Wesley Diphoko, Online Editor,Business Report (02 June 2017)
According to the Global Innovation Index on Innovation, South Africa is ranked No 97 in Innovation. The index measures the innovation performance of 127 economies.

There are couple of contributing factors to the state of innovation in South Africa and one of them is related to the nature of education and the lack of innovation culture across the board.

Although South Africa spends the largest percentage of its budget on education the return on investment is not the same.

To improve innovation, there’s a need to pay an over zealous attention to the nature of education and support for innovation culture. The view that South Africa is the toughest place to be an innovator has led some to wonder, what can be done to make it an innovation nation.

There are numerous interventions required to make South Africa a Tech innovation and start-up nation. Education is one such intervention and another is the creation of a tech-innovation special economic zone.

No form of skills

A matriculant in South Africa spends 12 years or more at school, but walks out of school with no form of skills or ability to earn a living. The same is true for university graduates, who in some instances spend five years in an academic institution and walk out with no form of practical experience to be useful in the economy.

Academics would argue that academic institutions are not designed to enable people to be economically active. This is the reason why South Africa is not yet an innovation nation. Education institutions are not designed to develop innovative and economically active citizens.

There’s a need to create a training institution for start-ups where candidates walk in with a business idea and walk out with an operational business. Such a school can develop entrepreneurs at a young age (school going age). Instead of granting bursaries, such an institution would have to fund its graduates to start businesses.

Educators in such an institution would have to be drawn from entrepreneurs and experienced business people. With valuable insights they can be more useful in preparing young entrepreneurs to run their own businesses.

Entrepreneurs and venture capitalists can be the first group of investors into graduate businesses instead of traditional financial institutions. Each year the start-up school can develop 100 or more entrepreneurs with new businesses that can also form part of mentorship programme to future students.

Once graduated these start-ups need to be located in what I would call Innovation-Free Economic Zones.

In the start-up world it’s a known fact that in the first three years a start-up is likely to die due to challenges associated with starting a business in South Africa.

To protect great innovations from disappearing due to government red tape and start-up challenges a dedicated safe environment is required. Technology-Free Economic Zones can become such environments where innovators' products and services can be allowed to flourish, where regulation such as licences and taxes can be relaxed until the start-up is ready to enter the real economy.

These zones would be like Special Economic Zones, geographically designated areas of a country set aside for specifically targeted economic activities, supported through special arrangements and systems that are often different from those that apply in the rest of the country.

This approach could be applied to a company like Uber by locating it initially in a Free Economic Zone and allowing it to operate, without requiring it to follow similar processes for taxi operators. Once its economical impact had been demonstrated and the concept proved it would then enter the broader economy and be subject to taxation and legislation.

Many innovations have died due  to tough hurdles that innovators have had to overcome in order to be acceptable. One comes to mind by the founder of Iyeza Express, a medicine delivery (by bicycle in townships) concept by Sizwe Nzima. He was prevented from running the business because he was not licensed to deliver medicine. Where is Iyeza Express today?

The Infonomist will work towards documenting these innovators to ensure that they do not die because they are too advanced for current rules.

In South Africa we face abnormally high unemployment rates. Such a challenge calls for a different approach. Current methods are not working.

Wesley Diphoko is the Online Editor for Business Report and head of Independent Media’s Digital Lab.