South Africa

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An emerging economy, South Africa is at a critical stage of its Ten-Year Innovation Plan (TYIP) (2008-18) and is currently dovetailing these efforts with the National Industrial Policy Framework and other socio-economic policy imperatives.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Innovating to contribute to structural adjustment and a new approach to growth

To transform the industrial base and to increase competitiveness, South Africa is implementing a portfolio of R&D-led industry development programmes in the areas of additive manufacturing, advanced metals, aerospace, chemicals, energy, platinum, mining and ICT. These programmes are in addition to those identified in the more science-intensive TYIP. The TYIP underpins the country’s transition to a knowledge economy and is built around five “grand challenges”: biotechnology and bioeconomy (formerly pharmaceuticals), space, energy security, global change, and understanding of social dynamics. The National Development Plan (NDP): A vision for 2030 provides a roadmap for South Africa’s transition towards a diversified economy by 2030, with innovation underpinning almost every aspect.

Innovation to contribute to addressing social challenges (including inclusiveness)

While a focused programme on innovation for inclusive development has been launched, several initiatives are being introduced to address social challenges, with a strong emphasis on gender and black representation in science, technology and engineering. Examples include the Thuthuka programme and the 2013 Guidelines for Achieving Equity in the Distribution of Bursaries, Scholarships and Fellowships, which set targets of 80% for black and 60% for women in all human capital development projects.

Improving the governance of innovation system and policy

The NDP stresses the need for the national system of innovation (NSI) to function in a coherent and co-ordinated manner, with broad objectives aligned with national priorities. It seeks to improve the governance of the innovation system, especially by ensuring the alignment of STI activities across government and by co-ordinating public funding. Accordingly, there has been growing emphasis on directing public funding to the key areas in the TYIP, the Industrial Policy Action Plan (IPAP) and the programme of action encapsulated in the New Growth Path. The required links between STI policies and the National Industrial Policy Framework also receive attention. The Technology Innovation Agency (TIA), created in 2010, is a critical platform for facilitating increased commercialisation of research findings. An external review of the TIA was conducted in 2012, and its recommendations are being considered for implementation.

Industry-science linkages

Industry-financed public R&D expenditure is low (Panel 1o), an indication that industry- science links need to be improved. The government recognises the importance of strong links between the S&T and business communities for agenda setting and stimulating investment in STI. In 2013, the Minister of Science and Technology launched the STI Summit, a formal annual platform for discussions with South Africa’s business leadership. The Department of Science and Technology (DST) and of Trade and Industry (the DTI) have embarked on a process of reviewing the basket of incentives and support instruments for increased R&D, innovation commercialisation and improving linkages with industry.

Human capital development

A major bottleneck for South Africa’s socio-economic development in general, and for the advancement of STI in particular, is the lack of a broad skills foundation. The share of the adult population with tertiary-level education is extremely low by OECD standards (Panel 1t), and the ageing of the white male STI workforce further weakens the skills base. To increase the pool of human capital for STI, the government has a series of initiatives that focus on improving access to science and mathematics education for youth and supporting postgraduate students and researchers. Postgraduate students supported by the National Research Foundation doubled from 5 061 in 2008/09 to 11 400 in 2013/14, and the NDP aims to increase the number of doctoral graduates to 5 000 a year. To improve equity, the government issued in 2013 Guidelines for Achieving Equity in the Distribution of Bursaries, Scholarships and Fellowships.

Country Charts

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Selected Highlights

New sources of growth

The government intends to support technology and capacity development in the areas mentioned under the initiative for R&D-led industry development. Initiatives include the development in 2014 of an Emerging Industries Action Plan (EIAP), which is aimed at providing a policy and funding framework for the technological maturation and commercialisation of large R&D projects with the potential to create substantial new industries. It will also seek to increase private-sector participation and stakeholder buy-in for these projects and to increase access to local and export markets. In addition, a sectoral innovation funding instrument has been launched to address technology and innovation issues within sectors, based on joint public-sectoral funding.

New challenges

Development of the renewable energy market is seen as essential to securing sufficient energy supply and to further the transition to a green economy. The Green Energy Efficiency Fund (GEEF), established in 2011 with USD 94 million (ZAR 500 million), assists South African companies that invest in energy efficiency and renewable energy projects through a loan with a payback period of 15 years. ATen-yearWaste R&D and Innovation Roadmap is currently being developed. The Department of Environmental Affairs has launched a Green Fund with USD 136 million (ZAR 800 million) committed and being disbursed to implementation and R&D projects that can inform policy through better evidence.

Universities and public research

South Africa has a national research system that is small in relative terms but has pockets of excellence (Panel 1a, b, c, q). Existing initiatives to enhance knowledge production, such as the Research Chairs and the Centres of Excellence, have helped increase the number and quality of scientific research outputs and increase the number of researchers. For example, international S&T publications by South African researchers increased by 3.2% a year over 2001-11. This remains a key focus for the government.

Innovation in firms

South Africa’s business R&D input and innovation output are lowby OECD standards (Panel 1d, e, f, g). BERD decreased in both absolute terms and as a share of GDP over 2008-11 (the latest year for which data are available). To address the longstanding problem of business R&D investment, the policy mix (or instruments) for promoting business-sector R&D and innovation continues to receive increased focus. The R&D tax incentives, which were significantly enhanced in 2006, now provide 150% in tax deductions on R&D expenditure incurred by firms of all sizes that undertake R&D in the country. The Industry Innovation Partnership (IIP) programme aims to foster government- business co-funding of R&D and innovation with a budget of USD 88 million (ZAR 500 million) for 2013-15. The Support Programme for Industrial Innovation (SPII) supports technology development through matching grants for the late developmental or early commercialisation phases. The Technology Localisation Programme is a supply-side scheme that provides a suite of tailor-made technology interventions to develop local technology and innovation capabilities and to improve the competitiveness of the manufacturing sector in areas linked to public procurement, with a budget of USD 84.7 million (ZAR 500 million) over 2014-17. The Competitive Supplier Development Programme (CSDP), driven by state-owned companies with support from DST, gives local enterprises technology support to strengthen their ability to supply competitively to large public procurement projects and foreign multinationals.

Technology transfers and commercialisation

The National Intellectual Property Management Office (NIPMO), was created in 2011 as an interim office and approved as a specialised service delivery unit (SSDU) within the DST in 2013 to implement the Intellectual Property Rights from Publicly Financed Research and Development Act, put into operation in 2010. The Act provides for more effective utilisation of intellectual property emanating from PRIs through NIPMO support to technology transfer offices to ensure technology transfer and commercialisation of research. As an incentive to PRIs for embarking on technology transfer activities rebates for statutory IP protection and maintenance costs are provided by NIPMO through the IP Fund.