Start-up companies must not be confused with small and medium-sized enterprises (SMEs), highlighted Co-Open Innovation (COOi) Studios director Sandiso Sibisi at the South African National Space Agency’s recent second Space for National Development Conference, in Pretoria. She explained that there was a difference between startups and SMEs. Startups created new products, new services and new markets. SMEs did not do all these things.
There were thousands of SMEs in South Africa, but only hundreds of startups. And in the area of artificial intelligence (AI), the country had only about ten startups. “We’ve got a real deficit of startups in the country,” she reported. A big problem for local startups was the country’s ‘education gap’ – the poor quality of much of the education system, including at tertiary level.
Access to data was another issue. South Africa had to sort out its telecommunications spectrum to release wavelengths for data transmission.
Further, the local private sector remained limited in terms of its diversity. And, for startups, there was a problem in scaling up their activities. There was a lack of venture capital investors in the country willing to back startups.
Until the country solved these problems, it was going to stay an adopter of technologies. And South Africa could not take a leading position in the Fourth Industrial Revolution (4IR), unless it established the proper foundations first – “building up from the ground”.
Innovations that were not used by people are not innovations, she warned, and “[y]ou can’t be good at everything!”
Regarding SMEs, in the space sector, South African companies in this category were competitive because of their lower overheads, pointed out Pinkmatter Solutions Earth Observation solutions manager Nicolas Steenkamp at the same conference.
Local space SMEs had two main sources of origin. Many had been set up by older, experienced industry veterans. The others had been created by new, younger entrants into the sector. Regardless of background, space SMEs always had to upskill and relearn, to keep pace with advances in technology. Consequently, funding was important for space SMEs.
Increased automation and the introduction of AI also benefited SMEs. Cloud-based solutions meant that SMEs did not have to invest in servers.
These developments allowed SMEs to establish and expand their positions in value chains. They also allowed long-term engagements with projects and international engagements. SMEs could further carry out derisking for clients.
For government, SMEs could provide all sorts of ‘value add’. An example would be analysing Earth observation images to provide real-time fire warnings (this was being done).
Regarding AI, this allowed the creation of applications such as ‘vehicle’ tracking (whether those vehicles were cars, ships or planes), the detection and classification of buildings and structures, and the identification of encroachment by informal settlements on, for example, mine properties. “New niche markets are constantly evolving,” highlighted Steenkamp.
COOi Studios describes itself as an open innovation studio. It aids large businesses and startups to come together, and helps big businesses adopt solutions that have been developed by startups for their problems or challenges. It also provides courses for managers in understanding the latest 4IR technologies and can provide technology ‘experiences’ for companies using a pop-up studio. It is currently active in the consumer and retail, financial services, health and mining sectors.
Pinkmatter Solutions is an Earth observation software company specialising in the development of information extraction algorithms and software for satellite ground stations. It also supplies automated Earth observation imagery processing and visualisation services. These included encroachment detection, flood and fire monitoring, high-resolution elevation models and vegetation analysis.