At the SA Innovation Summit held in Cape Town in September 2021, much of the discussion centred on the promotion of entrepreneurship, specifically technology-fuelled and based entrepreneurship, funding of start-up ventures and the important role of incubators and business accelerators.
Technology-based start-up companies are typically driven by the founders’ passion for and undaunting belief in the new product they have come up with, convinced that it is going to the world by storm if not become the next unicorn with billions in revenue – and that sooner rather than later large multinational tech companies will be courting them to sell the new company, that they will all become zillionaires and go on to become serial entrepreneurs who create ever increasing wealth (for society, their stakeholders and themselves).
An interesting question to contemplate is how a start-up can compete at all with large multinationals in a swiftly evolving and very competitive environment? After all, large companies have significant resources, including deep pockets, R&D capacity and experience with product development and marketing as well as access to international markets. On the face of it, these are formidable competitive advantages. Yet many start-ups seem to outgrow their teething challenges and totally disrupt mature markets and sectors formally dominated by “mature leaders”. Are those start-ups just lucky or is there a “theory” that can underpin a winning technology-based start-up’s product strategy? Are there lessons for budding technology entrepreneurs?
The discipline of innovation management, often considered to be an integral part or technology management and engineering management, indeed provides a solid foundation. The first step is to understand the dynamics of technological change and the “laws” that govern technologies’ birth, growth and demise.
All companies (or for that matter the entire spectrum of players from citizens to countries) rely on technology to a lesser or greater extent in order to conduct their business, as do their suppliers, customers, distributors, partners and competitors. Furthermore, all technologies continuously change and evolve. Some in a gentle and incremental manner and others swiftly and abruptly in a radical or even disruptive way. The combination of these two thrusts imply that the dynamics of technological change present a strategic business risk to all companies. The ‘strategic innovation risk’ is indeed opportunity and threat at the same time.
Technological disruption essentially entails confronting the market with a new and better solution to “the problem to solved and the job to be done”, typically with an innovative business model underpinned by a combination of emerging technologies. History has taught us that many mature companies – including leaders in their field – very often do not have the ability, capability, resolve, foresight or agility to embrace the new order of things. Once significant momentum has been built up, it is difficult to unlearn all the things past success was built on, and learn new skills at the same time. It is not surprising that many erstwhile successful incumbent companies follow their obsolete technologies into obscurity. The start-ups, on the other hand, have no legacy hurdles to overcome, and focus all their energy on developing new applications for the new technologies.
Growing a promising technology-based start-up into a successful and flourishing enterprise is, however, not easy and certainly not a given. A range of skills is required, including an understanding of the dynamics of technological change and the management of technology and innovation. Which is why Stellenbosch University has launched an exciting new Masters Degree in Engineering Management (MEM). It is a modern hybrid online degree positioned to benefit early to mid-career engineers and scientists who have a passion to “shape the future”.
Prof Calie Pistorius is an extraordinary professor of Engineering Management in the Department of Industrial Engineering at the University of Stellenbosch. He is also the Director of DeltaHedron Ltd, a UK-based consultancy specialising in the management of innovation and technology intelligence to assess the strategic business impact, risks, opportunities and threats presented by the dynamics of technological change and emerging technologies.
He is a former Vice-Chancellor and Principal of the University of Pretoria in South Africa, where he was also the Director of the Institute for Technological Innovation and a former Chairman of the National Advisory Council on Innovation (NACI), as well as a former Vice-Chancellor of the University of Hull in the UK.
He holds BSc(Eng) and BEng(Hons) degrees in electronics engineering from the University of Pretoria, MS and PhD degrees in electrical engineering from the Ohio State University, an SM degree in the management of technology from the Massachusetts Institute of Technology and a Certificate in Quantitative Risk Management as well as being an alumnus of Harvard Business School. He is registered as a Chartered Engineer in the UK and is a Fellow of the Institution of Engineering and Technology (IET), South African Academy of Engineering (SAAE), Royal Society of South Africa (RSSAf) and the South African Institute of Electrical Engineers (SAIEE); Senior Member of the Institute of Electrical and Electronics Engineers (IEEE) and a member of the Academy of Science of South Africa (ASSAf).