R&D R&D SSpending in South pending in South Africa Africa
Neo Moikangoa and Adi PatersonCSIR
Context Context
R&D in South Africa
The Science Vote
The some industry research anecdotes
The way forward
R&D in South AfricaR&D in South Africa Benchmarking with the rest of the
world R&D intensity Civilian R&D Synergy with government spending Government incentives
What does R&D spending “buy” Personpower (50c in the Rand) Facilities and Equipment (30c in the
Rand) Information provision, management and
networking (20c in the Rand)
R&D IntensityR&D Intensity The primary measure of the
knowledge and innovation capacity of a nation
Total R&D spending as a proportion of GDP
South Africa: 0.69% of GDP (R4.01billion) Measure of the size of the “research base” Pays for all South Africa’s active scientists
and technological innovators A key metric of the extent to which we
participate in or can respond to the global knowledge economy
Comparing R&D Comparing R&D IntensityIntensity
Country R&D intensity
Spend (% greater than SA)
Per capita R&D spend ($)
South Africa
0.69% 0% $30
Sweden 3.1% 349% $592 (20x)
South Korea
2.8% 305% $346 (12x)
Canada 1.7% 146% $363 (12x)
Norway 1.3% 88% $316 (10x)
Civilian R&D Civilian R&D SSpending by pending by GovernmentGovernment A measure of spending related to
quality of life and economic growth A measure of national commitment to
S&T South Africa: 0.29% of GDP 0.44% in the US, 0.48% in the UK, Around 0.6%: New Zealand, Portugal,
Japan, Austria and Denmark Countries at around 0.75%: Sweden,
Norway, France, Germany, Netherlands
Iceland and Finland are close to 1%
Synergy in Synergy in SSpendingpending (policy analysis findings)(policy analysis findings) Business spending on R&D does not
“displace” government spending
When governments increase spending industry follows
Most “competitor” Governments now provide fiscal and tax incentives for R&D: South Africa does not – increases cost of R&D in SA relative to other countries
R&D in South Africa R&D in South Africa ((cont.)cont.)
Private sector “participation” trends Downsizing (e.g. Anglo, DeBeers, AECI) Outsourcing (e.g. COMRO, AECI, Iscor) Inflexible resources and shortages (IT,
Communications) Coherence with stated policy
positions of Government IT strategy, biotechnology strategy New Higher Education policy Inability of fiscal measures (alone) to
leverage growth
Implications of Our Implications of Our de de factofacto S&T Policy S&T Policy Not attractive for the private sector
to spend or invest in R&D Government’s stated policy
positions not supported by funding (more on this later)
South Africa is falling into the “Malaysia trap”
Investment and infrastucture without knowledge workers
Project and programmatic rather than substantive interventions
An unpopular cause – but you get what you pay for
The “Science Vote”The “Science Vote”
Most holistic perspective of Government R&D spending Research Councils, National Facilities
and SABS NRF (agency) and International
Programmes The Innovation Fund TechTransfer, and Special projects
Science VoteScience Vote Does not include
Special government research funds (e.g. Defence, WRC, SIMRAC)
Targeted programmes: THRIP (DTI) DoE spending in univerities DoC initiatives (for instance) Intellectual property costs/returns to the
nation We do not yet have the “Science
Budget” proposed in the White Paper on S&T (section 5.4.1): “It is the intention of government that a document setting out the Science Budget will be available for the 1998-99 fiscal year”
Change in the Science Change in the Science Vote?Vote? The Science Vote
1997/8: R1.183 billion 2001/2: R1.508 billion, but
Adjusted for Inflation 1997/8: R1.516 billion 2001/2: R1.508 billion
The de facto fiscal S&T policy of the government is to maintain R&D spending at identical real levels (but a greater number of programmes and activities are funded every year)
The Science VoteThe Science Vote
The Science Vote is a partial “Composite Budget” funding different Departments
Department of Agriculture S&T Branch of DACST Department of Health Department of Trade and Industry Department of Minerals and
Energy
The Science VoteThe Science Vote Real changes in distribution (given
