In the article below, Marissa Naidoo, Knowledge Transfer Manager for South Africa at Innovate UK KTN Global Alliance Africa, look at why businesses need to look to innovation partnerships to weather the economic storm.

Like poor market conditions, the issue of business sustainability is not a new concept in the boardroom. However, the idea has undergone significant changes in scope, scale and definition in recent years.

Over the past two decades, strategies around business sustainability have evolved, moving from a narrow focus on revenue growth and maximising profit, to a broader view that recognises a business’s personal success as intrinsically linked to that of the greater economy, society and environment (what is more commonly referred to as Environmental, Social & Governance – or ESG for short).

But while public sentiment around ESG has grown – and as world leaders gather in Davos this month to reaffirm their commitment to “building better businesses” – leaders of enterprise have a tendency to revert back to old ways.

ALSO READ: It’s Time to Demystify Intellectual Property in Kenyan Innovation

According to a survey of Chief Executives and Financial Officers at some of the world’s largest companies, investments for improved sustainability and reduced environmental impact are often among the first and most likely to be cut by companies feeling the pinch in hard times.

Before we relegate all business executives as reprobates, it is worthwhile pointing out that this is not always the case and that many have found other ways to maintain the delicate balance between the interests of the company and the world around them – and more often than not, it involves a concept known as ‘open innovation’.

A close relative of ‘corporate innovation’, open innovation is the practice of sourcing new and innovative ideas from a variety of internal and external sources.

Whereas corporate innovation is a more closed-off process, the latter is quickly becoming a popular method for larger organisations, who – due to legacy systems and processes – are often unable to develop novel solutions to ongoing challenges in a way that short- to medium-term sustainability demands.

Instead of the secrecy and siloed mentality of traditional corporate research and development, open innovation fast-tracks problem-solving by inviting a wider pool of people, knowledge and resources to participate.

So, if the benefits of open innovation are clear, why are more corporates in South Africa not undertaking the process? The answer is relatively simple – they do not know how.

To explain this, it is worthwhile noting that the concept of open innovation has only been around since the early-2000s, emerging in the United States after the University of California, Berkley, professor and Silicon Valley veteran, Henry Chesbrough, first coined the term in his paper on ‘Open Innovation: The New Imperative for Creating and Profiting from Technology’. With everything from Starbucks to Circle K taking decades to travel across the Atlantic, it should come as no surprise that open innovation remains a relatively unknown and underexplored channel for South African executives.

However, it is also worthwhile pointing out that South African enterprises do not need to struggle alone in the dark in this regard (although loadshedding may still be a factor).

By its very nature, open innovation is a collaborative process and business leaders should therefore look to organisations well-versed in fostering innovation partnerships, to help them navigate the uncertainty that can come with the development of new intellectual property, or the sharing of potentially sensitive information with outsiders.

This has been the approach of many large corporations across South Africa and the continent, including Rand Water, Flamingo Horticulture, and Unilever.

Representing a diverse range of industries, these organisations have recently partnered with Innovate UK KTN, as part of the Global Alliance Africa project, which brokers open innovation partnerships between companies in South Africa, Kenya, Nigeria and the UK. After just a few months, these case studies are already bearing exciting results.

One of the world’s leading growers and suppliers of fresh produce, Flamingo Horticulture is locked in an ongoing battle against the False Codling Moth – a major pest of commercial farmers in Kenya that inflicts substantial financial losses every year.

Eager to introduce new methods for the identification and removal of the species, Flamingo Group International collaborated with Innovate UK KTN to run an ‘Innovation Exchange’ (iX) Challenge.

After several weeks of scouting, they formalised a relationship with Petiole, which developed an app to assist farm workers to efficiently detect moths and support their extraction. Flamingo Group International’s CSR & Sustainability Consultant, Martin de la Harpe, commented that: “Farmers in the region know that the False Codling Moth is a real challenge with real consequences for producers. Open innovation gave us access to a new set of resources and was a great opportunity to develop sustainable partnerships which we would not usually have access to.”

