One of the country’s prominent innovation specialists urged local universities to form partnerships with existing incubators rather than incurring the costs involved with setting up their own. Dr McLean Sibanda (below left), Managing Director of Bigen Global Limited, is the much-respected author of Nuts & Bolts: Strengthening Africa’s Innovation and Entrepreneurship Ecosystems.
He was speaking at the EDHE Executive Leadership Workshop (#ELW) 2021 – themed Entrepreneurship at Universities – convened by Universities South Africa (USAf) through the EDHE Programme, and in partnership with the Department of Higher Education and Training (DHET), the British Council and Stellenbosch University.
“My big question is whether universities should set up their own incubators. My view is that if there is a functioning incubator in your area, align with and support it so you don’t get into the overheads involved in a new structure.”
He also issued a warning to universities: “Be aware of the fallacy of ‘build it and they will come’. I have seen some universities wanting to set up their own Science Parks, their own incubators. I’ve also seen this in terms of infrastructure, and of businesses that do not have a well-defined market. “We need to focus on demand-led innovations,” Dr Sibanda urged.
To this end, The African Continent of Free Trade Agreement provided insights on the challenges we faced as a continent, and helped universities focus on the kind of research that should be done. “It doesn’t mean that all the research we do has to be applied; there is room for basic, fundamental research. But, more and more relevance is required of academia.”
The public sector provides ample opportunity to serve
Talking to an audience of mainly deputy vice chancellors and senior executives involved in entrepreneurship at public institutions, he said that being part of the public sector, part of the governing machinery is “an incredible opportunity to serve, to make a mark that may live on in eternity and to lay the course for future development for others to build on. “It is a once-in-a-lifetime opportunity to make a difference to people who might not thank you personally. It is a calling and privilege to be serving our people and future generations.”
Having been responsible for repositioning the Innovation Hub Science Park, in Gauteng, where he was CEO for over seven and a half years, he shared the lessons he learnt along the way– and how those can be translated into growing Africa’s economy and innovation system.
He discovered that despite it being a Science Park, the organisation had no one with a science, engineering or technical background. He brought on board subject matter experts, looked at national and provisional sectors of importance and identified green economy as well as smart industry or ICTs.
“We turned the innovation hub from a Science Park in Pretoria to an innovation agency in Gauteng province that had 10 sites in the townships called eKasiLabs, micro innovation centres that offered the same kind of services as offered in the Pretoria hub.” They also set up an incubator in Braamfontein, Maxum Digital, in partnership with Wits.
Why innovation and entrepreneurship matter
Dr Sibanda said: “In my book, I talk about the importance of innovation and entrepreneurship culture. Since the theme is the Entrepreneurial University, what is our understanding of innovation, and entrepreneurship? And, why do they matter? Why do we need to build ecosystems around that?”
Quoting another author, Steven Johnson who wrote: “Innovation does not come only from incentives; it comes from creating environments where ideas can connect,” Dr Sibanda asked DVCs : “What kind of environment do you have at your university? Is it one that allows academics and researchers to connect? Is it one that is not so bureaucratic that to get a licence agreement approved, it has to go all the way to council – and takes six months to a year?
“Is it an environment where we are empowering our transfer officers to be able to make the right decisions because we trust they are acting in the best interests of everyone?”
He used South Korea as an example of an Asian Tiger country with aspirations to turn around its largely agricultural economy. In 1950, Korea was poorer than Mozambique. To become big players in the electronics and the automotive sector, they increased investment in research and development and the acquisition of intellectual property and technologies from elsewhere in the world. They revamped their education system to talk to the skills that they would require in the future.
With the Korean case in mind, Dr Sibanda said: “Being entrepreneurial universities, we should ask if we are doing research that helps to reposition our country and continent. Does this research enable the objectives of the African Continental Free trade area?” He described entrepreneurship as being about building the future, including the uncertainty. Explaining this, he said: “Start-ups are created to operate in uncertainty. They drive ideas that are risky but that have opportunities.
“Ecosystems are important. We can’t operate as islands. Issues like access to finance, access to market – all need to be able to fuel and function in these ecosystems.”
How Asian Tiger countries thrive
He went on to name Korean companies like Samsung, Kia and LG, that were started in the 1950s and 1960s, but were empowered by the innovation and technology.
His next point was to distinguish between invention and innovation, with the former being about generating new ideas while the latter concerned itself with translating the invention into something useful to society – that makes a difference in the marketplace. Next, he asked universities: “What are we focusing on? Ideas that lead to inventions, and therefore the filing of a lot of patents? These are not necessarily useful to society.
