The Need for Innovation
Developing nations with unique features
like large market size and growth rate, access to regional markets and skilled/cheap
labour, have a lot to offer. Asides serving as consumer nations and probably manufacturing
centres due to relatively cheaper labour, the earnings of these nations would
be greatly increased when they begin to add a certain level of originality to
their products.
For such nations, their global
competitiveness can be greatly increased when it is difficult to find
alternatives for their products and services without violating proprietary
rights. In many of Nigeria’s industrial sectors, finding originality would be
the next step after achieving an effective manufacturing capacity and the firms
that would solve this riddle would be the kings of the future.
The nation of India, for example, has
achieved tremendous feats in becoming one of the manufacturing hubs of the world.
She has, however, not particularly done well in the area of increasing
home-grown innovation contribution. This shallowness would be the bane of
developing nations that rely more on assembling and manufacturing
(rent-seeking) led industrialisation without commensurate increase in innovative
capacity.
This concern is justifiable because,
though manufacturing and assembling is a great place to start as it opens up
the nation to direct foreign investment, the demands for the product of such
industries can change with changes in the technological, political and economic
landscape. This was the case with some South Asian nations like Vietnam and Malaysia
when the multinational companies moved to more promising India and China. The
future of a nation’s economy is more assured when they’re the ones creating the
products of the future and not just the place to mass produce them.
In this respect, Nigeria though far
from achieving sufficient manufacturing and assembling capacity can create a
system of innovation that could help her lead the future in a post-industrial
knowledge based economy. One major likely advantage is that unlike India, China
and other South Asian countries that built their economies around rent
provision for Multi-National Companies, Nigeria may not suffer the inertia that
such institutional paradigms creates. It could be easier to build a
knowledge-based industry from the scratch than to transform a purely
mass-production paradigm to an innovation hub.
Innovation, however, does not just come
about. According to the founder of modern management, Peter F. Drucker, it is a
product of a cold-eyed commitment to the source of innovation; it demands
deliberate inquiry and organisation.
What really is
innovation?
Innovation is the means by which entrepreneurs
either create
new wealth-producing resources or endow
existing resources
with enhanced potential for creating wealth - Peter Drucker
Innovation is the profitable implementation of
strategic creativity
- Elaine Dundon
National Innovation Systems
The term “National Innovation Systems”
is used to describe the set of complex processes of interactions between
private and public actor-institutions that are involved in the development,
transmission, modification and commercialisation of new knowledge and
technology within a nation. It is a process-based concept that seeks to
evaluate the innovative capacity of a nation from the standpoint of the
processes that lead to innovation.
The Innovation system approach is a
deviation from the linear approach that evaluates inputs rather than processes
and linkages. Before the concept of National Innovation Systems became common,
a Nation like Nigeria could assess her commitment to developing new
technologies and enterprise by measuring the amount of funds committed to
research and development in both the public and private sector: the number of
publications from her academic institution, the number of postgraduate
qualifications and also by the amount and ease of access to R & D funding
by the Industry.
The linear approach assumes that as
long as researchers engage in research activities and government provide the
right incentives that someday, the spark would happen. This has not been found
to be true; experience has shown that the level of interaction between the
actors plays a more important part. Like a chemical reaction, Innovation
requires some raw materials to happen but catalysts are often required to
reduce the barriers to change and ensure that useful outcomes emerge. Hence,
the emphasis should be on the quality of the linkages and not just the quantity
of inputs. Also, the demands for the outcomes of this chemical reaction should
be sustained so as to ensure a self-sustaining reaction.
It is observed that certain localities
happen to have a relatively higher level of innovative capacity. In these
regions, nations or parts of a nation, the amount of inputs and the degree of
interaction required for innovation to happen has been achieved and sustained.
This is seen in the notable trend towards the creation of specialised knowledge centres near leading
universities that are oriented towards research and development on particular
technologies.
The Silicon Valley in California (near
Stanford University and the University of California), a biotechnology cluster
in the Boston area (near the Massachusetts Institute of Technology) and a
communications cluster in New Jersey (near Princeton University and the former
Bell Laboratories) are examples of such innovation-clusters in the United
States of America.
In these clusters, we can say that a
self-sustaining reaction has been achieved as high levels of technical
collaboration, technology diffusion and personnel mobility within these sectors
has contributed to the improved innovative capacity of enterprises in terms of
products, patents and productivity.
Nigeria’s National Pharmaceutical Innovation System
Within the Nigerian Pharmaceutical
Industry, for example, the actor-institutions include the pharmaceutical
companies, academia, public pharmaceutical research institutions, clinical
research centres, technology transfer offices, government, financial
institutions, media, and knowledge management consultancy firms.
Fig. 1 Schematic Representation of National Innovation Systems
The concept of National Innovation
Systems is based on the premise that provided there are sufficient inputs from
the actor institutions like increase in Research and Development funding,
increased access to finance, technology transfers and adequate government
policy and regulation. The focus should be on aligning the interests of these
actors and decreasing barriers that militate against such interactions.
These interactions could be in the form
of industry-sponsored research collaborations, contracts, research industry
forums and technology prizes.
An examination of the level and
efficiency of the interaction between these actors would provide valuable
insight on the state of the Nigerian Innovation System. The quantity and
quality of the interactions between actor-institutions in this industry could
be evaluated along these lines:
1.
Interactions
among enterprises, primarily joint research activities and other technical
collaborations.
2.
Interactions
among enterprises, universities and public research institutes, including joint
research, co-patenting, co-publications and more informal linkages.
