highest diffusers compared to all other enterprises. Overall, there was a fairly limited amount of diffusion activity recorded by the enterprises, which could indicate that organisations mainly innovate for their own purposes and do not, therefore, regularly share their innovations with other parties.

Enterprises in the uMzinyathi District were, however, found to have a greater affinity for incorporating diffusion into their innovation endeavours than other districts covered during the pilot phase of the research. The desire for diffusion of activities was explored to decipher why diffusion was fairly prevalent. As mentioned above, adoption is often followed by diffusion of the innovation. A case that illustrates this concept was a pipe manufacturing company that supplies irrigation pipes. The enterprise adopted new products (piping systems, tanks and valves) into their business during 2011 and 2012. These additional products were defined as ‘big science’ by the enterprise, being products that would ensure better irrigation distribution and management. The adopted products were diffused in 2012, when the enterprise started informally sharing the new products and stock with other retailers in the district. The IVC in this instance consists of an adoption of a new product followed by ‘one tier diffusion’, meaning that the diffusion was adopted by the other enterprise and no innovation related to the product took place on the next level, i.e. by the next recipient. The enterprises which adopted the new products did not diffuse them further but sold them to consumers.

Another example of this one tier diffusion is a crop production project that adopted the production of chicory in the district. This project was an initiative by the Department of Agriculture and Environmental Affairs. The adopted product also included the adoption of disease control processes for the chicory crop, as well as basic farming practices suitable for the crop. These activities are considered a part of the overall adoption of the product and are not deemed to be separate innovations as such, largely because the entire production process was diffused as a single package. The adoption took place in 2011 and was followed by diffusion in the same year to local farmers in the district. The diffusion of the product was mainly driven by the desire to reduce the amount of chicory imports from China. This adoption hinged on the collaboration between the private sector and a government department. Diffusion entailed participating in meetings, training, attending presentations and feedback on the use of the introduced methods of chicory production in the local context. This was made possible through the assistance provided by a farmers’ association and local co-operatives. The adopted product was not diffused, improved on or adapted by other farming enterprises that were not selected by the government. This one tier diffusion has not seemed to hinder the success of the innovation.

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6.4.4 Adaption

The third aspect of the IVC which was encountered in this district was innovation that involved adaption. It also emerged that this was usually a forerunner to diffusion. Adaption levels in both 2011 and 2012 were relatively low. Though there were improvements in both private enterprises and NPOs from 2011 to 2012, levels of adaption were still below 50% for all enterprises in 2012. Private enterprises moved from being the lowest adapters to being the highest in 2012.

Adaptations are usually made to products and processes with some occasional adaption of organisational arrangements. An example of an enterprise from uMzinyathi that adapted a product was a private agricultural enterprise established in 2011. It started by adopting mixed vegetable farming in 2011. As a mechanism for ‘alleviating poverty in the families of the members, [allowing us as members] to keep busy to ensure that we stay out of trouble and to generate an income’. The process of crop management was adapted in 2012, when they adapted their process of crop management by introducing crop-rotation. They also adapted their land management practices by dividing the farm land with fences. This land management came about as a result of the adaption to the crop management. This initiative offered protection of the crops from the livestock as well as organising the land according to the various activities being undertaken (livestock and diverse crop farming). The third innovation activity consisted of the adoption of an organisational arrangement in 2011 when they formed a youth co-operative within the community to encourage youth in the local community to take an interest in farming and business. There was no such group in the community and this change enabled them to engage with the youth. This enterprise, as well as many others in the district, had more than one IVC taking place. These adaptations are usually changes in processes to ensure the success of the first innovation activity. In the cases where there are multiple IVCs that can be defined, it is important to distinguish between the main IVC and the subsidiary, or spin-off IVCs, which may be a part of the enterprise’s innovation activity. The three separate IVCs mentioned above are all intertwined with the first adoption. These IVCs start with adoption, and are followed by adaption. It is clear that one adaptation can lead to another.

Figure 6.2: An example of multiple innovation value chains

‘Adoption of crop-farming’ in 2011

‘Adaption to crop management’ by IVC 1 introducing crop rotation

‘Adaption to land management’ by

IVC 2 introducing fences for the crops (division of crops as well as protection of crops from livestock)

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‘Adoption of organisational arrangement IVC 3 that allowed for engagement of the youth’

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7 ILLUSTRATIVE CASE STUDIES OF INNOVATION

7.1 INTRODUCTION

This section presents two studies selected from the cases documented during the rapid mapping of rural innovation in uMzinyathi Municipality. The two cases provide examples of different types of innovations that have societal benefits. The purpose of the section is to provide a better understanding of some of the concepts and terminology associated with rural innovation, as well as an understanding of the context in which innovation takes place and the support required to encourage or initiate it as a mechanism for overcoming challenges and seizing opportunities that are identified. The names of the enterprises have been changed for the sake of confidentiality.

7.2 EXAMPLE 1: UMZINYATHI ARTS AND CRAFTS

7.2.1 Description of the enterprise and innovation activities uMzinyathi Arts and Craft (UA&C) is a registered non-profit organisation that was established in 1962 and is located on a church mission farm in Msinga Local Municipality. In terms of its main activities, the centre falls within the community and social services sector as it aims to improve the lives of the local community. This is a centre that was established by a committee formed in 1961 in Stockholm, Sweden, with the aim to improve arts and craft in Africa. Two volunteers were sent to South Africa to work at a mission in Zululand. The main purpose of this initiative was to capacitate women students as arts and crafts advisors to work with patients in hospitals. Funds were raised through arts and craft exhibitions in Stockholm, which were later used to set up the first premises before they moved to the current location in 1962. Usually arts and crafts centres tend to struggle to sustain their activities and to improve their enterprise over time. The longevity of uMzinyathi Arts and Crafts can be attributed to their innovative behaviour.

The centre, which provides employment for 40 fulltime workers, manufactures handmade art including carpets, tapestries, beadwork, and ceramic objects. The centre processes raw karakul fibre, imported from Namibia, into wool to make their carpets. Apart from a local store, the centre has outlets for its products across South Africa and some international markets (its largest market), and their products are accessible through online marketing and purchasing.

A number of innovation activities were identified within the centre, including the introduction of a new digital textile screen printing machine, which was imported in 2011 (other equipment previously introduced included a modern pottery wheel and a spinning machine for wool). The new technology called for the adoption of new techniques for making their products. Besides the technical aspects of the enterprise, it also participated in the Design Indaba Exhibition for the first time in 2012 to open up additional marketing opportunities. Lastly, in 2011, the centre appointed volunteers from Germany to teach computer literacy to some of the younger workers as a means of improving local skills development.

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7.2.2 Reason for innovation

The goal of the innovation activity within uMzinyathi Arts and Crafts (UA&C) could be considered social innovation as it is aimed at achieving community upliftment through improved income generation by the members. The innovation activity has had economic impacts for the community by developing local skills and creating more jobs and skills improvement, also allowing for entrepreneurial development (some of the workers who improved their computer literacy skills have been able to find work in nearby towns).

7.2.3 Innovation value chain

Considering the different types of innovations and innovation activities introduced in the section above, UA&C has shown diverse forms of innovation.

Adoption process: Firstly, the centre adopted a new product, namely the digital textile screen printing machine. Other equipment previously introduced included a modern pottery wheel and a spinning machine for wool, which could also be seen as examples of product innovation. These adopted products have increased both the quality and the efficiency of the enterprise. With the new equipment, the centre has also had to adopt new techniques for making their art and craft works, and these new techniques can be seen as new ‘processes’.

