Creating Knowledge Networks: Higher Education, Industry and Innovation in South Africa

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DOI: 10.1177/097172180601100203

2006 11: 319Science Technology SocietyInnovation in South Africa

Creating Knowledge Networks : Higher Education, Industry and

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CREATING KNOWLEDGE NETWORKS � 319

Science, Technology & Society 11:2 (2006)SAGE PUBLICATIONS NEW DELHI/THOUSAND OAKS/LONDONDOI: 10.1177/097172180601100203

Creating Knowledge Networks:Higher Education, Industry

and Innovation in South Africa*

GLENDA KRUSS

This article focuses on a new organisational form that is emerging in the South Africancontext—knowledge networks of higher education, industry and intermediary partners.The article focuses on seven case studies in two high-technology fields and their relatedindustrial sectors—biotechnology, being relatively new, and new materials development,being relatively mature in South Africa. It shows the complex nature of the research partnersat each node of a network, and of the structure and dynamics of the interaction thatresults. The study suggests that we need to open up the ideal enshrined in South Africanpolicy, of the desirability of research partnerships, to more informed analysis of thecomplexity of creating networks, in specific industrial sub-sectors, knowledge fields andinstitutional contexts. The major insight offered for developing countries like South Africais the value of a contextualised analysis for informing cross-sectoral coordination of inter-ventions within a national system of innovation.

Introduction: The Partnership Imperativein South African Higher Education

OVER THE PAST decade higher education institutions in South Africa, liketheir global counterparts in both developed and developing worlds, are

Glenda Kruss is Chief Research Specialist, Education, Science and Skills, DevelopmentResearch Programme, Human Sciences Research Council, Private Bag X 9182, CapeTown 8001, South Africa. E-mail: [email protected].

* This article was first presented at the Globelics Africa 2005 conference, held at TshwaneUniversity of Technology, South Africa, 1–4 November 2005. The contribution of GiltonKlerck and Shane Godfrey to the initial analysis of the cases, and of Wendy Annecke, MichaelCosser, Carel Garisch, Candice Harrison, Gilton Klerck and Rachmat Omar, who conductedthe empirical case studies, is gratefully acknowledged.



320 � Glenda Kruss

increasingly under pressure to become more responsive to economic andsocial development needs. Higher education policy goals in South Africaare underpinned by a dual commitment to contribute to addressing thechallenge of competitive integration into the global ‘knowledge econ-omy’ and, simultaneously, to contribute to equitable national economicand social development. Since the advent of a democratic governmentin 1994, there is increasing pressure on higher education to engage in re-search that is more ‘relevant’, applied and strategic, in partnership withindustry or science councils, and that can contribute to a national systemof innovation (DACST 1996, 2002a). A growing emphasis for those inscience and technology fields is to enhance research utilisation andimprove mechanisms of technology transfer to industry, the public sectoror impoverished communities. The challenges raised for academics, re-search managers, institutional leaders and policy makers across the sectorare thus multifaceted and intense.

This article focuses on one response to the challenges on new organisa-tional forms that are emerging in this context—knowledge networks ofhigher education, industry and intermediary partners that can lead toinnovation. It explores the ways in which knowledge networks are beingformed, their benefits and outcomes, and their future possibilities andlimitations. The first section will describe the contextualised approachof the study on which the article is based, elaborating a model of theforms of partnership evident in South African higher education. The nexttwo sections provide case studies of four networks in the field of biotech-nology and three in the field of new materials development, while thefinal section will consider general implications of these specific cases.Understanding how these networks are created can identify critical issuesfor policy makers, higher education institutional managers and academicresearchers to engage with, in light of the challenges facing higher educa-tion. Institutions in similar late developing country contexts may drawimplications for their own national systems from the contextualised ap-proach adopted here.

Researching Knowledge Networks

Research on Partnership in South Africa

Knowledge networks are evidence of the emergence of important andinteresting innovative capabilities across the South African higher edu-cation system. The article is based on a research project conducted by




the Human Sciences Research Council between 2001 and 2004. Researchfocused on three cutting-edge high-technology bands identified in na-tional Foresight Studies as priorities for developing a national system ofinnovation, enhancing global competitiveness and economic growth,namely, ICT, biotechnology and new materials development (DACST1999). One component of the study attempted to illuminate the govern-ment’s role in promoting research partnership by conducting an audit ofthe contribution and products of two key vehicles for incentivisation,the Innovation Fund, and the Technology and Human Resources for In-dustry Programme (THRIP) (HSRC 2003).

