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Innovation in High-Technology SMMEs: The Case of the New Media Sector in Cape Town

An Erratum to this article was published on 22 March 2013

Abstract

Creative industries are increasingly attracting the interest of academics and policymakers around the world. Policy enthusiasm is also directed in many countries towards developing knowledge-intensive or high-technology sectors. The new media sector is considered an innovative growth sector which holds potential for emerging countries. This case study examines innovation in new media firms situated in Cape Town. Theoretically, creative industries are linked to post-industrial and knowledge-based economies and the growth of services, and innovation in high-technology small and medium enterprises is also considered. This paper provides micro data regarding the innovation activities of new media firms based on purposive interviews. The study found that these firms are dynamic in terms of technological innovation. However, their innovation activities tend to be incremental and localised. Furthermore, various barriers limit their innovation enhancement and growth prospects. Public policy can support new media firms in terms of access to new business development funding and programmes supporting small enterprise innovation, improved design education and network opportunities.

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Notes

  1. Non-technological innovation includes incremental improvements on existing products and processes and changes in product design, marketing, business practises and workplace organisation (OECD 2010a).Examples are new services, new organisational structures, new business practises and new marketing channels.

  2. The authors acknowledge that this approach has various shortcomings and implications. However, a detailed discussion of these falls outside the scope of this paper. See a recent paper by Booyens (2012) in this regard.

  3. Similar approaches were followed by Handke (2007), Miles and Green (2008) and Muller et al. (2008) who used the standard concepts and definitions of the Oslo Manual (OECD 2005) as a starting point to survey innovation in creative industries. Handke (2007) specifically used CIS type questions and adapted these to concepts that are familiar to the creative firms surveyed, as was also the approach of this study.

  4. Multimedia firms were excluded if the majority of their business was not related to new media. Firms with the following services were excluded since it did not fit the definition: online sales, e-commerce, business portals, webhosting, IT programming, film production, above and below the line advertising.

  5. As a result of creative urban renewal in Woodstock the area is experiencing intensifying gentrification which has resulted in the displacement and economic exclusion of former residents. See Booyens (2012).

  6. This is not unusual: Evans (2009) indicates that creative firms often show much faster growth than other sectors of the economy even though these sectors remain very small in absolute terms.

  7. Also see Joffe and Newton 2009 who also indicate that there is a need for technical skills development in the creative industries.

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Acknowledgments

The authors would like to thank the Human Science Research Council for the baseline funding allocation that made this study possible. They wish to thank the respondents for their participation and the reviewers for their useful recommendations. Thanks also to Aeysha Semaar for assisting with the fieldwork, Johann Booyens for creating one of the graphics and Wendy Job at the University of Johannesburg for creating the map. Special thanks to Professor Christian Rogerson for his invaluable comments on an earlier version of this paper. A version of this paper was presented at the Globelics Conference in Buenos Aires, 15–17 November 2011.

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Correspondence to Irma Booyens.

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Booyens, I., Molotja, N. & Phiri, M.Z. Innovation in High-Technology SMMEs: The Case of the New Media Sector in Cape Town. Urban Forum 24, 289–306 (2013). https://doi.org/10.1007/s12132-012-9168-7

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Keywords

  • Creative industries
  • New media
  • Technological innovation
  • Small and medium enterprises
  • Networks