The enterprise’s innovation activities have also included the adoption of a new marketing system. Besides selling through its local outlet and various international outlets it had already secured, the centre participated in the Design Indaba Exhibition for the first time in 2012. This was seen as a mechanism to open up additional market opportunities.

Adaption process: As a means of developing skills and sharing knowledge, the centre has historically brought in volunteers from Germany to train local workers and unemployed community members. They have learnt skills such as pottery, beadwork, processing fibre and making carpets. This informal, rather casual manner of imparting skills and knowledge to other local people has resulted in fewer unemployed people in the village and more entrepreneurs, as some of the trained workers have left the centre to work independently. More recently, the centre adapted this system (which could be referred to as an organisational arrangement) and appointed volunteers from Germany in 2011 to teach computer literacy to some of the younger workers.

When considering uMzinyathi Arts and Crafts and its innovation activity, one needs also to consider the institutional and regulatory environment. While not explored in developing this case study, the regulatory environment would control the export of goods from South Africa and their importation into other countries. New equipment being introduced could be subject to import duties, which could, for example, make it unaffordable. One must also consider the market as part of the broader environment as the enterprise can only remain successful while there is a demand for the products that it makes – or it must adapt to changes in market demand.

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The innovation system within which the Arts and Crafts Centre is located includes the church that supported the establishment of the initiative, and which continues to host the centre, as well as a German non-governmental organisation (NGO) that has raised funds and which provides access to skilled volunteers to support the centre. This is a formalised arrangement that has provided access to information about new equipment and techniques that could add value to the enterprise.

7.3 EXAMPLE 2: FOUNDATION FOR BUILDING SCHOOLS

7.3.1 Description of the enterprise and innovation activities

The Foundation for Building Schools (FBS), based in uMzinyathi District, was established in 2007 and it falls within the community or social services sector. The survey found that the main focus of the foundation is on strengthening the learning environment for educators and learners at schools in the local village and other areas within the bounds of the uMzinyathi District Municipality.

The work of the foundation covers different aspects pertaining to improving the learning environment (including reducing the children: teacher ratio) but one of its most prominent achievements is the infrastructure project, where the foundation raised funds to build new and/or renovate existing classrooms, administrative blocks and other facilities such as kitchens, toilets and electrical infrastructure for local schools. It partnered with a number of organisations for assistance in achieving this. In addition, a number of sub-contractors from the local community were appointed to supply thatched grass and ceiling panels and provide insect repellant treatment. By making use of local people as builders and sub-contractors, this initiative resulted in a large cash injection into the community.

Aside from infrastructural development, the foundation also undertook to address the low levels of computer literacy in schools. To achieve this, the foundation has been working closely with the Department of Education (DoE) and Durban University of Technology (DUT) to arrange a leadership and schools management course for sixteen school principals from local schools. The course also entailed teaching school principals some basic computer literacy skills in order to curb the high number of unused computer laboratories in schools and to improve the exposure of rural primary school kids to computers and computer literacy programmes.

7.3.2 Innovation value chain

Thus two distinct innovation processes were identified at the foundation, one associated with an infrastructure project and the other associated with the computer literacy project. Innovation activities of FBS have included invention, adoption, adaption and diffusion. The types of innovations produced have included new processes and new organisational arrangements.

Invention process: To address the computer literacy challenge, the foundation developed (invented) a new organisational arrangement involving DoE, DUT and local schools.

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Adoption process: In the case of the infrastructure project, firstly there was the adoption of a new building method making use of local materials and skills. The building method is called the rammed earth building method. This is an old building method that has been used to build structures both universally and locally. It is a cost effective, low-tech method that yields durable structures, can use local skills, produces low levels of pollution and requires a low capital investment in equipment. In this case the innovation was a new process (i.e. the building technique).

Adaption process: The building method was adapted to suit local conditions but the adapted system has not been patented as the Foundation wants to see other people and organisations copying their initiative.

Diffusion process: It was reported during the interview that the community has formed a group that is building houses using the methods developed by the foundation. This diffusion of the building technique was a planned and organised process. Local community members that have been trained through the initiative are now applying the method elsewhere. The method for skills development and transfer, which has allowed for diffusion of the new technique, is an example of a new organisational arrangement.

The foundation is not itself part of a larger organisation, but it has been part of a formal innovation system through which it was able to share resources and knowledge. The system comprised not only the local community, DoE, DUT and local primary and secondary schools, but also other organisations that have played specific roles in the two innovation processes. For example, the strict regulatory environment regarding school structures required that this non-conventional building method had to undergo a testing and validation process before it could be implemented at a school site. As a result, the building method was piloted at a school near Johannesburg, Mablomong High School. After the evaluation process, the local community members who were to be involved in building school infrastructure received Skills Education Training Authority (SETA) accredited training in building techniques from accredited trainers. Thus some of the key players involved in the innovation system included the Johannesburg Engineering Centre, which was involved in accrediting the building technique and SETA, which was involved in the coordination and provision of accredited training.

7.4 COMPARISON OF THE ILLUSTRATIVE CASES

Do rural people benefit from innovations? The two enterprises selected to provide examples of innovation processes both fell within the community social services sector, and both aimed at improving rural livelihoods. Both enterprises were located within rural communities where they aimed to improve the local environment – for the arts and crafts centre this was through income generation and skills transfer for the 40 people employed at the centre, while for the FBS it was mainly through improving the learning environment at local schools although their approach also provided income generating opportunities for the local community. Thus both examples exemplify social innovation, although the one had impacts for the broader local community (through the improvement of the local school environment), while the other had impacts for those households directly involved with the arts and crafts centre. The latter

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could be seen as innovation having economic impacts as it was seeking to improve the production and marketing of the enterprise – but the primary objective of this was to improve the livelihoods of the workers from the local community as well as other unemployed people who benefited through the skills development efforts of the centre.

Why innovation? Both enterprises recognised the need to find new ways to improve the functioning of their organisations and the impacts they were having on the local community. Both cases show that a number of different innovation processes can occur within an organisation – sometimes they complement each other, while in other cases they are less closely linked. For the arts and crafts centre, the adoption of a new product (textile screen printing machine) and associated process (printing technique) was complemented by the adoption of new marketing strategies (attending the Design Indaba) as well as the adaption of the organisational arrangement (to allow for the transfer of computer literacy skills from volunteers to workers rather than just artwork skills). The FBS, on the other hand, adopted and adapted a new process (the rammed earth building technique) and then also developed a method of skills development and transfer (by recruiting members of the local community who were trained in the new method and then were able to apply it elsewhere). The computer literacy innovation process was not directly related to the infrastructure innovation process, but it complemented it and was an example of an organisational arrangement.

Innovation actor relationships: system versus network? The spatial nature of the two cases showed some interesting characteristics of innovation processes as both enterprises drew on skills and experiences of organisations and individuals outside of the local environment. The arts and crafts centre made use of imported equipment and skills from overseas and marketed their products both locally and globally, while the foundation drew in a range of organisations from outside the DM – some within KZN, others from Gauteng.

In terms of the institutional environments of the two organisations, both were well resourced – having access to vehicles and internet facilities, as well as basic services, though neither organisation had local access to library or laboratory facilities. Both enterprises (and their innovation processes) are subject to government’s regulatory environment. For the arts and crafts centre, the export of artwork is subject to taxes and levies, while for the foundation, building regulations required them to have their building method accredited before it could be rolled out at local schools.