A second component investigated the scale and forms of research part-nership currently evident across the higher education landscape in high-technology fields (Kruss 2005). This study argued that South Africanforms of partnership are shaped differentially by the intersecting financialand intellectual imperatives driving both industry and higher education.A complex combination of old and new forms of partnership may coexistin any higher education institution, in a department and, indeed, evenwithin a single research entity to meet a variety of purposes (ibid.). Thesewill be briefly described here to explain the current focus on the specificform of knowledge networks.

There are traditional forms of partnership between industry and highereducation that have long existed and continue to be found on a smallscale at present in South Africa such as donations, philanthropy on thepart of industry or sponsorship, with postgraduate student research fund-ing a core focus. In these forms of partnership the relationship is primarilylimited to a financial one, and higher education is left free to continuewith its intellectual projects, with few conditions imposed by its industrypartners.

Numerically, old forms of partnership are newly dominant across thesystem. Consultancies and contracts have long existed, but over the lastdecade have increased across the higher education system on a signifi-cantly larger scale than before. In consultancies typically an individualresearcher in higher education acts in an advisory capacity to addressthe immediate knowledge or technology problems of an industry, usuallyin exchange for individual financial benefit. Contracts may be linked tosolving potentially interesting scientific problems or, more probable, like-wise to addressing a specific immediate industry problem. They are pri-marily shaped by the need to attract funding for research on the part ofhigher education, and by a specific product or process problem that theindustry partner wishes to have resolved. Design solutions are a related




form of partnership that has emerged where technikons (recentlyredesignated as universities of technology) with appropriate technologicalexpertise have set up centres for prototyping and testing, which offerdesign solutions to industry. These forms of partnership place potentiallysevere restrictions on the intellectual project of researchers, placingembargoes on the traditional academic products of peer-reviewed articlesand postgraduate theses, for varying periods of time, in order to protectthe proprietary interests of industry. They, thus, have potentially severenegative implications for the core research and knowledge-generationfunction of higher education.

There is small but growing evidence of the emergence of new entrepre-neurial forms of partnership such as commercialisation in which highereducation researchers take on a strongly entrepreneurial role, attemptingto commercialise prior intellectual work in the form of a spin-off companyor in collaboration with an existing company willing to exploit intellectualproperty in the form of royalties, licences or patents, or through venturecapital.

Other new forms of partnership that have emerged include incentivisedpartnerships, with a weak form of intellectual collaboration, stimulatedby government funding aimed at developing research and development,and innovative capacity in South Africa, by encouraging technology trans-fer between higher education and industry. Collaboration partnershipshave a knowledge-based linkage in which all partners make an intellectualcontribution, but there may not be a financial relationship involved.

Finally, there is evidence of a very small number of new network formsof partnership existing in a minority of institutions. Under new globaleconomic conditions, Castells (1996) proposes, networking becomesthe fundamental form of competitive strategy—embodied in the form ofthe ‘network enterprise’. This is defined as ‘the specific form of enterprisewhose system of means is constituted by the intersection of segments ofautonomous systems of goals’ (ibid.: 171). The component parts of anetwork are both autonomous of and dependent on the network, andmay be part of other networks, and aimed at other goals simultaneously.

In South African higher education there are a small number of thesecomplex knowledge-intensive forms of partnership, which are primarilyshaped by the intellectual imperatives of both industry and higher edu-cation partners. In such strategic partnerships the research concerns ofhigher education and industry partners coincide more strongly, there ismore likely to be intellectual collaboration around the research, and thereis a stronger focus on innovation of product or process.1 Such partnerships




typically take the form of networks of multiple higher education, industry,science council and funding organisations, with distinct roles and con-tributions, that benefit mutually but in different ways. The evidence sug-gests that in South Africa such research networks can best facilitate theinnovation process in that they are most able to harness new knowledgegenerated in multiple fields of application to produce new products andsolutions (Kruss 2005). Understanding how these knowledge networksare created, their outcomes and future prospects forms the focus of thearticle.

