Presentation to NCPC and Manufacturing Indaba

KZN

22 July 2015

Jayesh J Ravjee

Introduction

The TLIU was established to assist the South African manufacturing sector to enhance

their capability to participate in the infrastructure rebuild programme.

Expected Goals

• Innovation

• Technology Transfer

• Product Development

• Human Capital Development

Import Substitution

• Export capability development

• Facilitating R&D

• Facilitating access to markets

History of “Incubation” in SA

• SBDC Hives

• ESCs

• LBSCs

• LIPs

• ‘Incubators’

• 1st Manufacturing Incubator 1994 CSIR

• Godisa Programme(2002)- Godisa Trust to STP (2006)

• Seda = Namac, Ntsika, Godisa, NTTC, TWIB, TAC

• ISP, Jobs Fund, Seda

• Are we now creating High Technology Localisation and Knowledge-intensive Incubators?

Primary Goal of Business “Incubation”

What’s all this HIVES, ESC’s etc How Can We use

this in Localisation moving from Tier 3 to 1 to OEM?

The primary goal of business incubation is to facilitate

economic development by improving the

entrepreneurial base (of a local area, town, province,

country…) through the provision of infrastructure and a

variety of business support services

Effective Models for technology / skills transfer…….? Can it be applied to Localisation ? We now have several “hybrids”.

Model B - Innovation Support CentreTests, Optimises and Commercialises New Technologies

South Africa- NO Longer, European BICs, USA, Hong Kong, Czech Republic, Poland,

Model C - Technology Demonstration CentreSector Focus - Demonstration / Upgrade of Technologies - Value Added

South Africa, Zimbabwe, Kenya, Ghana, Jordan, Viet Nam, Hong Kong

Model A - Technology IncubatorsProtected Environment to Support Technology “Start Ups”

South Africa, Hong Kong, UK, USA, Hungary, Russia, Portugal, Jordan, Ghana

Problem tree for TLIU

Low entry rates ofSMMEs into

manufacturingsector

Poor access tofacilities for

testing &promotion of

ideas

High failure ratesof start-up SMMEs

Poor technologysupport to Companiess

Outdatedtechnologiesemployed by

Companies

Low rates of

economic

growth

Weak

competitiveness

on global

markets

Insufficient

levels of value

added in

industry

Low levels of

productivity

Insufficient rate

of technological

innovation

High unemployment& poverty particularly amongst

previously disadvantagedgroups

Problems to be addressed

by TLIU

Problems to be addressed

by outcome of activities

Problems to be addressed by

longer term impact of programme

Exogenous Factors?

Market Dynamism

Comp/coop/cluster

Outward orientation

Trade regimes

State procurement

Distribution

Designation

Business Culture

Societal activities

Regional Culture

Assoc./Chambers

Mobility/flexibility

Self-reliance/network

Firm-Level Strategies

Sector –Level Strategies

Continuous Localisation

Human Resource

Strong universities

Strong Technikons

R&D capability

Entrep. dev./tech. mgmt.

Expat nationals

Health

Finance Dynamism

Bank system

Credit/criteria

Risk capital

State support

Alliances

Direct Support

Universities

HEIs

Counseling

Training

Information

Business incubators

Tech parks

Macro Dynamism

Enabling policy

Growth/stability

Taxation

Labor/comp. laws

Innovation strategy

Policy & Localisation Business System

INPUTS

17/7/03 8

Context: economic growth, equality and SMMEs

Issues:

• Large number of SMMEs

o Notably survivalist /informal PDI firms.

o Employment creation

o Designation/Localisation

• From resource- towards knowledge- based economy:

o Need to strengthen value added and boost export ledgrowth.

• Black economic empowerment:

o Exclusion from 'levers' of economic growth and fair share in wealth.

9

Context: the national system of innovation

Issues

• Very low research intensity - public and private sectors;

• Weak commercialisation (low patenting rates, etc.)

• Limited SET skills base – ageing and not reflectingpopulation ethnic mix;

• Dominance of a few (larger) firms and sectors in terms of available Government funding for innovation;

• Limited existing mechanisms for fostering technology transfer.

Instruments to be used

Direct Support Systems

Indirect Support Systems

Technology Innovation Incubators

Green Fund

MCEPScience

Councils

SEFATechnology

Commercialisation Fund

Technology Transfer Grants

11

Business Incubation

Finance

Inputs

Entry

criteria

Strategic dimension

Stakeholder

objectives

Management

skills

Opportunities

Process Outputs

Pre-

incubation

Exit

criteriaIncubation

Post-

incubation

Target

market TrainingBusiness

advice

Financial

support

Technology

supportGraduation

Effectiveness

Sustainability

Efficiency

Operational dimension

Relevance

Impacts

Incubation processes & services

12

Establishment of a new “Localisation” Incubator

Good practice

Considerations for designing/defining a new Centre

Incubator

type

Services to

be delivered

Target

beneficiaries

Partnership

agreements

Physical

location

Legal status

Defining

factors

Actions to be

implemented

Incubator type - e.g. general-purpose, sector-based, etc.