Some other aspects that emerged from the case studies are that both organisations demonstrated a pattern of continued learning, which exposed them to new products and processes that they then incorporated into their operations. Adoption was in both cases the entry point of most innovation activities. From both cases, it seems that building on existing knowledge and skills enables better absorption and adoption of introduced products and processes. It also appears that having the persons with the new knowledge (for example the volunteers) based within the organisation for a period of time allowed for more effective adoption. This is in line with the view that if there is frequent exposure and interaction with the actors that introduce new knowledge it is likely to lead to

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optimal adoption and positive outcomes. In the case of the arts and crafts centre, bringing different actors together in the same location over an extended period of time proved to be one of the best ways to ensure continuity and proper adoption of introduced knowledge.

It becomes clear that innovation requires collaboration and multiple actors. Across the two cases examples of a range of actors playing different roles can be seen. Furthermore in both cases, rural actors have proven the success of interaction between different actors from different spaces or localities. For example, the opportunity for a German NGO to partner with a rural community in improving local artwork methods has proved a sustained success in the arts and crafts centre. Furthermore, in both cases the collaborations gave rise to adaption of the methods adopted with the aim of improving a particular process. It would appear that rural networks or rural local systems are not always entirely dependent on local government institutions, as they have been able to absorb international knowledge that complements their local knowledge and skills. In addition, the presence of internal capacity might have enabled or resulted in high level adoption of new knowledge, although both relied on external sources of knowledge. The cases also provide an indication that high adoption rates may also require that a local, rural system maintains strong relations with their outside sources of knowledge and information and that they continue adding a variety of knowledge sources into their system to ensure better patterns of learning and sustained innovation.

8 MICRO OR INTERNAL ENVIRONMENT OF THE ENTERPRISES

This section provides a glimpse of the internal organisational environment of public, private and non- profit enterprises in uMzinyathi 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 the enterprises’ ability 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 do 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. In other more remote areas Thusong service centres might be the source of accessing the Internet and online knowledge databases. The study was also interested in where enterprises carried out their innovation activities.

8.1 INNOVATION ENABLING ENVIRONMENT

The internal environment, according to the questionnaire consists of the elements within the organisations, including the services which are available to the enterprises, specifically referring to energy, information and communications technology (ICT) and transport. An understanding of whether or not enterprises experience the legal, policy and regulatory environment as supportive of innovations in the internal organisational environment is also important when making sense of the internal organisational environment. The location of the innovation activity was also given consideration during the study as it directs access to services. Across all enterprises interviewed, the most commonly mentioned places where innovation activities were undertaken are business

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premises/business parks, communities and farmland/fields. When considering the specific types of enterprises, one sees that enterprises that conducted most of their innovation activates in business parks were private businesses (36.96% of the enterprises), followed by public enterprises (24.14% of the enterprises). The highest proportion of innovation conducted by NPOs was on farmland or fields (32.5% of enterprises). This is highly correlated with the nature of the different types of enterprises.

The internal environments of the enterprises are sector specific and each sector explained the source of innovation differently. Given this diversity, it is difficult to discuss each sector specifically but we will make references to similarities and differences where possible. Most enterprises that were interviewed (i.e. they were innovating) explained that they had access to basic facilities such as running water, cell phones and electricity (see Table ). 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.

Table 8.1: Share (%) of enterprises with direct access to resources and facilities for innovation, (N = 115) Facility information Valid Public Private Non-profit observations enterprises (n= enterprises organisations 29) (n= 46) (n= 40) Main place of carrying out innovation activities Farmland or field 18 10.34 4.35 32.5 Business premises 30 24.14 36.96 15 Research centre 6 10.34 0 7.5 Factory/Manufacturing 16 10.34 21.74 7.5 Home 15 0 21.74 12.5 Community/suburb 20 17.24 13.04 22.5 Higher Education institution 4 10.34 2.17 0 Primary or secondary school 6 17.24 0 2.5 Direct access to resources Plumbed running water 98 93.1 91.3 72.5 Flushing toilets 82 89.66 78.26 50 Electricity 100 93.1 93.48 75 Library facilities 45 79.31 28.26 22.5 Science laboratory 12 24.14 4.35 7.5 Computer 71 79.31 60.87 50 Landline 56 68.97 50 32.5 Cell phone 113 100 97.83 97.5 Internet 72 65.52 71.74 50 Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies).

The survey explored the use of ICTs in some depth (see Table ). Cellular telephones were devices to which innovating enterprises commonly had access. For example, 90% of NPOs indicated that they

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had access to cellular phones that could be used to support their innovation activities. Access to landlines was much lower, being greatest in public enterprises (approx. 65% of public enterprises but only 32.5% of NPOs interviewed).

Access to Internet is considered a key mechanism to support innovation – especially where enterprises do not have access to libraries. Access to Internet via computers/tablets was generally the most common practice. Overall, access to Internet was lowest among the NPOs, which is to be expected given that many of the NPOs interviewed were of an informal nature.

Access to Internet facilities was further explored and it was found that access to own connection (either via 3G/Cellular network or via ADSL) was most common. There was limited use being made of Internet facilities at facilities such as Thusong centres, libraries or Internet cafes.

Table 8.2: Share (%) of enterprises using ICTs for innovation and type of ICT by enterprise type, (N=115) ICT device Valid Public Private Non-profit observations enterprises enterprises organisations (n= 29) (n= 46) (n= 40) ICT devices most used for innovation Cellular phone 65 34.48 60.87 67.5 Landline telephone 16 24.14 10.87 10 Both Cell & landline 34 41.38 28.26 22.5 ICT hardware to access internet Computer/Tablet 62 68.97 58.7 37.5 Smart/Cellular phone 8 3.45 6.52 10 Both Computer/Phone T 12 6.9 13.04 10 Means of connecting to internet Own 3G/Cellular network 35 27.59 30.43 32.5 Own Satellite/Microwave 5 0 4.35 7.5 Own ADSL 34 48.28 30.43 15 Thusong Centre/ Library 3 3.45 2.17 2.5 Internet cafe 4 0 8.7 0 Not connected 34 20.69 23.91 42.5 Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies).

8.2 TRAINING AND SKILLS DEVELOPMENT

Another aspect of the internal environment is the skills and training within the enterprises, as these are considered important in the innovation process. The majority of enterprises expressed a need to have the workers trained in order to decrease the amount of supervision required in the day-to-day activities of the enterprises. The emphasis on the need for basic skills training was very clear in the

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responses of the enterprises, with many requesting an improvement in basic skill levels (reading, writing and mathematics) to ensure better innovation in the future.

The skills that are important for innovation were defined as basic educational skills, technical or sector specific skills and professional skills. The most needed skill, in relation to increasing and continuing innovation, are basic skills. Enterprises usually explained that language skills, writing skills and communication skills were crucial to the innovation process. The basic skills were understood by respondents as the key factor in whether or not the business had innovated. Many enterprises expressed a desire to have their workforce trained in order to ensure greater innovation within the specific sectors. The enterprises described that there are particular skills that are essential to the innovation process. These skills are not necessarily sector specific, although there were examples where skills training in specific sector-based activities were mentioned as crucial in to the innovation process, such as a fairly comprehensive understanding of the core knowledge and practices of the sector activities. The majority of skills mentioned by the enterprises were related to interpersonal skills.