In an effort to reduce the amount of plastic waste produced by its products, Unilever partnered with Innovate UK KTN  to identify new business models for the sale, consumption and disposal of its detergents. Through this process, they are now prototyping various product ‘re-use & re-fill’ station models for rural communities and are piloting a digital passport to track plastic packaging across the value chain, to ensure that all waste is properly processed, recycled, and accounted for.

They are on their way to finding solutions that are not only sustainable but also more affordable, locally made and better for consumers.

A most recent example can be found in Rand Water – the largest bulk water utility in Africa – which is currently working with Global Alliance Africa to find new ways of treating water residue amid droughts and water shortages in the Gauteng province. When asked to comment on the value that Rand Water sees in open innovation, the company’s Manager for Innovation and New Technologies, Mogan Padayachee, expressed that: “Businesses cannot expect to be impervious to outside forces, so they should also not expect to manage these forces independently. External collaboration is now a reality and demonstrates to be a profitable risk worth taking.”

Padayachee’s comment is most apt. The relevance of open innovation in the context of South Africa’s current socio-economic and environmental climate cannot – and should not – be ignored. In circumstances like these, where perceptions around the market are bleak, it is easy for enterprises to focus on their bottom line and defer notions of ESG to a “time better suited for long-term objectives.” But with the impact of climate change, poverty, and unemployment demonstrating that we now operate in an economy based on creating shared-value, and with avenues to open innovation ready and waiting at the boardroom door, 2023 should not be business as is often usual.

To apply to the Rand Water innovation challenges, go here.

The Challenge is designed to help multinational consumer goods companise find inventive solutions and innovative approaches towards the development of new circular business models for plastic reuse and refill. 

With her idea for refillable detergent packaging set to revolutionise plastic waste management in rural communities, Rapetswa will now receive £25,000 in milestone-based seed funding, along with training and mentorship, to help develop her solution.

Despite growing calls for sustainable consumption, only 3% of rural households in South Africa actively recycle their waste, with many instead resorting to the practice of refuse burning. Yet, this comes as South Africa also has a weak and strained waste management system, with 35% of households not receiving weekly waste collection and a further 29% of households not having any waste collected at all.

To address this issue and help the world-leading manufacturer of household goods reduce its plastic usage by 100,000 tonnes, Unilever partnered with Global Alliance Africa to host an Innovation Exchange Challenge, which sought to explore how reuse and refill packaging could be adopted to reduce the amount of waste produced by households in rural communities.

Businesses, organisations, and individuals from across South Africa were invited to submit proposals, with the challenge generating a number of responses. After much deliberation by a team of industry and environmental experts, Sharon Rapetswa, the founder of Triple Shine Detergent Solutions, was selected as the winner. 

Founded in 2016, the company has developed a new line of refillable plastic packaging for Unilever’s bleach, detergent, and fabric softener products.

The idea, says Rapetswa, came about during her research into waste management practices in rural communities: “Across the country, the same line of plastic products was being disposed of by rural households on a monthly basis. But due to the lack of proper waste management services, recycling was an unavailable option. I realised that, to help these communities consume more sustainably, we needed to tap into the existing reuse and refill culture that has been practiced for years.”

By winning the challenge, Rapetswa will now receive £25,000 in milestone-based seed funding, along with training and mentorship, to help develop her solution.

“As a global company leading the way in creating a cleaner future, we are very keen to do all we can to reduce single use plastic in South Africa and we’re excited to be working with Sharon to develop her ideas and create sustainable solutions for our home care products that can build up local businesses based in some of the country’s most vulnerable communities,” adds Judisha Naidoo, Homecare R&D Director for Unilever.

Commenting on the significance of this Innovation Exchange Challenge, Marisa Naidoo, Knowledge Transfer Manager South Africa at Global Alliance Africa at Global Alliance Africa, concludes: “A large part of our mission is to connect change-makers at all levels of industry and society, so that we can co-create inclusive solutions to a sustainable future. To that end, we’re incredibly grateful for the opportunity to partner with Unilever, to help them take an active role in transforming the future of the consumer goods industry.”