“We should be focusing on innovation – things that are new, useful and often surprising to society.” He recommended a book, The Prosperity Paradox: How Innovation can Lift Nations Out Of Poverty by Clayton Christensen, Efosa Ojomo and Karen Dillon. “In it, the authors define innovation as the change in the process through which an organisation transforms labour, capital, materials and information into products and services of greater value.”
The book, he says, distinguishes between three forms of innovation: efficiency, sustaining and market creating innovation. He recommended that universities focus on the last category, where research and development leads to market creating innovations that capitalise on non-consumption. These concentrate on creating new markets. “As universities we need to encourage students and researchers to think entrepreneurially – they don’t need to be entrepreneurs themselves.
“In my book I go into the three characteristics of an entrepreneur: value adding and value producing activity and setting of an individual goal. These processes pull together different resources and material and combine them to generate value for the customer.
“I also say why incubation is important, because ideas often come out raw.
When we repositioned the incubation hub, we began with eight companies. By the time I left in 2018 there were over 400 start-ups being incubated.”
Incubation, Dr Sibanda stressed, is about equipping and driving an idea towards sustainability. He described pre-incubation as a period that allowed entrepreneurs to get access to market, and the actual incubation programme where the main driver is profitability. “It is important to determine what support to provide; how to allocate mentors; what type of training to give and how to connect entrepreneurs to markets.
“When talking research and innovation, universities need to ask: Who is the customer? Which are the industries driving this? How do we connect and enable through competitiveness?”
Competitions in the incubator phase are key
During his time at the Innovation Hub, they found a way to use competitions as a means to incentivise and celebrate entrepreneurship and innovation in the province. This saw the birth of GAP, the Gauteng Accelerator Programme which is a set of competitions to boost the pipeline of companies supported in its programmes. “We realised we cannot do it on our own and so we partnered with universities and business schools and companies to drive the pipeline in Gauteng.
“We structured the prize: a small cash component with the largest part of the prize going to seed funding. Part of the prize was being incubated in one of our incubators.”
Dr Sibanda said there was no lack of funding. However, he added, available funding was often misplaced, and, in certain cases, controlled by people who’d never built a business or understood how to fund start-ups. “I had come from TIA, from the innovation fund. We had been working with universities, with SMEs and start-ups – but the gap remained because the processes were too long.
“It takes about nine to 12 months to get funded. Innovation doesn’t know those time lines; things move very quickly. And so we put together an instrument called the Start-Up Support Programme and this provided small amounts of funding (R250 000 to R1-m).”
Dr Sibanda added that funding is critical to prove an idea. “By the time I left, we’d gone down to R50 000 because we realised that certain entrepreneurs needed to fail quickly. Failure is part of the journey.”
Important lessons shared in concluding remarks
“If universities want to set up such funds it is important that the decision-making is very quick. In our case, we brought on board people who were entrepreneurial but we also brought in other funders to sit on the investment committee and provide a bridge to other sources of funding.”
Dr Sibanda made these points:
- Africa has a youthful population – 70% under the age of 35. This means there is a market for available goods and services.
- The growing need for infrastructure, housing etc are opportunities to find ways to service that demand.
- The growth of mega cities on the continent creates challenges (Nairobi or Lagos highways, inequalities here and on the continent) that can be addressed through innovation and entrepreneurship.
- AfriLabs (and other) reports demonstrate the capital going into the continent. These are the hubs that are growing and it is important for universities not to reinvent the wheel, but to look at partnering with existing hubs while influencing what these hubs are focused on.
ELW 2021 was the third workshop of this kind in the EDHE programme. First held in 2019, the Executive Leadership Workshop initially explored the notion of the entrepreneurial university. The 2020 round, delivered in the format of a design thinking workshop, explored adopting a systems thinking process in devising solutions for entrepreneurship systems within public universities.
Out of this year’s round of the ELW, the EDHE Programme was looking to achieve:
- Shared understanding on the characteristics of entrepreneurial universities in the South African context;
- Equipping and strengthening the DVCs to promote entrepreneurship at their universities and engage in institutional entrepreneurship policy development work as relevant to their contexts;
- DVCs’ clear understanding of their role as executive leaders at their university; and, ultimately,
- An increased number of universities with entrepreneurship development policies.
Charmain Naidoo is a contract writer for Universities South Africa.