Innovation System Policies in South Africa Growth

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Innovation System Policies Innovation System Policies in South Africa - Growth & Development Potentials and RealitiesRealities

Rasigan MaharajhInternational Innovation for Development Symposium-

Frontiers of Research, Policy and PracticeTheme 3, Wits Business School

Chaltsy Auditorium West Campus24th February 2010

Outline

1 I t d ti1. Introduction2. Periodising the SA Policy Transition3. Empirics of Transformation4. Assessing the SA National System of Innovation5 C l i

Institute for Economic Research on Innovation

5. Conclusions

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1. Introduction


INTRODUCTION• Global Change• Regional Challenges• Domestic Transition• Domestic Transition


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Global Change• Changing GEO-POLITICAL Context

– Financial Crisis– Environmental Constraints– Energy Matters– Food and Nutrition


Regional Challenges• Sub-continental

integration• Structural Harmonisation• Cyclical Alignment

• African Unity• Peace & Security• Development orientation• Legacy issues


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Domestic re-Transition• Balance of Forces

– Resurgence of Progressive Left– Executive Reorganisationg– Structure and Strategy– Reconnecting with Africa


2. Periodising the SA Policy Transition


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PeriodisationPolicy Acronym Phases 1991 1994 1996 1997 2002 2007 2010

48th ANC National Conference Durban

1X

49th ANC National Conference Bloemfontein X

Ready to Govern Manifesto XReconstruction & Development RDP XpProgrammeGreen Paper on S&T GPS&T XGrowth, Employment & Redistribution Strategy

GEAR

2X

White Paper on S&T WPS&T X50th ANC National Conference Mafikeng X

Micro-economic Reform Strategy MRS X

National Research & Technology Development Strategy

NR&DS

51st ANC National Conference Stellenbosch X

Accelerated & Shared Growth Initiative ASGISA X


Accelerated & Shared Growth Initiative ASGISA

3X

52nd ANC National Conference Polokwane X

National Industrial Policy Framework NIPF X

10 Year Plan: Innovation towards a Knowledge-based Economy

10YP X

Industrial Policy Action Plan IPAP 2 X

Pre-Transition• Regardless of how this is

eventually organised, two main eventually organised, two main goals of the system will be to improve the living standards of our people, and to ensure a climate in which our scientists

d i th i


and engineers can thrive.• Nelson Mandela (1993) Science and Technology in a Democratic South

Africa: An ANC Perspective, Speech to delivered by the President of the African National Congress to the Centenary Conference of the South

African Institution of Mechanical Engineers, 30 August.

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Pre-Transition• It can be argued, for instance, that it is

much more important to achieve i i i i i l k competitiveness in international markets

through the resolution of internal demand and that this could constitute the special way in which the social and economic needs of South African society must be turned to its advantage.


• Enver Motala (1993) Science and Technology, Education and Training and Labour Market Policies: Comprehensive Policies for Manufacturing Growth, Address Presented to the Centenary Conference of the South

African Institution of Mechanical Engineers, 30th August.

RDP White Paper (1994)3.13 Science and Technology Policy 3.13.1 Science and technology have served the interests of the minority and the political goals of

apartheid. This sector must confront the following problems:• fragmentation and poor management of the science and technology system • lack of coordination between science councils, government, tertiary institutions and industry • lack of an effective consultative process in determining national priorities • skewed allocation of funds. 3.13.2 Science and technology have an important role to play in the development of all sectors of our

society. South Africa's economy is characterised by extremely unequal distribution of resources. Therefore, technology policy must address this duality, and must also address both the development of indigenous and exogenous science and technology, in order to meet the challenges of South Africa's people.

3.13.3 The public sector, in partnership with the private sector, has an indispensable role to play in technology development.

3.13.4 The Government will implement a programme to prioritise key performance areas; identify legislation requiring amendment to achieve the integration of the science councils, and establish linkages between the scientific and technical priorities and RDP objectives.

3.13.5 Institutional changes will be introduced to ensure


3.13.5 Institutional changes will be introduced to ensure • the representativeness of all scientific boards • the integration of all scientific councils through appropriate enabling legislation • coordination between the Science and Technology Ministry and other Ministries. 3.13.6 A national campaign for scientific and technological education and training is essential, together

with measures aimed at improving the status of technical and technological careers

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Explicit STI PoliciesMass Democratic Movement + Statutory Structures

ANC Discussion Document on Science & Technology for a Democratic South AfricaEminent Persons Review (IDRC Commonwealth & OECD)Eminent Persons Review (IDRC, Commonwealth & OECD)Science & Technology InitiativeNational Science & Technology Forum

Green Paper on Science & TechnologyAudit of Science, Engineering & Technology in the Public

SectorForesight: Preparing for the 21st CenturyReview of Science Budget Vote

White Paper on Science and TechnologyR i f S i E i i & T h l I tit ti


Review of Science, Engineering & Technology InstitutionsNational Advisory Council on InnovationNational Research Foundation

National Research and Development Strategy10 Year Plan for Science and Technology