Uneven Research Capacity, Different Higher Education Legacies

For comparative purposes it is useful to begin with a snapshot of contribu-tion of the South African higher education sector to research and innovation.In 2003–4 gross domestic expenditure on R&D in South Africa wasR 10,082.6 million, representing 0.81 per cente of GDP (DST 2005: 7).The higher education sector accounted for 20.5 per cent of the nationalR&D expenditure, with the business sector contributing the lion’s shareat 55.5 per cent and the government sector (including science councils)21.9 per cent (ibid.: 21). Table 1 illustrates trends in the higher educa-tion sector since the advent of a democratic government, highlightingthe multiple challenges institutions and researchers face. While the totalpermanent academic staff complement has remained constant, the totalheadcount of student enrolment has grown significantly, particularly thetotal postgraduate enrolment. In 2003 the total enrolment across the highereducation system was 717,793 students, which represents a gross parti-cipation rate of 16.3 per cent of the 20- to 24-year age group (Steyn andDe Villiers 2006). However, the doctoral enrolment critical to renewalof the academic labour force has grown more slowly, and does not repre-sent a large pool of potential academics.

An increasing proportion of higher education research expenditurecomes from contract income, that is, largely through contract and consul-tancy forms of partnership with industry (and government). In this con-text, concern has been expressed that accredited publication rates haveremained fairly static, and that accredited publications tend to be producedby an ageing, white male academic population (COHORT 2004). Between2003 and 2005 the twenty-one universities and fourteen technikons weremerged and restructured to create twenty-two new institutions that areproposed to be more appropriate to addressing higher education transfor-mation goals,2 creating new opportunities and challenges.




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Significantly, South Africa mirrors the global trend that a small numberof universities are responsible for the majority of high-level researchoutputs (Steyn and De Villiers 2006: 133). However, in this context, un-even capacity arises from different historical legacies and modes of oper-ation in the apartheid era. The universities and technikons in South Africa,thus, differ in their response to the partnership imperative, and in theirability to harness the innovation potential of their research in the interestsof development. Table 2 groups the thirty-five higher education institutionsat the time of the empirical study in 2003 according to their institutionalresponse to the partnership imperative (see Kruss 2005). The categoriesare based on the extent to which universities and technikons have a struc-tured3 or unstructured institutional response to industry research partner-ship, and whether they have a sound or an emergent or a newly developingresearch capacity. The data reflects differential research and innovationcapacity, as measured in the size of enrolments, the permanent academicstaff complement, the number of accredited research outputs, and thenumber of scientists rated by the National Research Foundation. It illu-strates the small number of institutions with relatively strong researchcapacity that are able to compete globally, and the small number of insti-tutions that have actively adopted an entrepreneurial approach. What isalso notable is an emergent alternative trend on the part of a few histor-ically black universities to harness their developing research potentialthrough research networks in the service of poverty alleviation and com-munity development in the most rural and isolated areas of South Africa.The largest group of institutions has laissez-faire approaches to partner-ships, in that they do not have dedicated strategies, structures or supportmechanisms, but there is a significant number of institutions that aspireto develop their research capacity and the scale of partnership with industry.

Groups of institutions share similar patterns of partnership in the high-technology fields, with only a minority able to host or lead knowledgenetworks. Understanding the differential capacity and research manage-ment approach of universities and technikons is, thus, key to understand-ing the ways in which knowledge networks are created.

A Contextualised Approach to Understanding Networks

Castells (1996) has defined a network in the simplest way as ‘a set ofinterconnected nodes’. The higher education–industry research networkhas typically been analysed in terms of three nodes of interacting partners,each constructed with varying degrees of complexity. An influential model




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describing relations between government, industry and higher educationin a knowledge economy is the ‘triple-helix’ model proposed by Etkowitzand Leydesdorff (1997, 2000). According to the traditional view, theuniversity has the functions of education and research, industry has thefunction of production, and government has the function of regulation.In the new global context, Etkowitz and Leydesdorff suggest that a triple-helix model is the most appropriate for reflecting the complex relationsbetween the three partners. That is, each institutional sphere takes onnew roles alongside their traditional roles: universities assume a role ineconomic development, translating research into economic activities;industrial firms conduct R&D activities laterally in cooperation with agroup of firms, sharing knowledge to become more competitive; andgovernments play new roles to promote innovation, in some cases adopt-ing a more interventionist and in others a more laissez-faire mode. Thecritical issue is to examine the complexity of the relations between thethree interconnected nodes, between the three strands of the triple-helix,in distinct national contexts.