In other cases the skills described as important in the innovation process were sector specific. A good example of the latter is a graphic design business whose core functions included printing, graphic design, multimedia and photography. This enterprise had no access to running water, flushing toilets that worked or a functional landline. They claimed to spend money on innovation activities such as new products, improved services and staff training. There were four employees in this enterprise and three had received training in the previous year. This training was explained as having contributed to the workers ‘understanding and operation of the machinery’. As one worker put it: ‘I know which machinery to use for specific jobs’. The respondent indicated that the workers were competent in the workings of the business and required little or no supervision. The skills described as important were design skills and web creation skills. When the sector specific skills are acquired the workers are more inclined to be innovative, by offering up new ideas on how to use machinery differently or devising ways of improving the operations. This kind of response (making reference to worker competency in relation to the skills needed for specific jobs required to continue the enterprise’s core functions) was a common response to the questionnaire. The assumption was that skilled workers have the basic understanding of the enterprises functioning and thus there is more opportunity to engage with activities that may be viewed as innovative. In other instances, where basic skills were mentioned as crucial to the innovation process of the company, it was evident that if the basic skills are not in place, innovation is more difficult to achieve. There was another element to the innovation process that was explained in the answers related to the skills needed for innovation, namely that skills linked to marketing, business management and pricing are crucial for innovation. This may suggest that innovation processes were understood as interwoven with business success and profit making. These skills needs were aimed at economic skills development, which tied into the ambitions of enterprises in the uMzinyathi District to be innovative in order to achieve economic goals; such as improving production to ensure higher income.

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9 MACRO CONTEXT – BROADER INSTITUTIONAL AND REGULATORY ENVIRONMENT

9.1 INTRODUCTION

The extent to which enterprises engage in innovation activities is also influenced by external factors. Institutional support from the state and other actors, including policies geared at supporting innovation in local areas, play a crucial role in influencing innovation activity. Furthermore, innovation networks also contribute significantly to the engagement of enterprises in innovation activities. This section presents quantitative and qualitative evidence of the macro context and the role of other institutions in facilitating the innovation process.

9.2 INSTITUTIONAL AWARENESS AND INFLUENCES

An understanding of whether or not enterprises experienced the legal, policy and regulatory environment as supportive of innovation was also seen to be important when making sense of the internal organisational environment. The majority of enterprises expressed that they viewed the legal, policy and standards regulatory environment as supportive of innovation. With such general satisfaction, it almost seemed as if no change was needed. However, while the respondents suggested that the legal, policy and regulatory environment was supportive, they qualified their response with comments such as ‘the projects and standards should be implemented more effectively’ or ‘processes and regulations could be better applied’. Furthermore, there were a large number of enterprises who did not know about the policies relating to their innovation activities – awareness was greatest among the NPOs and lowest amongst the private sector (see Table 9.1). While there was, overall, a more positive response to the question regarding the awareness of respondents to the availability of state support for innovation, it was not clear whether all differentiated between general enterprise-related support and support specifically for innovation.

While 71 respondents indicated that they were aware of state support for innovation, only 39 indicated that they had actually applied for support (and the NPOs showed the highest incidence of applying for such support). The success rates of these applications are unknown and one is also not sure whether the applications were specifically for support of innovation activities or for more general capital or operational needs.

There has to be a focus on making enterprises aware of this support structure in South Africa, since currently too many enterprises lack the knowledge of the policies and cannot benefit from the support that is on offer. As one respondent said: ‘People should be made more aware of their rights.’ The enterprises explained that if people were made aware of the support structures they would then be able to attempt to make use of the support.

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Table 9.1: Share (%) of enterprises familiar with ST&I state policies by enterprise type, (N=115) Innovation support Valid Public Private Non-profit observations enterprises enterprises organisations (n= 29) (n= 46) (n= 40) Aware of SA ST&I policies Yes 44 65.52 32.61 25 No 71 34.48 67.39 75 Aware of state support for innovation Yes 71 57.14 52.17 77.5 No 43 42.86 47.83 22.5 Applied for state support for innovation Yes 39 37.93 21.74 45 No 71 58.62 71.74 52.5 Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies).

The extent to which enterprises saw themselves as part of an innovation network or system was also investigated (see Table 9.2). From the survey it was found that across all the enterprise types, the majority saw themselves as part of an innovation system that shared resources and knowledge. This was especially the case for public enterprises and NPOs, but less so for private enterprises, where only 67.39% saw themselves as part of an innovation system.

The perceived formality of the innovation systems was also investigated and it was found that the majority saw themselves as formal innovation systems. In terms of the different types of enterprises, public enterprises had the highest proportion of enterprises (93.1%) that identified themselves as being a formal innovation system. NPOs were second highest (82.5% of NPOs), while private enterprises had the least enterprises that identified themselves as being part of a formal innovation system, though their proportion was relatively high as well. The relatively high number of organisations that did not provide an answer possibly indicated a lack of understanding of the concept of an innovation system or network.

The extent to which enterprises saw themselves as part of a mainly local innovation system without wider linkages was investigated. There was a fairly equal spread across and within each enterprise type between those enterprises that saw themselves as part of a local system and those who did not. Again there were a substantial number of enterprises, especially private enterprises that did not indicate either yes or no, possibly because they are not familiar with the concept of innovation systems or networks.

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Table 9.2: Share (%) of enterprises participating in innovation networks and system by enterprise type, (N= 115) Innovation system Valid Public Private Non-profit observation enterprises enterprises organisations (n= 29) (n= 46) (n= 40) Part of innovation system Yes 92 89.66 67.39 87.5 No 23 10.34 32.61 12.5 Type of innovation system Formal 88 93.1 60.87 82.5 Informal 11 3.45 15.22 7.5 System mainly locally based Yes 49 51.72 30.43 50 No 51 44.83 45.65 42.5 Innovation system part of NSI Yes 11 20.69 4.35 7.5 No 4 3.45 2.17 5 Note: Valid observations refer to the number of non-missing values; n = the total number of observations/enterprises (individuals or companies).

With regard to institutional support, two broad categories of enterprises were encountered in the uMzinyathi District. The first category consisted of enterprises that explain that they are not a part of an innovation network (which will be referred to as ‘independent enterprises’). This category was usually made up of enterprises that had innovated successfully without participating in an established or definable innovation network. This category of enterprise was less prevalent than the second category (which are referred to as ‘dependent enterprises’), which were enterprises that received institutional support and associated this support as being a part of an innovation system.

The ‘Independent enterprises’ are important to acknowledge when explaining the institutional support at the local level. The enterprise mentioned above that made the motorised helicopters is a good example of a small enterprise that innovated without any support from an innovation system but rather through an individual engaging with the idea of a new product who found the resources and skills to bring it into fruition unassisted. These ‘independent enterprises’ do not function in isolation from other enterprises and systems - they just function in isolation with regard to their innovation activities.

