Tag: R&D funding

The top 10 things you need to know about SA’s R&D survey

The National Survey of Research and Experimental Development is a delicious smorgasbord of numbers, a snapshot of South Africa’s National System of Innovation. For those who don’t have the time to read the report (or have an aversion to deciphering the numbers), here are the highlights:

1. In 2014-15, South Africa spent R29.345-billion on research and development (R&D). That’s up from the R25.661-billion in 2013-14. At constant Rand values, it was an increase of 8%.

 

2. Almost half of this R&D cash went to labour costs.

 

3. Unfortunately, we’ve once against missed our ambitious targets. Prior to 2008, the goal was to spend 1% of gross domestic product on R&D. Government is now eyeing 1.5%, which is a bit like asking for R1,000 when you can’t scrape together R100. In 2014-15, the country as a whole — which includes government, business, and non-governmental organisations — spend 0.77% of its treasure on R&D. That is up from 0.73% the previous year.

 

4. Government has — for the third year in a row — spent more on R&D than business. Government, in this instance, also includes universities. This a problem, though, as internationally business is usually the major driver of R&D: R&D leads to new products and services, making companies more competitive.

 

5. State-owned enterprises account for 15% of business spend on R&D.

 

6. The good news is that this business investment in R&D is starting to see some recovery: from R11.783-billion in 2013-14 to R13.291-billion in 2014-15. Science and Technology Minister Naledi Pandor said at the launch: “Business R&D spending is showing signs of recovery. We wish it was robust, but it is showing signs of recovery.”

 

7. Mining and quarrying continued to take a beating, with business’ R&D spend in this field declining by 20%.

 

8. Most of the R&D undertaken in South Africa is applied research (48.8%) rather than basic research (24.3%).

 

9. The number of researchers in the system (by headcount) continues to increase: from 42,828 in 2012-13 through to 48,479 in 2014-15, which is quite a jump. Credit for this 5,561 rise is mainly due to doctoral candidates and postdocs.

 

10. A bonus on this year’s “key findings” is that they have started to include “Female researcher numbers” as a stand alone category to tracked. Women account for 44% of researchers, which puts us up among some of the world’s most gender-transformed countries. The latest OECD data puts France at 25.6% (2012), Germany at 26.8% (2012), and Russia at 37.4%.

Africa needs science to advance

“Africa cannot advance without investing in science,” science and technology minister Naledi Pandor told the opening session of the Science Forum.

Investment in research and development (R&D) is considered an important metric in economic competitiveness, growth and job creation. However, while Pandor flags the need to invest more in science and technology, South Africa is consistently failing to meet its own R&D investment targets.

The original goal was to spend 1% of its gross domestic product (GDP) on R&D by 2008, but seven years later that target has still not been met. While the actual amount spent on R&D has increased – GDP has been growing – the percentage of GDP spent on R&D has not. The African National Congress has noted that this is an area of concern, and is pressing for 1.5% of GDP to be spent on research. Between 2010-11 and 2012-13, the most recent figures available, that percentage has languished at about 0.76%. The country would need to more than double its spend on R&D to meet the ANC’s proposed target.

For some context, the average R&D spend for countries within the Organisation for Economic Co-operation and Development is about 2.4% of GDP. What this means in tangible terms is that these countries are spending more money on trying to come up with new products and new ways of doing things – and other countries, like South Africa, are buying this technology.

According to the National Advisory Council on Innovation’s (Naci’s) 2014 science, technology and innovation indicators, in 2013 the country imported $1.9-billion in technology, while it exported about $63-million. Specialists say that this situation is unsustainable, as the balance of payments continues to steadily widen.

“If you keep importing more than you are exporting, you have this balance of trade deficit,” Azar Jammine, Naci’s project leader for monitoring, evaluation and indicators. “You become more and more reliant on your peers. The more you innovate, the more competitive you should become with your peers. It enhances the ability of your country to export more with its own facilities, and not rely on imports to keep the country going,” he said.

South Africa’s technology balance of payments is one of the highest in the world.

This also makes the country dependent of foreign exchange, which is particularly important as the rand continues to weaken against other major currencies.

The story of South Africa’s innovation woes can be seen in its patent numbers which, according to the 2014 indicators, continue to decline. The number of patent family applications, which is a single patent of invention filed in different countries by the same inventor or owner, plummeted from a peak in 144 in 2008 to 45 in 2012.

This makes South Africa substantially less competitive to comparison to over countries, as we are shackled to buying their technology.

The department of science and technology has instituted a number of programmes to address both business’ reticence to invest in R&D and the decline in patent numbers.

Through the R&D tax incentive, businesses are effectively paid to undertake R&D in the country, although the uptake take of this incentive has been slow. Similarly, interventions to boost the number of patentable and commercialisable technologies developed in the country, such as the Technology Innovation Agency which was established in 2008, are yet to realise their hoped-for potential.

In her address to the Science Forum, African Union (AU) chair Nkosasana Dlamini-Zuma said: In terms of “African development, do we want to go back to the industrial revolution, or use science to leap frog? We don’t want to be the recipients of technology. We want to manufacture, so we need science to do that.

“Everything that is a priority for the African Union needs science…. I cannot think of anything we are doing that does not need science,” she said.

While the economic implications of increased R&D spend are well established, science and technology can also be used to address on-the-ground problems.

Pandor said: “Unfortunately, science is still at the margins of government attention. [It is] seen as less significant than water scarcity, food insecurity, disease burdens, and yet all of these things can be addressed through investments in science.”

While Pandor noted that science was not a focus of government attention, the department of science and technology’s budget continues to grow despite a constrained economic environment.

In the national budget announced earlier this year, the department, which co-ordinates research in South Africa and oversees the National Research Foundation, the country’s main disburser of postgraduate funding – saw its budget increase from R6.48-billion in 2014-15 to R7.48-billion in 2015-16, R7.56-billion in 2016-17 and R7.61-billion in 2017-18.

But while government continues to spend more on science, technology and innovation, the same cannot be said of business. The 2012-13 financial year marked a watershed in the spending of R&D: it was the first year in which government spending on R&D surpassed that of business.

This is rather singular: in most countries around the world, business drives R&D spend. But industry’s reticence to invest in South Africa – and R&D is just one form of investment – has been repeatedly cited as a major factor hampering innovation in the country.

Most of government’s spend has been at higher education institutions, and through the funding of postgraduate students.

This is an area in which South Africa’s innovation system is seeing some success. The number of doctoral candidates produced in the country has increased, as well as the percentage from previously disadvantaged background. In his keynote address in the Science Forum’s first session, Prof Salim Abdool Karim – head of the Centre for the Aids Programme of Research in South Africa – noted that 2013 was the first year in which more doctorates were awarded to black candidates than white.

In 2004, 1 105 people were awarded PhDs, and this number had almost doubled – to 2,051 – in 2013. The number of doctorates in science and technology subjects more than doubled in this period.

A major theme that ran throughout the forum was the need to develop human capacity to help African countries achieve their development goals. Dlamini-Zuma noted that Africa, as a continent, had a comparatively young population. “All of these young people [are] an asset if we invest in them, a big liability if we don’t,” she said.

 

  • NOTE: This is part of a series produced for Independent Newspapers’ post-Science Forum supplement.