With “fierce” pressure to innovate, technology, media and telecoms (TMT) companies in South Africa need to create an environment that can anticipate and eradicate innovation hurdles, professional services firm PwC said on Wednesday.
In a new report, ‘Clearing the innovation hurdles: How leading TMT businesses overcome barriers to make innovation happen’, the firm explained that the most innovative 20% of TMT companies surveyed anticipated the hurdles to innovation by focusing on “areas of differentiation”.
The survey findings, which included responses from 374 executives of TMT companies across 20 countries, showed that leading innovators succeeded by identifying and taking action on six key areas that could “set their companies apart” from the competition, commented PwC partner for advisory services Elmo Hildebrand.
These included visionary leadership, instilling an open culture, attracting talent, initiating collaboration and partnerships, building the right metrics and ensuring higher investment and use of innovation subsidies and tax incentives.
However, there was “no single right way” to innovate, he said, adding that executives needed to decide on the company’s approach to innovation.
“It is more about having a well-defined strategy accompanied by the relevant resources and infrastructure to eliminate the hurdles.”
The survey found that the most innovative 20% of TMT companies invested over 1.5 times more in innovation than others.
“Investment is only one part of the process, however, as efficient use of funding is a crucial next step.
“Further, locating and using financial innovation incentives such as tax holidays and research and development relief, can also help achieve greater innovation,” Hildebrand pointed out.
He added that multinational TMT organisations were operating in one of the most complex tax environments in history.
“Managing a global innovation portfolio requires executives, now more than ever before, to consider the tax implications of their innovation decisions at an earlier stage of business planning.”
Further, innovators were found to collaborate more frequently with a wider spectrum of partners, with the most innovative companies co-creating over 36% of their products and services with external partners.
The least innovative companies were found to co-create about 8% of their products.
The surveyed executives also revealed that, of most importance to fostering an innovative culture, was offering employees the opportunity to participate in high-profile innovation initiatives.
“By fostering a culture of innovation, using their resources and budget wisely, TMT companies can become the innovation leaders of tomorrow,” Hildebrand stated.