Regarding the ‘dependent enterprises’ that receive institutional support and associate this support as a part of an innovation system, the innovation system was described as a formal innovation system, but was rarely viewed as a part of the National System of Innovation (generally as a result of the lack of awareness of this system). The formal innovation systems described usually consisted of three broad levels. The first was a description of support structures at a local level; this was understood to include other local enterprises and was directly accessible in the eyes of the enterprises interviewed. One example of institutional support from the local level was an enterprise that assisted in creating

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business plans for new companies. The enterprise provided companies with a full business plan (one hard copy and an electronic copy). In 2011, the enterprise started a transport business by renting trucks and offering to transport goods for companies in the district. This was an innovation that involved the adoption of new products (truck services) to ensure that they could transport goods on behalf of the companies that made use of their business planning services. The enterprise was only made up of three workers, none of whom had had any training in skills development in the last two years. The enterprise had received local support from a construction company and had also merged with another company to ensure that the innovation could come to fruition. Without the input of these local enterprises the innovation would not have been possible.

The second level of support identified was local governmental support from municipalities as well as local line departments (e.g. Department of Agriculture, Department of Trade and Industry). An example of this kind of institutional support was a registered cooperative started in 2011 to farm maize. The enterprise’s innovation involved the adoption of a new product in 2012, when they started using ‘a central pivot system for irrigation’. This irrigation system had been adopted but was unable to function properly due to a failure by Eskom to provide an electricity supply. While government departments (District Municipality and Department of Agriculture) were involved in the dissemination and adoption of the pivot to the co-op, they had not been involved in the actual operation of the system. The issue raised in this case is that innovations are sometimes introduced through programmes of municipalities and government departments without the ability to ensure continued application and success of the innovation in the local context. The lack of comprehensive and integrated service delivery in this case means that the pivot system, an expensive high technology system, stands idle and cannot be used. This is a common weakness.

The third level of institutional support is that provided on a national level. This includes support provided by national research agencies, national development agencies linked to the state or non- governmental development agencies, as well as national private enterprises. The survey found that development agencies were also regionally based and their core function in the uMzinyathi District was the provision of aid to local enterprises. This aid was usually in the form of financial backing, provision of insight and assisting in enterprise growth. A good example of an enterprise that relied on this support was a group focused on preventing AIDS. This was a non-governmental that had its head office situated in Durban. The enterprise adopted a new service in 2012, namely the ‘Voluntary Male Circumcision Mobile Facility’, which was similar to the concept of a mobile clinic. This mobile unit travelled across the district offering safe male circumcisions in a sterile environment. The NGO explained that it was a part of a formal innovation system, but that this system was nationally based rather than local. The NGO collaborated with the Centre for Disease Control, Umvoti Aids Centre and the Department of Health to ensure the service was carried out appropriately in the district. The NGO placed an emphasis on the need for institutional support in initiating the innovation process within the district, i.e. without the institutional support the innovation would not have been carried out in the district.

These three levels may exist but as explained above they are not always proficient and adequate in establishing long term innovative activity within the enterprises that engage with them.

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Furthermore, while these three levels do exist, they are not prerequisites for innovation - they are merely contributors to the process. There are instances where enterprises have innovated successfully without the assistance of institutional support from outside the enterprise.

Another aspect that was raised during the survey was the perceived need for registration of enterprises if they are to receive state support. While a number of informal unregistered enterprises had engaged in innovation activities, there is a general assumption that exists that if further innovation is going to take place within the enterprise it requires proper registration and they can then join the line of enterprises waiting for funding opportunities with regards to innovation. This was a typical response from respondents.

9.3 RURAL INNOVATION SYSTEMS

In uMzinyathi District, which is characterised by high unemployment rates and high levels of poverty, the study found that there is a range of enterprises (public, private and NPOs) that are innovating. Most of these were formally registered, which for many of the less formal enterprises - such as cooperatives - is seen as a mechanism to unlock funding.

Innovating enterprises fall into different economic sectors, but were mainly within the tertiary sector (especially enterprises engaged in community social services), but also agriculture and forestry (within the primary sector) and to a lesser extent manufacturing (secondary sector). Relatively few private enterprises (17%) and NPOs (25%) were found to be part of larger organisations, indicating that they were mainly locally based enterprises – except for the public enterprises, which generally saw themselves as part of a larger organisation (government in general or the specific department under which they fell).

Most enterprises were unfamiliar with the concept of social innovation but could guess that it was about innovation for community upliftment. Also, most were not aware that innovation activities are not limited to completely new things, but can include adoption of existing (but new to the enterprise) technologies/processes, etc.

Innovation in uMzinyathi is undertaken for a variety of reasons, namely subsistence purposes, societal benefit, expanding the frontiers of science - and finally - economic benefit. Economic benefit was mentioned most frequently, followed by innovation for societal benefit (which was greatest amongst public enterprises but also frequent amongst NPOs. Innovation for economic benefit was greatest within private enterprises, but was also seen fairly frequently within NPOs (to improve their own lives or lives of others through income generation).

In terms of the range of innovation activities, most enterprises engaged in adoption and almost none engaged in invention activities. Adaption and diffusion were encountered among fairly similar numbers of enterprises but the incidence was much lower than that of adoption. Thus it is important to recognise and encourage the incorporation of new but existing products, processes, marketing strategies and organisational arrangements. Sometimes adoption was followed by diffusion as the

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enterprise shared its innovation with other actors. Sometimes enterprises adapted or improved a diffused innovation to make it more appropriate for the given context. Adaption mainly related to products and processes rather than organisational arrangements.

Innovation was found to take place in a wide range of settings including business premises, communities, farmlands, within factories and at home – and to a lesser extent within schools, higher education institutes and research centres. This is a key finding as it highlights the need to recognise the innovation that is undertaken by non-conventional actors.

Basic resources such as toilets, running water, electricity and cell phones (many of which are presumably not used for Internet access) were reasonably common among enterprises while access to libraries and science laboratories was relatively low. This means that while enterprises are able to operate – and to innovate to some extent, the exposure to new ideas and the opportunity to invent are fairly limited. Access to Internet via Internet cafes and public facilities was found to be very limited. Skills development was identified as essential for innovation – including both basic skills as well as sector-specific skills.

While DST and other government departments are focusing on innovation as a means of achieving economic development and improved livelihoods, many respondents were not aware of state support for innovation and still fewer had actually applied for state support. They were generally not aware of South Africa’s STI policies.

Innovation networks that share knowledge and innovation systems that provide access to different forms of support are seen as being essential for effective innovation. Most respondents recognised themselves as being part of a formal innovation system, but the spatial limits of the systems varied, with approximately equal respondents indicating that the systems were mainly locally based versus those having wider coverage. There was a very poor understanding of the term ‘national system of innovation’, so people could not respond to the question of whether or not their own innovation system was part of it. This highlights the need for relevant actors to elevate the concept so that it becomes part of people’s vocabulary. Regarding dependence on other organisations, there were those that saw themselves as part of a system and those that indicated that they had innovated independently of other organisations – the latter was less prevalent. And while their innovation activities were independent, the operations of the enterprise did involve other actors. Regarding those enterprises that acknowledged some level of dependence on other organisations, there was still recognition that the support received is not adequate.

Rural innovation systems appear to provide opportunities as a sustainable mechanism for achieving rural development, if supported adequately and coherently.

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10 CONCLUSION AND LESSONS

Rural municipalities such as uMzinyathi are characterised by poverty and unemployment and have to find effective ways to improve livelihoods of the local communities. Livelihood improvements can relate to food security, income generation, stronger social cohesion, improved health and so on. Rural innovation has the potential to lead to these improvements as it allows local enterprises to be responsible for creating change. As an alternative to government officials from various departments seeking opportunities to improve food security or income generation, they can play a role in supporting innovative actions of enterprises and individuals. The RIAT pilot study illustrated that there is already a substantial amount of innovation activity taking place within uMzinyathi, involving public enterprises, private enterprises and NPOs. Although the majority of the enterprises were formally registered, many of these cases were difficult to identify as there has been little attention given to innovation in the past, and even the lists of enterprises held within various organisations are far from complete.

