SADC markets should embrace innovation to remain competitive

Lazarus Sauti

Ian Bessarabia, head of business development for Sub-Saharan Africa at the Society for Worldwide Interbank Financial Telecommunication (SWIFT), says there has been significant growth in Africa’s capital markets over the past decade, but there is still a long way to go before markets reach their full potential and Africans benefit fully from this growth.

This calls for improved technology so that markets can support growth and remain competitive with global peers.

To grow, scale and globalise and make the transition to networked, technology-driven economies, as well as to remain competitive, adds Bessarabia, Southern African Development Community (SADC) markets should, therefore, embrace innovation.

“Innovation is key to economic success, and for SADC markets to remain competitive, business leaders should embrace and continue to grip innovation as a key driver for socio-economic growth,” noted Bessarabia.

Harare based research and development analyst, Masimba Mavhudzi, concurs, saying SADC markets should embrace innovation to reconfigure economies as well as create new markets and opportunities that southern Africa can capitalise on.

“Innovation is a key driver for national and regional socio-economic prosperity. It enhances sustainability and helps markets to produce new products and services that suit different niche or virgin markets. If regional markets are to prosper, they must be innovative enough,” he said.

Speaking at a Zimbabwe New Partnership for African Development (NEPAD) in-Country Training for the Africa Science, Technology and Innovation Indicators (ASTII) Survey Programme in Harare recently, Minister of Higher and Tertiary Education, Science and Technology Development Oppah Muchinguri also said innovation is significant to socio-economic progress, and regional markets should seriously embrace it to regenerate, empower grassroot people for economic transformation as well as to remain competitive.

“The role of innovation as an enabler for economic development cannot be over-emphasised, and if we want to transform our regional markets, we need to embrace innovation. The transformation must also be matched by the availing of both monetary and infrastructure resources,” she said.

Professor Gary Atkinson-Hope, an innovation specialist, also said there is evidence based consensus on the critical role of innovation as the key driver of social and economic development, and the only way markets in Southern Africa will grow is by adopting new ways of operating.

“Markets in Southern Africa must not be wedged in the groove of delivering second-rate products. To change and deliver the kind of first-world products necessarily suitable for the regional market, and to remain highly competitive, they must drive further growth through innovation,” he added.

Atkinson-Hope added: “Innovation opens up markets that have been closed or did not previously exist. It is, thus, a powerful engine for development and for addressing social and global challenges, and it should be centrally located in SADC’s long term economic growth strategy.”

Ade Bajomo of the Nigerian Stock Exchange is also of the view point that innovation is critical not only as a game changer, but because it fundamentally changes the way business is done and brings competitive advantage against peers.

He, therefore, urges SADC markets to innovate so as to remain relevant, competitive as well as to become indicators of the progress southern Africa is making towards improving the quality of life of her citizens.

However, Mavhudzi said since innovation is part and parcel of research and development, SADC governments must invest heavily on science, technology and innovation. He said they can do this via creating strategies and policies that enhances economic development.

“The ability to create policies that enhances economic expansion is innovation. It is from those policies that regional markets get the critical aspect of hands on. Solid, fast looking plans, strategies or policies are therefore required to strengthen SADC’s markets,” Mavhudzi said.

Significantly, Mavhudzi urged regional markets must copy from other countries such as Malaysia, Indonesia and China in building up strategic plans and policies if they are to effectively develop competitive regional markets.

“Countries such as Japan, South Korea, Malaysia, Indonesia and China embraced innovation to solve their problems and develop their markets. Accordingly, SADC markets should use these countries as platforms if they are to successfully embrace innovation and remain competitive,” he noted.

Professor Luke Mumba – Africa Science, Technology and Innovation Indicators programme coordinator at NEPAD, agrees, adding that it is also the mandate of government sectors to craft policies that promote research and development.

He also said governments sectors should target to spend more than 1.5 per cent of Gross Domestic Product (GDP) on research and development.

Sadly, most, if not all, member states have not moved much towards the implementation of the one percent of Gross Domestic Product (GDP) commitment to research and development.

SADC markets, though developing, are still faced with many challenges in both the economic and social domain. These problems, however, require innovative solutions, and if regional markets embrace innovation, they will not only solve various challenges, but develop their niche markets, remain competitive and help southern Africa to achieve her development goals.