Legal status – appropriate type of legal entity

Physical location – where it is most convenient to locate the incubator, taking into account regional economic context, needs of entrepreneurs, existing SMME support services

Partnership agreements – with local role players with which incubator will interact to deliver its services

Target beneficiaries – identification of who is mainly to benefit from the incubator services

Services – definition of services and the key qualifications of the incubator, taking into account entrepreneur needs, existing support services and partnerships

Actions – programmes & projects to be designed and/or managed by the incubator to achieve the strategic goals

Jon Burns

TLIU Model - The Localisation Support Mechanism

People

with Ideas

People

with

Designs

People

with Inventions

Analysis

Testing

Prototyping

Utility ReviewIntense Support

Optimising

Market testing

Commercialising

Packaging

PricingDistribution

Enhanced/New

Products

Enhanced/

New Businesses

JOBSWEALTH

TLIU catalyse and facilitate the development of “blue prints” into commercial products. The focus is on the technology localisation.

WHY LOCALISATION

• They are aimed at promoting development throughout the RSAand are found in the three spheres of government and some area partnership with the private sector

• They are Catalytic in nature with ripple effect and havepotential to take the RSA to a higher trajectory of economicgrowth and development

• They have a major infrastructure component in the projectcontent.

• They support radical spatial, social and economic transformation

• They are based on multi-year inter-governmental and inter-departmental collaboration and cooperation and in partnershipwith the private sector

• They promote and support economic development and jobcreation and will lead to improved service delivery, entrenchingof good governance, deepening of democracy andstrengthening partnerships

• They are clustered in three sectors: Economic Cluster, SocialCluster and Governance and Planning Cluster.

14

Broader Role of TLIU

CURRENT CURRENT

FUTURE

FUTURE

SOCs SOCs

Some Gauteng-based Infrastructure

Development

GAUTENG TRANSFORMATIONS

17

4 TRANSFORMATI

ONS

Radical Economic Transformation

Decisive Spatial Transformation

Accelerating Social

Transformation

Transformation of the State and

Governance

• Intervention in key sectors of the economy and unlock growth & employment

• Empower blacks, women & youth• Revitalise township economies

• Develop the GCR Master Plan made up of transport plan and

• Integrated human settlements & new cities

• Modernise education• Improve public health and rollout NHI• Tackle poverty and social dev challenges• Improve safety

• Build a developmental state through better organisation and professionalisation

• Promote activist, purpose-driven government

• Promote active citizenry and community mobilisation

GAUTENG MODERNISATIONS

18

4

MODERNISATIONS

Public Service

Economy

Planning of Human

Settlements

Public Transport

• Build green & smart public service• Build connected government, vertically

& horizontally • Government to people/ People to

government

• Deployment of research, innovation science & green and blue technology

• Promote green and high density settlements

• Breaking down apartheid spatial plans and build post-apartheid cities

• Planned urbanisation & urban development• Radically improve better planning, public

transport and urban decay• Single ticketing system & integrated road

network

GAUTENG RE-INDUSTRIALISATIONS

19

2

RE-INDUSTRIALISATIO

NS

Take a lead in Africa’s new industrial

revolution

Re-industrialize Gauteng & SA

• Ekurhuleni: Revitalisation of manufacturing, beneficiation, BPO (heavy industry, steel, & engineering)

• Automotive industry in Tshwane including cultural and economic tourism

• West Rand: Green economy, agro-processing, revitalisation of mining land

• Johannesburg: Financial services hub and BRICS regional bank

• Sedibeng: New Metro, River City, ecotourism, steel industry

• Review trade relations with SADC region and the continent

• Implementation of Game Changers to reposition the GCR as a leader in industrial revolution

© CSIR 2006

www.csir.co.zaSlide 20

Daimler Chrysler Sisal Project

Impact - Current Projects

Company Assisted: SWASAP• Through the TAP implemented at SWASAP the

company achieved an EN13261 accreditation

from the Duetsche Bahn

• Only axle manufacturer in South Africa

• The company can now supply axle to Europe

and North America

• SWASAP have been awarded contracts from

Bombardier to supply axles to projects in

Riyadh, Queensland and London.

• The export orders to these 3 projects

exceeds a total R 50,000,000.

• SWASAP will be a preferred supplier of axles

to be used on the 1064 locomotive build

project as well as the PRASA rolling stock

project

Impact - Current Projects

Company Assisted: Adventure Power• This company is the only local

manufacturer of medium sized wind

turbines.

• The local content of the wind turbine

manufactured is estimated at 70%.

• The TLIU assisted Adventure Power with

technology interventions that allowed the

company to comply with international

standards for wind turbine manufacturers as

defined by Germanischer Lloyd.

• Through the technology implemented that

company can now produce one 16 m wind

turbine blade per day as opposed to a lead

time of a month previously.

• The company has sold and installed a total of

six 300kW wind turbines.

• This has resulted in the creation of an

additional 21 jobs at the company.

• Currently the company is working on

export orders to the Phillipines

Partnerships/ Collaboration

• Transnet Engineering

• Eskom Supplier Development

• Eastern Cape Development Corporation

• SKA

• OEMs (Bombardier, ABB, Alstom, AREVA, etc)

• National Foundry Technology Network

• Academic Institutions

• SEDA

• Productivity SA

• Gibella

• KEMA

• Technology Stations

• GIZ – Skills for Green Jobs

• DST Regional Innovation Forum Portal

Lessons Learnt

• Utilization of home grown talent and expertise• One size does NOT fit all• The primary objectives must be the sole focus of localisation• Support and commitment of Management and all stakeholders• Well resourced support team• Localisation is a business• Proper monitoring and evaluation systems• Marketing of successes• “SIMPLE” processes• Networking• WIN-WIN-WIN

Rather try and fail then fail to try!

Questions

Thank You

Together Lets Do More by Supporting Localisation

Jayesh Ravjee

jravjee@csir.co.za