3.
Diffusion
of knowledge and technology to enterprises, including industry adoption rates
for new technologies and diffusion through machinery and equipment; and
4.
Personnel
mobility, focusing on the movement of technical personnel within and between
the public and private sectors.
From my experience in the knowledge
management Industry, the actor-institutions within the Nigerian pharmaceutical
ecosystem have achieved a certain level of development sufficient to be active
participants in sustainable innovative systems. The missing link, I believe, is
the deliberate commitment to processes that ensure sufficient and effective
interactions. This will demand conscious steps to remove the traditional
barriers that impede these interactions.
In other industries, the actor
institutions may not have been well developed and the development of such
institutions is the first place to start. A major Industry of concern is the
agricultural sector which is in dire need of innovative strategies. Besides the
development of innovative products and processes, a major area that requires
innovation is in management. The need for management innovation is very much
needed across the actor-institutions to ensure quality linkages.
Areas for Innovation
The challenge is therefore three-fold:
a. To create value (product and service innovation)
b. To offer value (process innovation)
c. To sustain the offering (management innovation)
Let’s consider a software developer who
has completed a demo for an enterprise information system that would be of
great help to a particular segment of the manufacturing industry. The software
developer has succeeded in creating a solution. His work must have been helped
by the things he learnt at the university (actor-institution). The strategy for
offering that solution to the market in a way that assures maximum
profitability for him is often of more significance than the solution itself.
Assume that he would need additional financing (another actor) to be able to
get his solution across to the market (as a company most likely) that needs his
software. How can he negotiate to obtain this finance, reach his market and
still maintain considerable ownership of the proceeds of his invention? The
strategy that answers these questions is often an innovation in itself.
The processes that would help this
innovator create, modify, own, transmit and sustain the provision of his
innovation demands a lot of linkages across different institutions like:
Academia, Private firms, Intellectual property offices, trademarks, financial institution
(debt or equity) and the government who regulates the business arena.
Definitions
Product innovation is the development
of new products or services with enhanced value or the addition of greater
value to old products or services. Google, Facebook, iPod, iPad and BlackBerry
are product innovations.
Process innovation is exemplified by
Michael Dell’s direct sales marketing of computers, e-bay’s online sales of
virtually everything and Apple’s iTunes application that sold single tracks rather
than the conventional CD album. These firms did not develop new products or
services; rather, they developed new and better processes for doing the same
things.
Management innovation was what happened
with the development of the Franchise system for business expansion. It is seen
in the management style at Apple Computers. At Onel Consults Ltd, a business
development consultancy firm in Nigeria, the management system is such that
allows a horizontal leadership structure and an ownership structure for
employees.
Venture financing and public limited
liability companies are more or less a system of management innovation.
The challenge therefore is to allow
each actor to understand their roles within this system and maximise their
contribution by achieving effective interaction.
WHY NATIONAL INNOVATION SYSTEMS?
Some of the many reasons for this
overwhelming need for such relationships include:
1.
The application of knowledge is the value expanding factor for all
resources.
2.
Global competitiveness and mass scale production has placed a huge
demand for greater productiveness.
3.
Economic activities have become increasingly knowledge-intensive.
4.
In today’s world, the determinants of success
of enterprises, and of national
economies as a whole, are increasingly more
dependent
on
their
effectiveness in gathering and utilising
knowledge – whether
they be in the private
sector, public sector
or academia.
5.
Knowledge is domiciled in people, proprietary documents and
institutional systems.
6.
The increasing cost of developing new products and services requires
effective collaboration.
Given the relatively different
paradigms that exists within the industry, government, research institution and
the myriad of other concerns that relate to intellectual property management;
actor-institutions that promote interaction within the national innovation system
would have a great role to play in achieving a sustainable innovation system
within the Nigerian industrial sectors.
As shown above, at the heart of the
National Innovation System is the innovative firm which must find within the
myriad of actors; processes and strategies that would result in the profitable
development of new products and services. The role of the government would be
to stimulate greater inputs across the participating actor-institutions and
reduce barriers to interaction.
The Nigerian Science, Technology and
Innovation Policy document that was released of late has these words as the
statement of commitment from the president, Goodluck Ebele Jonathan.
”We are going to
run our economy based on Science and Technology….because there is nowhere in
this World now that you can move your economy without science and technology.
For the next 4 years we will emphasize so much on S&T because we have no
choice, without that we are just dreaming….”
The President is very much correct;
towing the path of innovation is no longer the characteristic high sounding
ideals of beady eyed researchers or is it restricted to corporate vision
statements hung on the wall to massage the ego of executives and perhaps
impress shareholders. Driving innovation in today’s global knowledge economy is
basically a question of survival.
For many Nigerian industries, it could
decide who would be here ten years from now.
References
1. Drucker, P.F. (2003). The Discipline of Innovation.
In Best of HBR, The Innovative Enterprise, Harvard Business Review, EBSCO
Publishing.
2.
Federal Republic of Nigeria, (2011). Science, Technology and Innovation
(STI) Policy, September, 2011.
3.
Okwonna, N. (2012). The Heart and Art of Innovation, Onel Media
Services, Lagos, Nigeria
4. Organisation for Economic
Co-Operation And Development. 1996. National Innovation Systems, 1996.
5. Rajan, Y. S. (2012). ‘Shaping
the National Innovation System - The Indian Perspective.’ The Global Innovation
Index 2012, Chapter 7, p. 131-141