The enterprises that were sampled, which were all characterised by some form of innovation, were found to be mainly within the tertiary service sector (especially community/social services), followed by the primary sector (especially agriculture and forestry), with the secondary sector (including manufacturing) being less prominent.

In terms of innovation activities, invention was found to be very limited across all types of enterprises while adoption was the most prevalent form of innovation, and incidence was highest within the NPOs. Adaption and diffusion were also encountered but not as commonly as adoption. Adaptations are usually made to products and processes with some occasional adaption to organisational arrangements. Diffusion was highest amongst public organisations and lowest amongst private organisations, which is to be expected as public organisations often play a role of supporting enterprises, which could be through diffusion of new products and processes, while private organisations generally innovate to improve their economic performance and thus are less likely to share their innovations with other enterprises as they may lose their competitive advantage.

Most of the enterprises were found to supply goods and services within the local market. Some organisations had the benefit of being part of larger organisations and thus having access to in-house knowledge and skills, but many others were isolated locally-based enterprises without this opportunity. It was clear from the study that the majority of enterprises did, however, recognise that they were part of an innovation system involving other actors though sometimes there were complaints about the service delivery of some of the actors.

Innovation was found to be undertaken for a variety of reasons. A few enterprises were innovating for subsistence purposes, while relatively more – especially public organisations and NPOs - innovated to improve the livelihoods of local communities (i.e. for society wellbeing and welfare). Most prevalent was innovation for direct economic benefit, which was seen mainly within the private enterprises, but also quite commonly within the NPO sector. For the latter, innovation included the

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introduction of new products and processes in some cases and the introduction of new organisational arrangements or marketing strategies in other cases – or combinations thereof.

Recognising and promoting innovative behaviour could have positive outcomes for rural municipalities. The District Municipality could play a greater role in facilitating linkages between potential actors to ensure a stronger network that is better able to support enterprises with their innovation activity. This role of brokering could be key for supporting innovation in uMzinyathi – both knowledge brokering (where the broker provides access to knowledge sources) and brokering of other relationships such as market linkages (Batterink et al, 2010; Klerx et al, 2009).

Since innovation – social innovation in particular – is a focal area of DST and other departments, better understanding needs to be established about related concepts and terminology, while awareness needs to be raised of the supportive policies and programmes of various actors. In addition to creating awareness of these opportunities, many rural based enterprises require support with preparing applications for funding. There is also a need to create a common understanding of the types of activities that can be termed innovation, as many people – including those within organisations that should be supporting innovation – do not recognise that it relates to more than just ‘new technology’. For enterprises to be recognised as innovative and thus be supported, there needs to be a strong campaign to highlight that innovation activities include invention, adoption, adaption as well as diffusion, while innovations comprise products (goods and services), processes, marketing strategies and organisational arrangements. The national innovation system and the various entities that it encompasses (such as the Technology Innovation Agency and the Innovation Fund) need to be highlighted – but the role of less conventional actors that can undertake or support innovation activities also needs to be recognised as part of this system.

While some of the innovations give the innovators a competitive advantage that they would lose if the innovation was diffused to other enterprises, there are some that could be widely shared without impacting negatively on the original innovator and with positive benefits for other enterprises/ communities. In either case, recognition needs to be given to the innovators and where relevant, the intellectual property of the innovators needs to be protected.

Given that the study found very limited incidence of invention, with innovation being dominated by adoption, organisations aiming to achieve rural development need to make some key decisions about the route that they wish to follow in supporting innovation. They either need to accept that enterprises do not have access to the necessary facilities nor the necessary skills to invent and thus focus on supporting adoption – or they need to take steps to provide an enabling environment for invention. The exact nature of the facilities required to support innovation also needs to be given attention. Alternatively, support agents can acknowledge that in general the adoption of new ideas/products/processes/arrangements is within the reach of the majority of enterprises and thus interventions should focus on creating exposure to new knowledge. This could include providing Internet and library facilities or creating linkages with actors that might have ideas (including cross- visits to other communities where relevant innovations exist). Efforts could also be made to encourage innovation within schools and other training institutions – possibly through holding

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competitions for innovations that are most novel, most likely to improve the local community, etc. Future exploration of innovation activities should also recognise that innovation takes place in a range of settings including farmers’ fields, factories, homesteads, etc. It is not limited to research stations, research and development units in big companies, or engineering firms.

Since skills shortages were identified as limiting innovation – including both basic skills as well as sector specific skills, efforts need to be made to address these challenges. Development agencies, schools and FET colleges are some of the institutions that could be actively drawn into the innovation system to strengthen it.

Rural innovation systems appear to provide opportunities as a sustainable mechanism for achieving rural development if supported adequately. Multi-stakeholder platforms are one mechanism for bringing different stakeholders together to support ongoing innovation processes or to think innovatively about possible solutions to challenges that rural communities are facing. Such platforms should be fluid – drawing in relevant actors as the need arises. The key stakeholders within the district need to meet to decide who will take the lead in encouraging and supporting innovation, and how the other actors will be effectively brought in to provide support so that the innovation process can unfold and lead to improvement in the local economy.

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11 REFERENCES

Batterink, Maarten H., Wubben, Emiel F. M., Klerkx, Laurens and Omta (Onno), S. W. F. 2010. 'Orchestrating innovation networks: The case of innovation brokers in the agri-food sector', Entrepreneurship & Regional Development, 22: 1, 47-76. Gault, F. 2010. Innovation strategies for a global economy: Development, implementation, measurement and management. Ottawa, Canada: International Development Research Centre (IDRC). Global Insight (IHS Global Insight Regional eXplorer Data). 2013. South Africa. Accessed: 10 May 2013. http://www.ihsglobalinsight.co.za 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. Klerkx, L., Hall, A. and Leeuwis, C. 2009. Strengthening Agricultural Innovation Capacity: Are Innovation Brokers the Answer? UNU-MERIT Working Paper Series #2009-019. UDM (Umzinyathi District Municipality). 2012. Integrated Development Plan (2012/17), uMzinyathi District Municipality, Accessed 12 May 2013 at http://www.umzinyathi.gov.za/umzinyathi/.

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APPENDIX ONE: RURAL INNOVATION ASSESSMENT TOOLBOX (RIAT) FEEDBACK SESSION TO UMZINYATHI DISTRICT

UMZINYATHI DISTRICT MUNICIPALITY, DUNDEE 14 AUGUST 2013 8:00AM – 1:30PM

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 debate 11:00-12:30 Self-reflection & horizon exploration • How to harness Innovation for development in uMzinyathi? • 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

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OVERVIEW

This was the second 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).

It was attended by six local participants from the district of uMzinyathi. These participants represented private sector, non-profit organisations, and public enterprises, including the district municipality. Five members of the RIAT team attended and facilitated the workshop. The workshop was hosted by the uMzinyathi District Municipality. Due to some communication constraints (clash with another district municipal meeting) and transportation delays the workshop started at 9:15am. Dr. Peter Jacobs chaired the workshop.

1. Welcome and introduction

Dr. Jacobs welcomed everybody and explained the purpose, agenda and process of the workshop, which followed the programme above. Participants completed the attendance register and introduced themselves to the other participants.

