Abstract
Background: Small and medium-sized enterprises (SMEs) play a significant role in job creation and bridging the widening gap between the rich and the poor in South Africa. Several factors determine the success of SMEs. One largely-overlooked factor is innovation capacity, which is made up of different capabilities. Aim: The aim of this study is to investigate the degree of innovation capacity in South African consulting engineering firms and to identify the differences in the innovation capabilities across firm size. Setting: The target population for the study was consulting engineering firms operating in South Africa. Methods: The study followed a quantitative methodology. The survey was distributed using an email invitation to participate in the study, which contained a link to access the questionnaire online. Results: The results show that South African engineering consulting firms reported an ‘average’ to ‘high’ innovation capacity, where medium and large-sized firms performed similarly, and small firms lagged. The study found that there exists a significant hierarchy in performance for entrepreneurial capabilities, risk management capabilities and capabilities for market and customer knowledge: larger firms reported a higher scoring than smaller firms. It also found that small firms sharply lagged behind medium and large-sized firms regarding risk management capabilities and capabilities for market and customer knowledge. Conclusion: The results intend to assist policymakers in prioritising lagging capabilities as the point of departure for capability-building efforts. In addition, the results should assist entrepreneurs in being mindful of the potential blind spots that could be hindering growth.
Highlights
Since 2008, the construction industry has contributed approximately 9% to gross domestic product and 9% to formal and informal employment in South Africa (Construction Industry Development Board 2015:2)
Composite score for innovation capacity Composite scores were calculated for overall innovation capacity by calculating the average scores of innovation capabilities, which are sub-dimensions of innovation capacity (Table 1)
The results indicate that innovation capacity scored a mean of 3.655 on a five-point rating scale of innovation capabilities
Summary
Since 2008, the construction industry has contributed approximately 9% to gross domestic product and 9% to formal and informal employment in South Africa (Construction Industry Development Board 2015:2). Small and medium-sized enterprises that grow have been considered as key contributors to job creation, poverty alleviation, equity and participation, wealth creation and social stability (Nieman & Pretorius 2004:3; Olawale & Garwe 2010:729) These small, medium and micro-sized enterprises (SMMEs) have a considerable positive effect on South Africa’s sustainable economic growth (Nieman & Pretorius 2004:3; Olawale & Garwe 2010:729). This positive impact stems from the fact that SMMEs increase stability within society, lead to a rise in personal savings, encourage prosperity in rural communities and increase the public’s degree of economic participation (Cronje, du Toit & Motlatla in Chimucheka 2013:784). One largely-overlooked factor is innovation capacity, which is made up of different capabilities
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