Digital innovation is causing disruption to traditional business models and business leaders need to move fast to deliver new platforms and applications to meet customer needs.
Companies that do business the old fashioned way risk losing their clients and those that don't innovate will certainly die. This is according to Rory Moore, Innovation Lead at Accenture.
Businesses now operate in a space where the rules have changed dramatically and they need to identify how technology can create new value. Those businesses that embrace the new space and identify innovation opportunities will achieve an advantage over their competition.
Moore says technology is an enabler for business growth by allowing businesses to quickly capitalise on opportunities. "There has been a marked decline in the ability of traditional levers of production—capital investment and labour—to propel economic growth.”
“Technology, and specifically Artificial Intelligence, is a new factor of production and has the potential to introduce new sources of growth, changing how work is done and reinforcing the role of people to drive growth in business,” he explains.
“There is no in between, only those who embrace technology and those who don’t. If you haven't already embraced technology, you risk missing the bus," he adds.
A 'wait and see' approach is risky because in the digital economy, speed counts. Consumers expect products and services to be instantly available through whatever channel they choose.
New competitors are springing up from unrelated industries or low-cost, technology-powered digital business models. These competitors apply a different mind-set and path to seize market share and turn the value chain of an established company, or even an industry, on its head.
From a national perspective, Moore points to the “multiplier effect”, where each new high-tech job creates an estimated five additional indirect jobs. "An unprecedented redistribution of jobs, population, and wealth is happening and it’s likely to accelerate in the decades to come. Uber wasn't around three years ago, it has put many out of work but has at the same created many new jobs."
The rise of jobs in the innovation sector is phenomenal and whenever a country produces an innovation or innovative employer, like a high tech employer or some other type of employer that generates innovation, it gains jobs.
Economist and author of The New Geography of Jobs, Enrico Moretti, states that with only a fraction of the jobs, the innovation sector generates a disproportionate number of additional local jobs and therefore profoundly shapes the local economy.
According to Moretti, this healthy traded sector benefits the local economy directly, as it generates well-paid jobs, and indirectly as it creates additional jobs in the non-traded sector. What is truly remarkable, he adds, is that this indirect effect of the local economy is much larger than the direct effect.
More importantly, it is not only the employees of that hi-tech company, but many more jobs are created in the local service sectors that are supported by the jobs created. This is called the multiplier factor.
Moore says each additional job in a high tech company in a local community creates about five additional jobs outside high-tech in that community. “These could include doctors, dentists, taxi drivers, lawyers and hairdressers.”
“South Africa needs to augment our focus on Black Industrialists with the development of Black Technologists. On-boarding more local experts, for example, needs to become a priority – as opposed to outsourcing this type of work," he stresses.
Innovation is a term that wasn’t heard much in South African boardrooms a decade ago, but today it is seen as a key solution to creating growth and jobs.
He says South Africa needs to embrace innovation-driven change as in countries such as Singapore, Japan and India.
"Innovation has flourished in many emerging environments around the world, regardless of the composition of their populations and the divide between rich and poor. We need to start competing with these emerging markets in the new technology spaces," Moore concludes.
Rory Moore is the Innovation Lead at Accenture.