2. Ice breaker

To get the participants to think about innovation in their immediate vicinity, Dr. Jacobs asked them to consider two crucial questions:

• Where does innovation fit into the IDP?

Few of the participants felt that the IDP was linked directly to innovation activities or to encouraging innovation, although some awareness and inclusion in the IDP was considered vital. One participant noted that government enterprises are building houses in rural areas but there are no industries or livelihood opportunities nearby or even to which people can travel to and from daily. He suggested that innovation and innovative thinking is required to create economic opportunities to sustain communities and settlements. It was also noted that biogas and recycling opportunities exist but there is a need for innovative thinking about development and interventions, especially with regard to how these ideas can improve local economic development. It was further opined that there was a general lack of innovative thinking in the district and nationally. The solution proposed was that the education system and local schooling needed to be improved so that innovative thinking was encouraged.

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Dr. Jacobs asked the participants: ‘Who should be investing in innovation?’ The response was that innovative thinking and development interventions need to be people driven. Also, it cannot be driven by municipalities alone and must not be politically driven. Local needs must be acknowledged. • ‘What is the connection between innovation and local development? How does innovation lead to development?’

A participant suggested that we need to identify the enquiring minds within the district and must encourage/nurture these thinkers. He added that we must not throw too much money at projects, and should not give project leadership to local traditional and political leaders as they are not always creative and innovative. Rather, there is a need to identify the innovators and to support them.

• RIAT Evaluation Form

Dr. Jacobs then drew the participants’ attention to the evaluation form that was included in their pack of documents. He suggested that during the course of the proceedings people jot down various ideas and thoughts about what they were absorbing and experiencing with regard to the presentation and ensuing discussions.

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

Dr. Jacobs highlighted the origin and purpose of the RIAT pilot study in the four districts and reviewed some of the key concepts and the methodology and sampling frame used with regards to administering the mapping instrument in uMzinyathi 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 is part of the action component of the toolbox. He drew to their attention 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 is vital and was encouraged. These tools are to be further explored and developed in the next phase of RIAT.

4. Q and A session for clarity purposes

After the presentation there was opportunity for questions. It was acknowledged by participants that an earlier question about who had requested the RIAT study and what the purpose thereof is, was answered through the introductory presentation by Dr. Jacobs.

5. Presentation by Ms Hlokoma Mangqalaza

Ms Mangqalaza presented some of the findings from the mapping survey that had taken place in the district during April and May 2013. She presented some background statistics relating to social, economic and human development in the district. A participant asked for clarity about the HDI for uMzinyathi, which is relatively low, and what its purpose is. Dr. Jacobs clarified some of the purposes

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of the HDI, Gini Coefficient and Poverty Measurement Indicators and explained the inconsistencies that are evident in the national and international use of these indices and indicators. Ms Mangqalaza then highlighted the profiles of enterprises interviewed, the innovation activities they were involved in and the types of innovations most common to the enterprises in the sample. In particular the adoption of products (goods and services) was most common. She also noted that around 30% of the respondents had no prior awareness of the term ‘social innovation’ but that despite this there were a number of enterprises (individuals as well as companies) engaged in social innovations, particularly the public sector enterprises and non-profits. She indicated that a larger share of the enterprises sampled is part of the formal knowledge and other resource networks, which are important to the innovation activities of the sampled enterprises.

Private enterprises seem to be the main innovators in the sample, i.e. engaged in at least one innovation activity. The main diffusers of innovations are the public enterprises. Adoption and adaption are the main innovation activities. Invention hardly featured as an innovation activity in the uMzinyathi District.

6. Q and A session for clarity purposes

After the presentation there was opportunity for questions and the following queries/comments were raised by the workshop participants: • It was highlighted that Internet access and connectivity was a constraint in uMzinyathi District. The suggestion made was that possible collaboration between the municipality and TELKOM could ensure that the municipality does not bear the cost but that TELKOM bears the cost. In the long term, TELKOM would reap the rewards as long as the Internet service was affordable and local people had the income to pay for the service. This response again emphasised the need for integrated thinking and collaboration between different actors in the district.

• It was questioned if the government and, particularly, local and district municipalities would actually make use of the data from the reports to guide local development.

• A concern was raised about how the district municipality could move forward with some of the suggestions. It was suggested by a RIAT team member that the current event is considered to be interactive and catalytic but that the outcome of this would depend on the people present and the ability to change old ways of thinking and use the information and ideas presented during the day to transform local and district municipal ways of operating. Innovative strategic thinking and collaboration is crucial.

7. Interactive session by Ms Brigid Letty

This session was facilitated by Ms Letty, with input from the RIAT team. As the group of participants was small, there were no break-away groups during the workshop. Ms Letty started the exploration session by listing several subsectors. From this list the workshop participants identified two areas where they felt that these contributed to LED and required innovation to overcome currently

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experienced challenges. The subsectors identified were ICTs (Internet availability constrained by existence of old telephone lines that cannot provide DSL service) as well as manufacturing (informal manufacturing e.g. bakeries) and construction (challenges in the tender process). She reminded the participants that they should be clear about the stumbling blocks to achieving innovation and when selecting a subsector they should look at innovative ways to overcome the particular stumbling blocks. It was also emphasised that they should bear in mind the following questions when making a decision: What does ‘rural development’ in uMzinyathi mean for you? Which sectors offer opportunities to achieve rural development?

• Group focus area:

The group agreed that informal manufacturing in uMzinyathi was facing significant problems and that innovative interventions were required to maintain, develop and improve this activity within the district. Identified constraints included: market availability; access to materials; water and electricity costs; difficult access to SETA due to distances involved; lack of necessary skills; and a lack of capability and knowledge. It was noted that there was a lack of institutional coordination, within and across institutions, in this subsector including the various municipalities, public and private enterprises and non-profits.

o Examples of innovations: A local ‘Forum for SMMEs’ exists – It facilitates access to information for member SMMEs. This can be described as an organisational arrangement innovation.

To further stimulate discussion about possible innovative activity, a hypothetical example was given by Mr Hart. He suggested that while access to electricity is cited as a constraint to the sector, the situation of reduced electricity availability results in a need to seek alternative energy supplies. So there is need to identify innovative ways to address the challenges of a particular sector, but also more generally.

o Possible innovations to address challenges: Education and training to address lack of capability, but this is a fundamental need for development and requirements for training differ across different manufacturing clusters and types in terms of their specific requirements. It was suggested that the local training centres should consider changing their type and style of training and providing information so that it is more interactive and self-learning is encouraged. Many professional and other bodies (e.g. engineering institutes) have local representation and these could be drawn on to provide assistance and even to present courses and different ideas to local interested parties.

o Who are some of the important local actors and what are their roles? The SMME Forum can draw in local and other actors. As a result, it can then act as a knowledge broker and provide this brokerage service to members or clusters of members as necessary. This would be an example of a local network playing the brokering role.

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Local municipalities and district municipalities have the same KPAs – this is a challenge for accountability when determining who is ultimately responsible for service provision and who should be contacted in the event of a disruption of the service necessary for development as well as innovation. It was highlighted that some differences in services do exist in that the DM is responsible for water and sanitation across the district and the LM is responsible for electricity, refuse and housing, although both are responsible for local economic development.

