This is a presentation by Dr. Kassahun Yimer, Assistant Professor of Technology and Innovation Management Addis Ababa Institute of Technology, AAU, at the 3rd Annual East Africa Cement, Concrete and Energy Summit

1. Kassahun Yimer Kebede (PhD)
Assistant Prof. and Chair Holder of Industrial Engineering
Addis Ababa Institute of Technology
Addis Ababa University
3rd Annual East Africa Cement, Concrete and Energy Summit
Practices and challenges of innovation
in Ethiopian cement sector
1st August 2018
UNECA, Addis Ababa, Ethiopia

2. Content
• Introduction
• Innovation : Contextual Definition
• Innovation along the life cycle of cement
(sector)
• Innovation practices and challenges in
Ethiopian cement sector
• Way Forward

3. Background
• An excerpt from a partly completed and partly
ongoing research project.
– “Greening Industrialization in Ethiopia”- Large scale
project
– “Interactions of Industrial Policy and Green Economy
in Ethiopia”
• A project of UCL, EDRI, Quantum Global and AAU as
partners
• The purpose of the study was to see how green
innovations are practiced and promoted as part
of the green industrialization effort of the nation.

4. …Background
• Further reading and major study findings are
included in the following reports (except the
ongoing research findings):
– https://quantumglobalgroup.com/wp-
content/uploads/2017/03/Innovation-for-Green-
Industrialisation1.pdf
– Wakeford et al., 2017. ‘Innovation for green
industrialization: An assessment of innovation in
Ethiopia's cement, leather and textile sectors’, Journal
of Cleaner Production, Vol. 166, pp. 503-511.

5. …Background
• It is known that “Industrialize first and deal
with any negative consequences later” has
been the norm …but
– there is an emerging evidence that industries can
benefit from adopting cleaner production
methods…both in terms of lowering costs by
requiring less inputs, and thus increasing
competitive advantage…

6. Innovation
• Innovation pertains to the introduction of new
knowledge, technologies and practices, or new
combinations of existing knowledge, and their diffusion
(i.e. dissemination and use) within an economy (Edquist and
Johnson 1997:42; World Bank 2010:4).
• A more technical definition by Oslo Manual:
– “An innovation is the implementation of a new or
significantly improved product (good or service), a new
marketing method, or a new organisational method in
business practices, workplace organisation or external
relations” (OECD/Eurostat 2005:46).

7. Types of Innovations
• Four distinct types of innovation can be
specified (Oslo Manual, 2005).
– A product innovation is the introduction of
a good or service that is new or
significantly improved with respect to its
characteristics or intended uses, such as
technical specifications, components and
materials, software, user friendliness or
other functional characteristics.
– A process innovation is the
implementation of a new or significantly
improved production or delivery method,
which could include significant changes in
techniques, equipment and/or software.
– An organisational innovation is the
implementation of a new organisational
method in the enterprise’s business
practices, workplace organisation or
relations with suppliers and customers.
– A marketing innovation is the
implementation of a new marketing
method which involves significant changes
in product design or packaging, product
placement, product promotion or pricing.
Innovation
Organizational
Innovation
Product
Innovation
Marketing
Innovation
Process
Innovation

8. Green Innovation
• Innovations that result in improved environmental performance
have variously been referred to as environmental innovations,
green innovations, ecological innovations (or eco-innovations), and
sustainable innovations (Schiederig et al. 2012).
• Eco-innovation as “the creation or implementation of new, or
significantly improved, products (goods and services), processes,
marketing methods, organizational structures and institutional
arrangements which – with or without intent – lead to
environmental improvements compared to relevant alternatives”
(OECD, 2009).
– Environmental improvements include reductions in resource inputs
(such as energy, water and materials) and reductions in solid, liquid
and gaseous waste products, including carbon emissions.

9. Innovation Trend in the Cement
Manufacturing Sector
• Wide innovation and R&D projects are being
implemented worldwide mainly in the European
countries aiming at improving environmental
performance, reducing CO2 emissions and
improve energy efficiency.
• Projects ranging from carbon capture and reuse
in clinker manufacturing, development of low
carbon cements and new binders and innovation
in both concrete production and applications (
CEMBUREAU, 2018).

10. Innovation in Cement Sector: Life Cycle-based
Innovations
Source: http://lowcarboneconomy.cembureau.eu/, accessed in July 2

11. Innovation Survey in Ethiopian Industries
• Scope: Textile, Leather and Cement
• 14 cement manufacturing companies were
surveyed and key stakeholders were
interviewed.
• Ongoing research by PG students at AAiT

12. Major Findings from the Ethiopian
Cement Manufacturing Survey
• The rates of both product and process innovation were
less than 20 % amongst cement enterprises;
• Only 12% of firms reported green product innovations,
and 15 % engaged in green process innovation.
• A two-stage programme of fuel switching has been
undertaken by the cement industry. The first is shifting
from heavy fuel to coal. The second stage of fuel
switching will involve the partial substitution of
biomass energy for coal .
• Energy inputs accounted for about 60% of costs before
the switch, but this was reduced to about 40-45% with
coal.

13. …Findings …
• Two of the important drivers of innovation included
increasing market share and reducing unit costs.
• Meeting environmental regulations and sustainability
considerations were not mentioned.
• Technology and knowledge transfer links between
research institutions and firms were found to be weak,
although industry development institutes are trying to
play a key role in promoting linkage and innovation in
the sector.
• Provide access to R&D funds to stimulate
breakthrough technologies.

14. Way Forward
• Few policy related recommendations include:
– enhancing the inter-ministerial coordination of
innovation policies and support activities
– building capacity to monitor and enforce
environmental regulations, and
– providing incentives for firms to introduce green
innovations
– firms need to plan for sustaining their business
through introduction of green innovations

15. References
 https://quantumglobalgroup.com/wp-
content/uploads/2017/03/Innovation-for-Green-Industrialisation1.pdf
 Oslo Manual, 3rd Edition. (2005). Guidelines for collecting and
interpreting innovation data
 Schiederig, T., Tietze, F., Herstatt, C., 2012. ‘Green innovation in
technology and innovation management : an exploratory literature
review’, R &D Management 42 (2), 180-192.
 Wakeford et al., 2017. ‘Innovation for green industrialization: An
assessment of innovation in Ethiopia's cement, leather and textile
sectors’, Journal of Cleaner Production, Vol. 166, pp. 503-511

16. Acknowledgements
• The research team members of CDKN project
(Project Reference: RSGL-1103)
• PG-Industrial Engineering students of AAiT