We have noted the complexity and diversity of the higher educationstrand in the South African context. The work of Wickham (2002) andMouton et al. (2003) provide examples of the limits of the research trendto aggregate industry perceptions of factors that inhibit or constrain re-search collaboration with higher education. Such studies are typicallyused to inform higher education partnership and network practice, but inaggregating they tend to oversimplify the complex nature of the industrystrand. That is, innovation and knowledge production are rooted in humanlearning within a firm, and, consequently, involve a multitude of deter-minants that are difficult to quantify. Industrial sectors vary in their de-mands for knowledge-intensive collaboration with higher education, andin their propensity and capacity for technological innovation. Withoutan explicit focus on technological and sectoral variables, we can onlyunderstand networks and partnerships in fairly general and abstract terms.

The Human Sciences Research Council (HSRC) study thus adopted theconcept of embeddedness (Granovetter 1985), which proposes that theinstitutional framework of an enterprise shapes the actions, expectationsand beliefs of the social actors entering into a strategic alliance withhigher education partners. Indeed, each of the partners participating inthe network are embedded in distinct institutional contexts (Grabher1993). Differences in the respective structural dynamics, mode of oper-ation and strategic objectives of the partners at each node contributes to




the complexity of the interface within the network, with the potential forconflict, tension and power asymmetries.

Thus, analysis began from a socialised account of the partners at thethree nodes constituting the network—the enterprise/s, the research en-tity/s based in universities or technikons, and the intermediary partnerssuch as science councils, funding or regulatory bodies, whether publicor private sector. Castells (1996) contributed two further useful concepts,that a network’s performance will depend on its ‘connectedness’, on astructure to enable communication between its component parts, and onits ‘consistency’, a sharing of interests between the network’s goals andthe goals of its component parts. The research attempted to understandwhat drives participants to pursue a network, how it is structured, howthey interact, how each benefits, and what the limitations of power asym-metries on the network are, against an understanding of the respectiveinstitutional contexts of the (multiple) partners at each node.

The following sections focus on cases in the biotechnology sector,being relatively new in South Africa, and, by way of contrast, in the re-latively mature new materials development sector. It shows the complexnature of the partners at each node of the network, and of the structureand dynamics of the network interaction that result.

Understanding Biotechnology Networks

The seven cases illustrate the complex ways in which the structure andnature of networks are shaped by the ‘embedded’ nature of each partner,of the policy, industrial and university contexts in which enterprises andresearch entities collaborating in biotechnology or new materials devel-opment research operate. In the process they highlight the richness andvariability of South African higher education responses to contemporarychallenges. Table 3 provides an overview of the focus and partners in eachcase, and is intended as a useful reference point throughout.4

Multiple Layers of Determinants

Drawing from a comparative analysis of the seven cases, it appears thatthe creation of knowledge networks in South Africa is strongly shapedby the competitive dynamics of the industrial sector. The cases illustratethat it is critical to understand the industrial sub-sector within which an




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enterprise operates, the dynamics of competition operating, and the cen-trality of research and innovation to a company’s competitive strategyor insertion in a ‘value chain’ in order to understand what drives or con-strains individual firms to seek research networks. These dynamics differwith the maturity of industrial sectors, of the technology fields on whichthey draw, and of the supportive policy context within which they operate.However, the conditions created by government policy steering mecha-nisms to promote science and technology, innovation and partnershipimpacts in various ways on what is possible. The extent to which the highereducation context in which a research entity is located was supportive ofpartnerships—in terms of managerial, administrative, financial and intel-lectual property frameworks—further determined which institutions werefavoured in creating networks, as did the reputation of the individual‘academic champion’ and the research entity itself. These claims will besubstantiated later, through brief descriptions of the two sets of cases.

Four Biotechnology Cases: From EnhancingAgricultural Products to Bioinformatics

Biotechnology in South Africa is historically well established in first-and second-generation activities, but there is not yet significant industrialdevelopment drawing on third-generation technology. This may changein the light of a strong government policy commitment to build a bioeco-nomy as part of a national strategy for enhancing global competitiveness(see Mboniswa 2002; Walwyn 2003). For instance, the development of aNational Biotechnology Strategy (DACST 2002b) has framed the estab-lishment of three Biotechnology Regional Innovation Centres, nationalsupport structures such as a National Bioinformatics Network, and theallocation of considerable funding through programmes such as THRIPand the Innovation Fund. Such initiatives provide a substantive policyand financial environment to support the efforts of individual institutionsand enterprises.

