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16 October 2017<\/strong>: The World Bank, in the latest evaluation of South Africa\u2019s economy<\/a> published last month, sees enhanced innovation as the lever to break from a vicious cycle of low growth, diminishing productivity and investment, and rising unemployment and poverty. The report emphasises the potential of cities and the vital importance of digital communication. Knowledge transfer is the primary conduit in any innovation system; professional education will be the core process that opens the escape hatch to economic transformation.<\/p>\n The Bank\u2019s economic diagnosis is grim.\u00a0 South Africa\u2019s per capita growth was negative in 2015 and 2016 and average individual incomes have barely grown since 2011.\u00a0 Over the past five years the number of people living on less than R1200 per month has grown by 10% to about 33 million:<\/p>\n \u201cbetween 2008 and 2015, almost 80 percent of South Africa\u2019s population experienced poverty, about half permanently and the other half intermittently\u2019.<\/p><\/blockquote>\n Low growth results in excess capacity, low productivity and poor returns on investment. The Bank\u2019s analysis shows that South Africa\u2019s current productivity levels are significantly lower than before the 2007 financial crash.\u00a0 The underutilisation of our overall manufacturing capacity has increased from 14.5% in 2006 to 18.1% today. Year-on-year levels of fixed investment fell through 2015 and 2015, and fell again in the first half of 2017.<\/p>\n These circumstances result in rising levels of unemployment. Over the last decade an additional 3.5 million people have entered the workforce but only 1.6 million new jobs have been created.\u00a0 Today, close to 6.2 million people are unemployed, half of whom have had no work for the past five years; a further 3 million have stopped looking for work.\u00a0 When the proportions of those still hoping for work and those who have given up are combined, South Africa\u2019s unemployment rate is 36.6%.<\/p>\n Versions of this scenario will be all too familiar; news about South Africa is often negative.\u00a0 But there\u2019s a paradox here; \u00a0the creativity that is frequently encountered across wide fields of practice.\u00a0 In my own work with the UCT Graduate School of Business\u2019s Solution Space<\/a>, I\u2019ve often seen examples of enterprise and entrepreneurship that are contrary to the dominant narrative of decline.\u00a0 Many people have had similar experiences.\u00a0 How can resilient optimism be squared with evidence of chronic and sustained decline?<\/p>\n Innovation.\u00a0\u00a0 The World Bank defines innovation as \u201cthe introduction of new-to-the-world and new-to-the-firm goods, services, business practices, and organizational methods\u201d. In the Bank\u2019s view, innovation in South Africa has the potential to boost productivity in existing industries as well as promoting diversification in new manufacturing and service sectors, accelerating the creation of new jobs and conferring competitive advantages.<\/p>\n Enhancing innovation should be a priory for government policy making and also for established manufacturing and service sectors, which currently invest an unusually low proportion of their turnover on research and development. But given the high proportion of South Africa\u2019s population who are unemployed and economically marginalised, what is more interest is the evidence for nascent innovation in low income communities.\u00a0 The World Bank\u2019s report gives several examples.\u00a0 Here are two of my own, stemming from the Solution Space at our campus in Philippi<\/a>, one of Cape Town\u2019s townships.<\/p>\n Sibusiso Nyamakazi’s passion is music, and he\u2019s set up a recording studio in Philippi<\/a>, one of the poorest parts of the city. He knows the originality and energy that has long driven South Africa\u2019s music industry and his ambition for his project knows no national boundaries. Here he talks about his work and ambitions:<\/p>\n