Intellectual property cases are expected to increase in Africa as competition and distruptive technology become more prevalent — similar to what happened in China, BusinessDayLive reports.
One of the big digital power shifts underway involves large companies now assuming the roles of digital disruptors — roles that until recently were considered the domain of innovative, technology-focused start-ups, according to Evan Pickworth, writing for BusinessDayLive.
Pickworth defines a disruptor as an innovation that requires a company to change the way it does business.
While Africa remains behind the curve on both technological innovation and, as a result, the number of intellectual property cases being taken to its courts, this is changing, Pickworth said. Fights over intellectual property are on the rise, according to global consultancy Accenture’s Tech Vision 2014 report.
From an investor’s perspective, companies that can come up with market-moving technological changes tend to grow faster than their competitors. An investor would be looking for a company to adopt innovations that will attract more companies — which is what drew South Africa’s Naspers to Chinese Internet company Tencent.
Naspers bought a 34-percent stake in Tencent after recognizing its potential in 2001. Tencent led the market for years with popular messaging apps such as WeChat. Competition from Chinese rivals such as Alibaba is forcing it to grow its development capability. It is now beefing up its app distribution channels and has announced a new open platform strategy,
including shopping apps.
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Lee Naik, managing director for technology strategy at South Africa’s Accenture, says mounting pressure to deploy new technology fast is forcing businesses to beef up market insight, innovation and highly specialized skills.
Technological innovation is also resulting in what he calls a “borderless enterprise” — a workforce that extends beyond its employees to “any willing individual connected to the Internet.”
Avior Research Analyst Richard Tessendorf says Naspers or Datatec are among the few local companies able to compete in the global IT space — but they are no Amazon or Google. However he says he sees more local companies leveraging off the innovations of the global operators, which are increasingly focusing on technology such as cloud computing.
“As technology evolves, it brings opportunities, but also more competition,” he said.
A good example of a major enterprise disrupting the local market is South Africa’s First National Bank, which has 8.5-million customers in Africa and India. First National Bank implement more than 8,160 innovations since 2004. It beat all the competition — with Absa its closest competitor — to win the inaugural Accenture Innovation award in 2013.
Adams & Adams intellectual property expert Darren Olivier said competition is growing in Africa with a related increase in intellectual property cases. He is involved in a precedent-setting case in South Africa where Cochrane Steel, maker of the Clearvu invisible fence, wants to stop competitor M-Systems from bidding on its trademark on Google
Adword. Companies can use this method to ensure their names comes up in searches for their competitors, BusinessDayLive reports.
“There is a lot of interest in Africa in particular, like banking and telecoms, where there is a significant and growing technology component, with improved broadband stimulating it,” he said. “It is not unlike other trends throughout world, but Africa is coming off a low base.”
There were more than 87,000 intellectual property cases in China in 2012 — up 46 percent from 2011 — while there were about 100 recorded cases in Africa in 2013, according to Olivier.
He expects this to increase as competition and distruptive technology grow, and companies and economies mature — as has happened in China in recent years.
“There is just as much innovation in Africa, but intellectual property hasn’t really been used to protect market share. However, there is already a greater number of disputes.” He said that as Europe and the U.S. move out of recession, their intellectual property rights are their competitive advantage.
Accenture has broadened the base of its global study to include 68 local companies. In the South African survey, 54 percent of companies said they use mobile apps to reach consumers, but only 23 percent said they had a formal strategy to integrate their mobile apps into the organisation’s core system.
Another concern is that 55 percent of South African companies do not have a security plan, yet transforming to a digital business increases a company’s exposure to risk. “It’s not just about gaining access to systems; cybercriminals are also trying to bring them down,” Naik said.