Transitioning to a knowledge economy requires expanding those sectors of the economy doing knowledge work by finding ways to scale existing businesses with the capacity and experience to be able to compete.
Successfully scaling up and out necessitates moving from selling time to selling value. Many businesses in the knowledge economy start by selling time and many have been very successful at that. South Africa, for example, competes very effectively in the global call centre industry by selling hours to big corporates.
One only becomes exponentially scalable, however, when they sell less time for each unit of value you create. That means developing intangible products like licensed, ready-packaged solutions that can be sold many times over.
In the creative industries, clients used to want to own a solution outright. But why not co-create a solution that works for more than just a single-use and why not allow the producers to find other clients and use-cases to leverage and grow a digital product?
This new business model requires longer-term thinking and even greater levels of trust, but there's a significant upside.
Cost savings from scale and predictability are just the beginning; the real magic lies in the added value. Corporates can multiply enterprise supplier development spend, companies get annuity income (with all the benefits for scale that come with that) and we can apply any enhancements to benefit the whole system of users.
The key here is using skills to develop a complete business solution, embodied in a set of processes, tools, apps or experiences that don't depend on one being present when value is exchanged.
Pieter de Villiers, co-founder and CEO of Clickatell, quoted from the book called Crossing the Chasm
by Geoffrey A. Moore. In a nutshell, Moore says that selling to early adopters isn't enough — they are simply buying your passion and the newness of the product or technology.
Instead, Moore says that we must find ways to sell to the early majority. They are the ones who will help entrench your business; what they're looking for is a complete business solution.
For example, virtual reality is sexy and exciting, but in some ways, it's a technology looking for a problem. If we start by asking the question, 'What total business solution could we create using our VR skills?', the products and services we shape from there should add massive value and appeal to the early majority.
There are very definitely VR use-cases that make sense right now and corporates should be actively looking to support local solutions. Why buy something from overseas in hard currency when there are good news stories to create locally? By crafting total solutions, we can drive down risk for the early majority, deliver predictably and potentially scale something for a global market.
The key as always is to listen to your customers. Often they don't have the time, risk appetite or budgets to do what they need to, especially when it comes to truly engaging digital solutions. Yet one must see their recurring needs.
If we can invest 'below the waterline' in terms of underlying tech, platforms, tools and full experiences to make our solutions quicker and cheaper to deliver, then the underlying intellectual property will belong to us and all of our clients will benefit too.
If we stress-test them here in South Africa, with all its inherent infrastructure challenges, we will have potentially world-class digital products to distribute globally.
To compete internationally though, we first need to overcome some very real local challenges. We need simple, well-written policies and laws that support our knowledge economy to compete globally, rather than tie us up in uncertainty and, frankly, sometimes incoherent rhetoric.
If we hope to scale and create jobs in South Africa and then compete in the global creative economy, the support of the government is critical. In the long run, everyone benefits.
And South African companies can create knowledge products among the best out there, there really can be no time like now for us to all get very serious about how to do this together.
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