One of the issues related in relation to the informal marketing sector was the lack of institutional coordination, which was discussed in the group. The district municipalities play a coordinating role for local municipalities (LED platform for example). The question was raised of whether people should approach the LED manager or the municipal services manager when encountering problems – i.e. many are not sure of the chain of command. Also, different departments/units have different visions of what constitutes growth, based on their silo responsibilities.

Suppliers of products and services were also considered to be important sources of new knowledge as long as different suppliers are accessed to ensure that people can make a sound choice regarding the products they wish to adopt.

It was noted that the district municipality could also play a knowledge brokering role. The example was given that SEDA (Small Enterprise Development Agency) and uMzinyathi District Municipality are busy completing the first participant training of the uMzinyathi small construction enterprise incubator programme.

A final question posed at the end of this session was: ‘Who should locally lead the knowledge brokering facilitation process in the district?’ In other words, who should become the main knowledge broker (first point of contact and facilitator) in the district? Should this be the SMME Forum, the District Municipality or the relevant government department (e.g Department of Agriculture addressing an agricultural challenge)? It was pointed out that these enterprises and organisations are often faced with a lack of internal capacity and capability. It was agreed that more detailed exploration of innovative ways to address sectoral challenges would be required for each subsector and the clusters within the subsectors.

Participants noted that this had been a valuable interactive way of tackling a local problem and improving on a recognised existing innovation. The process of exploration was deemed important.

8. Enhancing Rural Innovation Networks/Systems by Dr. Peter Jacobs

Dr. Jacobs then asked the participants if they could respond to the following questions: • Are the concepts presented useful for promoting rural innovation for development?

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o It was agreed by the participants that the concepts were particularly helpful. One of the participants highlighted that the SMME forum was an initiative that seemed a useful innovation that could be replicated elsewhere as it allowed for pooling of knowledge by bringing different actors together. The municipal official suggested that the DM should invest in such fora in other LMs as failure of individuals’ efforts is often due to lack of knowledge and lack of support. The official from Department of Agriculture indicated that their department is currently in the process of setting up Agri forums in collaboration with the Department of Rural Development. • Dr. Jacobs asked the question: ‘Where do we go from this point forward? Should the RIAT team return to the district and try to help with the greater in-depth exploration of innovation in the district in conjunction with the municipality?’ o A positive response was received from the UDM representative, particularly in relation to the concept of forums. He said that support with establishing terms of reference for such a forum would be useful. He highlighted that it would have been good if more officials were at the meetings and undertook to pass the information on to the relevant people. • Evaluation o Participants were asked to complete the evaluation forms and submit them to members of the RIAT team before leaving as the feedback would contribute substantially to the RIAT analysis.

9. Closure by Dr. Peter Jacobs

Dr. Jacobs summarised the morning’s activities and outcomes, highlighting that it had allowed a preliminary investigation of how innovation could address challenges facing key specific sectors. He added that the RIAT team was now leaving the District Municipality to consider how to implement some of the recommendations (i.e. taking innovations from the drawing board into reality).

Dr. Jacobs added that for the DMs that were not part of the pilot, the next phase will be the development of these case studies for selected sectors/subsectors. He offered to make the RIAT team available if the DM could secure the necessary resources. This offer was positively accepted by the DM official at the workshop.

In conclusion, Dr Jacobs reminded the participants about the purpose of the workshop and what he felt had been achieved based on the interactive experience of the group. • RIAT is in the penultimate stage in our ‘innovation assessment’ cycle. • He thanked the district and local municipality representatives for facilitation and cooperation in evidence collection process. • He hoped that the group could now see the value-addition to the district that the RIAT was aiming at. • He hoped that the provision to district municipality stakeholders of the basic findings/results of the survey was useful and indicated that a final report would be submitted to the municipal manager.

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• Finally, he noted that this interactive workshop had been a great help to exploring, with local people, where ‘innovation’ fits into local development activities – i.e. exploring the innovation horizon. • He again emphasised that the session was not about IDP/LED strategic planning but was a process of interactive learning and problem solving on specific issues that might or might not be part of the current IDP but which required innovative intervention and could facilitate greater and effective innovation in the district. He suggested that the outcomes of the RIAT study could feed into the development of the next strategic plan.

Mr Bheki Shangase, the representative from uMzinyathi District Municipality, thanked the RIAT team and workshop participants. Dr. Jacobs confirmed that the final report would be tabled at the municipal manager’s office and the EXCO could then take a decision about how to engage with its contents.

10. Evaluation by participants

Two participants left early but one of these submitted the workshop evaluation form. The responses below are based on the five participants who submitted forms at the end of the workshop. The semi- structured participant’s evaluation form helps local actors to self-reflect on each part of this session in a systematic manner. To keep the identity of respondents confidential, we only present a high- level summary of the feedback.

Background and pre-workshop ideas on innovation

Type of enterprise you represent One person represented an NPO, three represented public enterprises and two represented private enterprises.

What was your understanding of ‘innovation’ before attending this workshop? While these comments indicate that participants were basing their ideas on their own experiences and their key functions within their enterprises, it was clear that newness and benefit to either the company or people more generally were important – and that innovation should be new and add value.

RIAT concepts and information collection methods

Was the presentation on the purpose of RIAT and the conceptual definitions useful to you? All respondents indicated that this session was of benefit. One felt it was of limited value to his current circumstances, while others tended to focus more on how the terms and methods could assist them with their core focus and, in particular, development activities.

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Are you aware of any examples of social innovation that has taken place in the district? Most of the respondents indicated that they were not aware of any social innovations occurring in the district. However, one person provided the example of the Sukuma Sakhe operation which aids in identifying information in the community.

How can the idea of innovation make a valuable contribution to socio-economic development in the district? All respondents felt that the concepts, definitions and practical use of innovation as a focal point in development could offer improvements and new ways of understanding and addressing development requirements. Innovative ways of looking at challenges was not only important but, also, innovations could be used to overcome some of the challenges.

Evidence of ‘innovation’ in the district municipality

Was the presentation on the RIAT pilot findings about innovation activities in the district useful to you? Respondents were of the opinion that the evidence obtained from the RIAT rapid mapping survey instrument was useful. It would have been good if the respondents had identified the contribution that innovations were making to local development (even if some are limited and require further improvement) rather than only focusing on the challenges raised by some of the socio-economic background data that were presented.

What were the key lessons about innovation activities that you consider most important from this presentation? It seems that some fundamental lessons were realised from the session. The ideas of integration and collaboration were raised as important lessons by the participants and it will be important that this realisation transfers across to other actors who were not present. This is especially necessary for those involved in the planning of all facets of development in the district.

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? Unfortunately, the responses are confined to the interactive discussions that took place during the workshop while the team was looking for a broader range of examples beyond what was discussed at the workshop. Essentially, diversity of participants is important here as it would allow a greater understanding of the various areas of local development that could be targeted for further innovation exploration.

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?

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Clearly the respondents have taken home some key ideas, specifically the need for better and perhaps more integrated planning, requiring greater local effort in involving the relevant stakeholders. Also, the realisation that innovations must meet the development requirements – probably based on better identification of what is required and suitable when undertaking the planning process.

Do you consider your attendance at this workshop to have been a valuable use of your time?

The respondents who completed the evaluation form all felt that the process had been valuable. The comments suggest that there was some awareness of self-learning by the participants in terms of new ideas and the fact that these are considered useful. However, the two comments on the steps undertaken to resolve problems (possibly their seeing RIAT as this step) and the focus on the socio- economic circumstances suggest limited focus, despite self-learning about innovation in the area.

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