12 December 2018

Key Components of Innovation Financing

Key Components of Innovation Financing
Kaveto Tjatjara from Worldview Technology pitching his affordable, sustainable sanitation solution, The Nest, a toilet that works without water or chemicals.

During the first SAIS 2 Innovation Fund Call for Proposals,  the SAIS 2 PMO was inundated  with queries regarding  the direct funding for individual start-ups. These queries come at a time when there is a need to provide sustainable interventions to supporting entrepreneurship in the region.  Thus, the SAIS 2 programme  is designed specifically to strengthen the local innovation ecosystems within the SADC region which are focused on early-stage entrepreneurs. The scope of the second phase of SAIS is primarily in supporting start-ups and entrepreneurs by strengthening the local and regional ecosystems which comprise of organisations working towards consolidating these efforts. 

Innovation Support Organisations

The SAIS 2 Innovation Fund works through support organisations by  providing grants to projects that seek to pilot, demonstrate and replicate existing concepts and prototypes before rolling out to the markets as new or improved products, service and processes. With this specific funding, the objective is to support entrepreneurship and entrepreneurial operations at local level and also to increase  the cooperation of innovation actors. Another objective is to gain practical understanding of the ecosystems in the targeted markets.

The  type of organisations  best placed to assist aspiring entrepreneurs in  the SADC region are innovation support organisations such as tech hubs, labs and technology transfer offices. These organisations already operate within the  local innovation ecosystems and  have extensive experience working with entrepreneurs. They  also  act as multipliers, making connections between various role-players ranging from investors to trainers in their local networks. It is rewarding to tell the story of local startups that emerge and flourish in a community where collaborators and competitors can operate as a network while mutually reinforcing chances of every organisation to achieve shared goals.

Innovations and Inventions

There’s a growing awareness of how the innovation process is changing from closed and linear to open and iterative. Digitization provides new opportunities for non-traditional innovators such as coders, technologists and citizens across the African continent. The opportunities to enter the innovators landscape have increased as there’s also an emerging connection between innovation ecosystems and systemic innovations, for example, mobile money or  the invention of the electric car. It is critical to identify and to open up opportunities for entrepreneurs to participate in these value chains that establish the baselines for service economies of future. 

Financing Entrepreneurship

Further to this, access to finance at different stages of an enterprise’s lifespan has a great impact on its survival. Local business angels and venture capitalists are needed in a same way as government incentives or supportive regulation that protects and encourages private ownership. Equally important is the availability of the services such as mentors, designers, legal advisors and working spaces to provide critical knowledge-intensive support to entrepreneurs. Finally, it is commonly noted that enterprises seldom triumph because of cleverness of one individual. Introduction an innovation to the market where clients are ready to pay requires a variety of skills such as marketing, it requires finance and  most importantly passion. Often it is a team with the right combination  of skills that can be found behind a successful start-up. The innovator may not even be the entrepreneur who will take the idea to the market as a product or service.