Implicit: MRS


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Implicit: ASGISA 1• ACCELERATED SHARED GROWTH INITIATIVE FOR

SOUTH AFRICA • Launched in February 2006

– accelerate the rate of economic growth, – substantially increase the employment rate, and – broaden the impact of economic development so

that South Africa can meet its development goals • Halving unemployment and poverty by 2014

– the economy would have to grow at an average rate


the economy would have to grow at an average rate of at least 4.5% in the period to 2009, and by an average of 6% in the period 2010 to 2014

Implicit: ASGISA 2• ‘binding constraints’

1. the relative volatility of the currency2 th t ffi i d it f th ti l 2. the cost, efficiency and capacity of the national

logistics system3. shortages of suitably skilled labour, and the spatial

distortions of apartheid affecting low-skilled labour costs

4. barriers to entry, limits to competition and limited new investment opportunities

5. the regulatory environment and the burden on small


g yand medium enterprises (SMEs)

6. deficiencies in state organisation, capacity and leadership

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Implicit: NIPF• NATIONAL INDUSTRIAL POLICY FRAMEWORK

– adopted in January 2007• promote diversification• facilitate progression up the value chain• foster growth in labour-intensive sectors

– promote the growth of a strong local industries and service

th h i t ti i


economy through interventions in identified sectors

Implicit: IPAP• INDUSTRIAL POLICY ACTION PLAN

– IPAP 1 (2007 – 2010)• Sector Choices:• automotives & components, medium & heavy vehicles,

plastics, pharmaceuticals & chemicals, clothing, textiles, footwear & leather, bio-fuels, forestry, paper, pulp & furniture, cultural industries & tourism, business process services (or call centres)

– IPAP 2 (2010 - 2013)• Sector Clusters:

– NEW: metals fabrication, capital & transport


NEW: metals fabrication, capital & transport equipment, green & energy saving industries & agro-processing

– CONTINUING: IPAP 1– ADVANCED: Nuclear, Advanced Materials &

Aerospace

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Implicit: IPAP 2• INDUSTRIAL POLICY ACTION PLAN (2010 - 2013)

– Enhancing access to concessional industrial financing for investment in priorities and other productive sectors on terms comparable to those of major trading partnersp j g p

– Revise procurement legislation, regulations and practices to sequentially increase competitive local procurement and supplier development opportunities, minimise ‘leakages’ from the domestic economy and support meaningful Broad Based Black Economic Empowerment

– Deploy trade policies more strategically and strengthened technical infrastructure (SQAM)


strengthened technical infrastructure (SQAM)– Targeting anti-competitive practices particularly where

these concern intermediate inputs to downstream labour absorbing production as well as consumer goods to low income households

3. Empirics of Transformation

Institute for Economic Research on InnovationSource: Presidency (2009) Development Indicators

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GDP Changes


Gross Expenditure on R&D


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Sectoral shares of Value-added


Manufacturing Shares of Value-added


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Spatial Distribution


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Economic Activity

34%

47%

Female 66%Male 50% 50%

Rural 31% 69%Urban 53%

Economically Active

Not Active (Unemployed or Not Participating)

y g

50%

52%

37%

%

52% 48%African 63%

Post Matric 76% 24%Matric 50%

Less than Matric 34% 66%

White 67% 34%Indian 48%

Coloured


42%

86% 14%Post Matric 76% 24%

South Africa 58%

College

90%80%70%60%50%40%30%20%10% 100%0%

Human Resources in Society


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Labour Productivity


Unemployment Rates


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Employment Composition


Employment of Tertiary-Level Graduates


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Informal Economy (Employment)


Informal Economy (Vocation)


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4. Assessing SA’s NSI


R&D Financing and Performance – (Share by Source of Finance)


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Business R&D Expenditures


R&D by Type of Expenditure


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Private Innovation Expenditures (2004)


Trends in R&D Personnel


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Higher Education Enrolments


Higher Education System Outputs


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Occurrence 0f Innovations


Firm-Impact of Innovations 44.7%

33.0%

22 5%25 0%

30.0%

35.0%

40.0%

45.0%

50.0%

22.5%21.1%

18.9%

14.8%12.4%

7.8% 7.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%


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Factors hampering Innovation

15%

20%

25%

30%

0%

5%

10%

15%


A better life for all?1994 1996 2002 2008

# of House Holds 8, 584, 556 9, 059, 606 11, 479, 000 13, 448, 000

% in formal - 64 73 74 % not in formal - 16 13 13 % in traditional - 20 15 11 % no access to water infrastructure

34 28 9 4

% no access to sanitation 50 47 36 23


% no access to sanitation 50 47 36 23 % no access electricity 49 40 30 27

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5. Conclusions


Conclusions• Persistent Contradictions

– Gender, Race & ClassSt t & C l– Structure & Cycle

• Alternative Conceptualisations– Neo-Liberalism or Development

• New Challenges– 2.5 million young people?


• The Southern Potential– IBSA & BRICS– SADC & African Unity!

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References• [email protected] and www.ieri.org.za

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Innovation System Policies in South Africa Growth