Review of the BHP Billiton approach to innovation in its mining services supply chain in Chile has relevance to Africa
The BHP Billiton (BHPB) Cluster-Programme in Chile is a strikingly novel initiative for developing more innovation-intensive links between the company’s core mining operations and local suppliers in its host economy. It involves the application of well known principles of innovation system thinking and unusually a substantial investment in creating a demand for innovation as well as the more usual support to the supply of such innovations. The programme originated as a way of addressing industrial challenges in Chile, but it is also a component of BHPB’s corporate social responsibility activities and this maps closely on to new perspectives about effectiveness in that area.
By developing new thinking BHPB appears to be enhancing its own competitiveness while simultaneously contributing to the achievement of important societal aims. To use Michael Porter’s terms, it is "creating shared value" – and, it appears, BHPB it is doing so very effectively.
The study concluded that mere replication of the specific approach and practices of the Chilean programme is probably not relevant in most of Africa as few supplier firms have the level of capabilities of the Chilean suppliers, but there is considerable potential if the key elements of the BHPB Cluster Programme are designed and assembled in innovative ways that are appropriate to the African context.