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(Buchana & Sithole, 2023). The literature on innovation strategies, although extensive, often lacks empirical critique of how businesses navigate unique and unforeseen challenges such as a global pandemic. Ausloos, Bartolacci, Castellano and Cerqueti (2018, p.12) argue that “... the impact produced by innovation on performance in times of crisis has been rather neglected”. The gap between theoretical discourse and policy action on the ground became distinctly evident as the Covid-19 pandemic unfolded. This gap reinforces the importance of further examining how agricultural businesses, specifically, were able to maintain their drive for innovation during a time of uncertainty.
Using data from the South African Agricultural Business Innovation Survey (AgriBIS 2019-2021), this study integrates the concepts of innovation strategies and dynamic capabilities to investigate the specific innovation strategies they employed during the Covid-19 period.
Investigating the innovation and adaptive strategies can contribute to better understanding of how agricultural businesses innovate and build resilience to sustain competitiveness in increasingly volatile and unpredictable environments (Bartolacci, et. al, 2018). This can help ensure the survival of agricultural businesses during future pandemics and provide a roadmap for navigating any future crises. The findings can also contribute to informing the development of strategies and policies that support critical societal goals such as food security and environmental sustainability as well as the long- term growth and stability of the agricultural sector. Furthermore, the findings from this study can further be extended beyond the agricultural sector to inform broader policy discussions on strategic resilience and innovation management in other economic sectors. The experiences of South African agribusinesses, in particular, offer a microcosm of the global challenges and opportunities that businesses face in a rapidly changing world.
The remainder of this paper is organised as follows: the next section reviews related literature on innovation strategies and dynamic capabilities of firms, and then sets a stage for a discussion of the theoretical framework that guides the study. Thereafter, the econometric model and methodology come next, after which a discussion of the data analysis is presented. The findings and discussion are presented after that. The contributions to academic literature and policy development are outlined in the conclusion.
Materials and Methods
The classification of innovation strategies used in this study is based on Dodgson, Gann, and Salter’s (2008) seminal work on the management of technological innovation.
Dodgson et al.’s (2008) framework categorises firms into four distinct innovation strategies, namely: “Proactive”, “Active”, “Reactive”, and “Passive”. Proactive firms are those firms that show a high degree of sensing capability by actively scanning their external environment for emerging trends and technologies. These firms, akin to the proactive innovators described by Teece (2007), tend to take more risks and continuously align their internal processes and resources to strategic objectives. Their ability to rapidly capitalise on opportunities and transform their operations ensures they remain at the forefront of innovation.
On the other hand, Active firms, tend to maintain a moderate level of environmental awareness, and often have a balanced approach by leveraging both internal capabilities and external collaborations to seize opportunities in their environments. According to Eisenhardt and Martin (2000), dynamic capabilities enable firms to adeptly adapt and reconfigure their processes and to realign with industry-specific changes. Reactive firms, conversely, tend to have limited sensing capabilities, often relying on external sources to identify opportunities. Their innovation strategies are characterised by responsiveness rather than anticipation, as they tend to leverage external expertise to implement innovation initiatives. Such firms align with the observations of Winter (2003), who highlights the constrained transformative capacity of organisations that depend heavily on external sources.
Meanwhile, Passive firms, tend to lack the necessary struc- tures and mechanisms for environmental sensing and of- ten adopt a minimalistic approach to innovation. These firms depend significantly on external resources and insti- tutions for insights, thereby displaying low inclination to transform their internal processes. As discussed by William- son (1999), passive firms prefer optimising for short-term efficiency rather than long-term innovation capabilities.
These categories which come from the broader field of strategic management, have been widely used to understand how firms approach innovation in dynamic environments. However, as the focus of the analysis in this study is on the response of South African agricultural firms to the Covid-19 pandemic, the need to adapt. While the four categories by Dodgson et al. (2008) provide valuable analytical lens, they may not fully capture the diverse range of responses agricultural firms adopt when confronted with unprecedented external shocks like a global pandemic. To address this limitation, this study introduces a new category called “Stagnant Innovators”, which acknowledges firms that did not neatly align with the four established strategies.
Stagnant innovators in this case, are firms that display a heterogeneous mix of awareness and responsiveness,
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