CHAPTER 4: RESULTS
4.5 P HASE 3 OF THE STUDY
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major challenge. Relating to this theme were: What particular aspects of capacity building does the mobile application development SME require? SMEs appear to have been established based on the business owners’ deep technical understanding of their product and associated technologies.
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commercialisation of the opportunity hinders innovation from the SME. Further elaboration on the concept of sustainability as it relates to innovation is needed by highlighting the stages of development of an idea through to commercialisation and how the environment impacts on the ability of the technology entrepreneur to survive and thrive.
4.5.4 What are the expected functions of the development agency?
The following themes were confirmed in the focused interview to be all-inclusive of the functions of the development agency as they address the start-up, environment and on-going concern of the SME, namely:
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Table 4.3: Confirmed themes of the functions of the development agency Strategic Support Promote
Opportunity
Capacity Building Growth and Sustainability
The SME must be given access to all support mechanisms that are available via state interventions and policies. Advice on, for example, funding support for
cooperatives needs to be promoted to the SME.
The development agency must assist the SME to understand what aid is available from government and other private sources.
The rise in BEE score- card points for
enterprise development should help the SME.
The danger, however, is for the corporate simply to become compliant without any meaningful enterprise development. The concern is the changes in payment terms as a factor assisting with corporate enterprise development for BEE scorecard points, is going to harm the SME.
There appears to be an over-glamorisation of the entrepreneurial
experience based on the role models within the IT sector by way of Steve Jobs, etc. The
development agency must sketch the true, gritty reality of
entrepreneurship. It is not about a "get quick rich scheme” but more about sustainability.
The aspect of access to these support services could also be further studied – the mechanisms used by all support agencies to provide the support, and the ease of access of support measures.
There is a strong link between the profile of the entrepreneur and the business opportunity being converted into a successful venture. The SME tends to be too product focused and not focused on the
application of the solution.
The capacity building should not be a generic, one-size-fits- all approach. It must fit the exact need of the SME. The aim should be to temper the entrepreneur’s enthusiasm with appropriate business skills.
The journey of the SME’s sustainability is not a
“paint by numbers”
process that has a clear and well-defined process.
SMEs are diverse and so are their needs so there is no simple “input–process–
output” model. The life of the SME is far more complex than that. The key is to fit the individual entrepreneur’s technical skill with the business skill to ensure success.
Also important is to analyse the effectiveness of support measures using very specific metrics, as opposed to the reporting that public support agencies provide.
The higher education institution could act as a resourceful
development agency for the mobile application development SME. It could assist with curriculum, innovation, technology transfer, research and development, marketing, legal assistance, etc. Higher education institutions should prepare entrepreneurs while studying on potential opportunities within the technology sector by way of case studies.
The development agency must provide the soft skills development in transforming the entrepreneur from mobile application developer to competent business person within the innovation space.
The development agency should play a role but not serve as a crutch that will be to the detriment of the SME. The SME must graduate beyond the
The SME must choose the right business model for the mobile
application. The “free”
application is very popular as opposed to
“paid for” applications.
The entrepreneur has to
All said and done, it requires a multi-faceted approach to build this person into a
successful
entrepreneur to seize the opportunities within this sector.
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development agency’s support.
understand that the competitor is international and not only local and regional as in many other SME sectors.
The challenge is to protect the intellectual property of the SME.
The fact that the SME has the technical solution does not matter as much as the fact that payment happens at the execution of the solution. This is where the SME often loses out. The one who eventually executes it, receives the money.
The product is vulnerable and the SME needs protection for copyright and patenting of the mobile application.
The SME needs help in getting the “big
brothers” to support small business.
The development agency should assist the SME with operational expenses which drain the entrepreneur. State and corporate pay outs take too long for SMEs and many of them have ceased to exist by the time they receive payment and/or funding.
The SME also needs support from the “big customer” (not competitor) as doing business with corporates can influence the cash flow when payment is delayed or protracted.
There is a sense that corporates tend to bully SMES and arrogant. The development agency will have to provide legal assistance for the SME to counter undue pressures from the
“big customer”.
The benefit of
collaboration lies in the fact that the mobile application requires specialised skills, so content specialists are not necessarily good developers or good designers. The complete value chain of mobile application development consists of a variety of specialists.
4.5.5 Categories resulting from the focused interview representing the SMEs in the innovation sector:
The following categories of the way in which SMEs in this sector conduct their business manifested from the focused interview:
• Business Model
The SMEs appear to have a vague understanding of their business functions and value chain and how their businesses expect to generate income.
• Business Opportunity
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The SMEs appear to have a need to be assisted with a suitable or constructive opportunity to generate income for the business.
• Technology Platform
The SMEs appear to have adopted a base to create their products and services that supports their existing needs. This technological base delivers their products without their having to establish a new process/technology themselves.
• Market Trends
The SMEs appear to be following the general direction, inclination or preference in which their industry is moving. They therefore lean towards being followers of their industry rather than leaders.
• Product Expertise
The SMEs appear to have been established based on the business owners’
deep technical understanding of their product and associated technologies.
• Service Expertise
The SMEs appear to be operating based on the business owners’
understanding and experience acquired prior to establishing the business.
4.5.6 Responses to the framework of the focused interview
In attempting to understand this synergistic relationship, it is essential to understand what the nature of disruptive innovation is and whether this is indeed a common term used by industry or development agencies. It appears that disruptive innovation is not a common term used by either industry or development agencies as stakeholders in the business development space.
It is important to understand what the dimensions of business model innovation are as understood by industry and development agencies. It appears that there does not appear to be a huge appetite for innovation within South African businesses. It is agreed that this is not a desirable state and change imperatives need to be unpacked to resolve this condition of technology adoption to technology innovation.
The development agency has an important role to play in assisting with the sustainability of SMEs in this sector. It appears that higher education institutions should also understand their importance as a development agency in the innovation space because a strong focus on research and development is essential for the sustainability of the entrepreneur.
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In interrogating the mobile application development application landscape, it is important to understand what the key constructs are. It appears that South African businesses are followers and they benchmark to a minimum standard of global compliance. Consequently, these businesses are not really innovators but
implementers of technology. The role players are playing with all technologies that are available. They are not sensitive to national boundaries and are willing to do business at a continental level if required. They are playing first and foremost for money but also for personal needs and interests.