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INNovatIoN StrategIeS for agrICuLturaL reSILIeNCe: a dyNaMIC CaPaBILItIeS aPProaCh to INNovatIoN durINg the CovId-19 PaNdeMIC IN South afrICa
Buchana,y
Centre for Science, Technology and Innovation Indicators (CeSTII),
Human Sciences Research Council (HSRC)
@drbuchana
*Correspondence: Ybuchana@hsrc.ac.za
abstract
This study integrates the concepts of innovation strategies and dynamic capabilities as an analytical framework to investigate the innovation strategies agricultural businesses employed during the Covid-19 pandemic. The study assesses how these strategies influenced their resilience and innovation performance. Using data from the South African Agricultural Business Innovation Survey (AgriBIS 2019-2021), the study combined explorative data analysis techniques with an ordinary least squares (OLS) regression model, to assess the relationship between different innovation strategies and key outcomes such as revenue growth, cost reduction, market expansion, and the development of new intellectual property.
The findings revealed the complex ways in which innovation strategies are shaped by dynamic capabilities in the face of disruptions. Specifically, this study found, contrary to conventional beliefs, that proactive innovation strategies are not always the best suited for volatile environments. Instead, the study found that innovation strategies that promote simplicity and adaptability proved more effective in shielding firms from external shocks of the Covid-19 pandemic. Firms with active innovation strategies, supported by strong dynamic capabilities of internal R&D and collaboration, showed the greatest resilience, while those relying on passive or reactive strategies were more vulnerable to disruption. These findings suggest that policymakers should encourage flexible and adaptable innovation strategies, particularly in sectors like agriculture that are prone to high volatility and external shocks of climate change. The findings of this study call for the importance of aligning innovation strategies and dynamic capabilities with the specific challenges of the sector to ensure long-term innovation success.
Keywords: Agriculture; Covid-19; Developing Countries; Dynamic Capabilities; Innovation Strategy.
Introduction
Innovation strategies are the deliberate and systematic approaches that firms use to develop and introduce new products, processes, or ideas to sustain their competitiveness and growth (Karlsson & Tavassoli, 2016; Love, Roper & Vahter, 2014; Pearson, 1990). These strategies, as argued by Pearson (1990), are essential for maintaining a firm’s market position and responding proactively to changing needs in their environment. Love, Roper, and Vahter (2014) argue that innovation strategies play a critical role in enhancing a firm’s adaptive capacity in the face of external pressures as well as to drive business growth. These strategies enable businesses to effectively navigate changes in institutional and regulatory frameworks, market conditions, and technological advancements in order to ensure long-term sustainability (Hall and Bagchi-Sen ,2007). However, to successfully navigate the challenges in their external environment, firms need to have the necessary dynamic capabilities to help them sense opportunities, seize them effectively and reconfigure their resources to maintain their competitive edge (Teece, 2007; Eisenhardt & Martin, 2000).
The concept of dynamic capabilities has widely been used in the literature to provide a useful lens through which innovation strategies are understood (Hutton, Demir, & Eldridge, 2021, Monteiro, Soares, & Rua, 2019, Burisch, & Wohlgemuth, 2016). Dynamic capabilities, which are based on an organisation’s capacity to identify, make use of, and adapt in the face of external shocks, highlight the significance of resilience and strategic flexibility (Chirumalla, 2021; Pundziene, Nikou, & Bouwman, 2022). Some scholars have argued that these capabilities enable firms to dynamically adapt their innovation strategies, using their inherent strengths, previous experience and contextual awareness to navigate through challenges in their external environments (Dacko, Liu, Sudharshan, & Furrer, 2008; Teece, 2018; Teece, Pisano, & Shuen, 1997).
In the context of the agricultural sector, innovation strategies and dynamic capabilities are particularly useful given the wide range of challenges the sector has faced over the last few years. Amongst others, these challenges include rising input costs, declining productivity, increased global competition and the sector’s inherent vulnerabilities to environmental and economic fluctuations, which were further exacerbated by the Covid-19 global pandemic
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