Nuclear electricity generation in South Africa: a study of strategic innovation for sustainability

Abstract

Purpose

The literature on sustainable business development in emerging economies deals predominantly with the entry modes of multinationals and how they adapt to local conditions. Little has been written on how organisations in developing countries innovate and employ innovations in a sustainable manner. This paper presents a case study of an innovation business in a partially developed country, but which was taken over by a South African organisation. The purpose of this paper is to study why the venture failed and what lessons this case study offers to future developing country innovators.

Design/methodology/approach

The paper refers to the literature that addresses business projects in emerging countries and analyses the actions of a South African company that set out to develop commercial nuclear electricity generation using the pebble bed modular reactor (PBMR) technology. The approach adopted in the paper is an assessment of the events and actions that led to the project's failure.

Findings

The management of the project was flawed from the start because of a lack of measurable milestones and budgetary constraints. The South African government continued to fund the project while not controlling it. Technically, the project was too ambitious and it is not certain whether the project could ever have come to fruition.

Research limitations/implications

The generalisability of results from case study research needs to be treated with some caution, but similar findings in different contexts may strengthen internal validity, and in turn lead to wider generalisability.

Practical implications

The paper reinforces the challenges faced by businesses in emerging countries when developing innovative products. The need for financial control and technical milestones is emphasised even though innovations are by definition uncertain.

Social implications

The benefits from the PBMR could have been significant, but the project failed at a cost of $1bn, which a country such as South Africa could ill afford. The knowledge gained during the duration of the project will be of little benefit to the country, particularly as the knowledge context was extremely narrow.

Originality/value

The paper addresses a topic that has not been dealt with before in the academic literature. It highlights a number of shortcomings in the way in which a developing country embarked on an innovative project.

Citation

Hipkin, I. (2013), "Nuclear electricity generation in South Africa: a study of strategic innovation for sustainability", Corporate Governance, Vol. 13 No. 5, pp. 626-636. https://doi.org/10.1108/CG-06-2013-0079