that the “total” is the same): DACST is increasing its “share” of the
Vote DACST has significantly increased the
number of funding instruments - in line with policy
MRC has received increased funding based on agreements reached through NACI
All other Departments (and consequently the Science Councils) have received reduced transfer payments
Real Changes in Funding – Real Changes in Funding – Science Vote Science Vote (% of previous (% of previous year)year)
Transfer from Science Vote to Department
1998/99 1999/00 2000/01 2001/02
Agriculture(ARC)
-17.3 -7.9 -9.6 -6.1
DACST(S&T Branch)
27.8 10.5 15.2 5.5
Health(MRC)
6.2 -2.4 29.3 11.7
Trade and Industry (CSIR, SABS)
-6.7 -5.1 -8.5 -3.6
Minerals and Energy(CGS, Mintek)
-7.1 -8.4 -9.6 -1.9
DACST S&T Branch – DACST S&T Branch – Application of the Science Application of the Science VoteVote
Funding Changes in the S&T Branch National Reasearch Foundation (post-
graduate reasearch and education) has had real growth
Innovation Fund and LEAD (introduced after a pilot in 1997/8) are now at R152 million
New Initiatives: Regional S&T, Equipment Placement, GODISA, Technology Stations, etc (R32 million)
Application of Science Application of Science VoteVote
Special projects: R20 million
Protection of Knowlegde infrastructure: National Laser Trust, AISA, IKS (R21 million)
Analysis: Application of Analysis: Application of the Science Vote Overallthe Science Vote Overall Positives
A wider and more robust range of policy instruments and initiatives available
More focus on “linking up” a potentially fragmented system
Better funding of health and innovation
Much stronger emphasis on technology transfer
More stakeholders involved
Analysis: Application of Analysis: Application of the Science Vote Overallthe Science Vote Overall Challenges/ Weaknesses
Funding level will not increase the “knowledge intensity” of South African industry
Too many small programmes run from DACST
The “standard measurement” of the R&D and S&T system is in disarray (must meet international minimum standards)
National risk (resulting from reduced funding) to the research institutions
No credible “policy voice” regarding S&T has emerged and its national importance is severely underestimated (Malaysia vs Korea)
Government’s Government’s RRoleole “[The] difference between private
and social rates of return is the primary reason why governments must support R&D spending…If governments don’t support R&D spending, much too little R&D will be done…The economic payoff from more social investment [government funding] in basic research is as clear as anything is ever going to be in economics.” Lester Thurow, in Creating Wealth, pg 113, Nicolas Breasley Publishing, London, 2000.
Practical Practical ProposalsProposals Government civilian R&D spending should
be doubled over 3 years with the increases going into 3 themes:
Centres of Excellence Mission-driven research Bilateral (science council – governemtn
department) research capacity in the national interest {slide}
Fiscal incentives for companies doing R&D (based on international best practice)
Increase scope and comprehensiveness of Government’s “Science Budget” to improve overall strategy and management
Three Three AreasAreas for for IncreasedIncreased InvestmentInvestment in R&D in R&D Creation of “Centres of excellence” in
identified fields via the NRF at universites (in partnership with science councils where appropriate)
2 or 3 “mission-driven” research initiatives in key areas (e.g. Open source software, telemedicine, logistics for trade and investment, PBR)
Increased funding to science councils based on bilateral agreements with identified Government departments
Practical Proposals Practical Proposals (cont(cont..)) Engage the Department of Finance on the
“Science Budget” and its implications
Create capacity to have annual R&D and Innovation surveys (based on Canadian Model)
Introduce the concept of “national risk” into S&T policy (loss of capacity, research migration overseas, health and disease risks, defence and national security, the digital divide, bio-divide)
Provide clear signals to private sector about government commitment to S&Tdebate