Here we found networks incentivised by government schemes to col-laborate around strategic research leading to commercialisation, as wellas pre-competitive research to improve the quality of upstream productsand processes. The locus of control driving the creation of these fournetworks lies more strongly in the university itself than do the networksin new materials development. This is in the face of a small, emergingindustrial sector in South Africa, and given the nature of the bioeconomyglobally, which has its roots in technology transfer and spin-offs from




university and science council laboratories. The active role of governmentintermediary agencies encouraged and facilitated research cooperationin the public interest or with a strong development mandate. A brief de-scription of each of the four cases will highlight these trends.

The Water Membrane Network

The water membrane network focuses on adapting an imported capillaryultra-filtration system for potable water production to South Africanconditions. A membrane filtration process was developed by researchersbased in Stellenbosch University over the past few years, funded by theWater Research Commission (WRC), a statutorily created body that derivesits funding from levies on water use. Table 2 reflects that Stellenbosch isa historically advantaged university with a strong research capacity thatis able to harness the potential for innovation of its knowledge base.Based on this research, engineering researchers from the newly createdDurban Institute of Technology (DIT), based in another province, aredriving a research network on process development and automation, non-chemical pre-treatment, defouling and flow destabilisation strategies.The university partners conducted the fundamental research, but requiredthe skills of colleagues at the university of technology (based in multipledepartments) to optimise the system for large-scale application. A seconduniversity-based research group in close proximity to the DIT is also in-volved in a more secondary manner.

The research is facilitated by a government intermediary partner, theWRC, which provides critical funding for the research, as well as facili-tating collaboration between the partners through its contractual sup-port, influence and expertise. The higher education partners interact withenterprises—public water boards that now operate on a full-cost recoverybasis—and municipalities indirectly through the WRC. Although thisintermediary role of the WRC is not strictly part of its functions, it resolvesat least three problems faced by higher education research units in directcontact with industry. First, it allows for more realistic timetables thanthose normally demanded by industry. Second, the continuity providedby the WRC overcomes the problems associated with staff turnover inindustry. Third, the WRC eliminates the need for multiple and complexcontractual negotiations with industry partners and has greater influenceover the water industry. The WRC funding in terms of its prioritisationof water needs in the country means the research entity does not need topursue more short-term industry-defined consultancies and contracts.




The enterprise partners are public water boards whose primary researchrole is limited largely to field testing and fine-tuning of the system. Thefirst ‘client’, the Amatola Water Board, provides the necessary facilitiesand assists in sorting out minor problems in the filtration system. As such,it provides the technology with the record of accomplishment necessaryfor viable commercialisation. In turn their links with higher educationpartners allow for less R&D staff and encourage greater involvement inskills transfer and socio-economic upliftment, and allows the enterpriseto evade many of the costs and risks associated with the developmentof new technologies. However, it was clear that by simply outsourcingR&D functions to the higher education sector, industry may compromiseits capacity to absorb the knowledge necessary for product and processinnovations.

A commercially viable filtration system has important social benefitsin improving access to safe, high-quality water, particularly for smallrural communities, with considerable operating benefits. The networkstructure is long-standing, and part of a wider network, which has beenfluid over time, involving the partners in stronger or weaker collaboration,depending on the specific problem being addressed. At the heart of thedynamics of operation of the network are the strong personal ties betweenthe leaders of the two research entities. The meshing of skills (that is,analytical skills from the university, applied skills from the technikons,and technical skills from the Amatola Water Board) and associated know-ledge transfers were regarded as vital ingredients for the success. A furtherbeneficial aspect as noted by these researchers is that the network hasfacilitated greater interaction between historically white and black highereducation institutions, and between higher education and the community.

The primary outcomes of the network are the training and employmentof students, the registration of patents, and the development of innovativeproducts. The partners are currently attempting to establish the commer-cial viability of the new technology in order to attract significant venturecapital, at which point, in terms of a memorandum of understanding,there are plans to form a joint venture to regulate relations, while thetechnology will be licensed to users through the Water ResearchCommission.

The Mycorrhizal Network

The mycorrhizal network focuses on the isolation and production ofquality arbuscular mycorrhizal fungal (AMF) innoculants, and their ef-fective application to particular plants and soil types. The benefits of




AMF are either increased growth and yield of crops, or improved fitnessto conditions (such as drought stress tolerance). The network is organisedas a consortium, driven by relatively autonomous multidisciplinary teamsprimarily based in five universities around the country, at considerabledistance from one another. The focus is on the innovation of process andtechniques, and on accruing intellectual property rights for the isolationand large-scale production of indigenous AMF inoculants for applicationin a range of sectors as a basis for commercialisation. The research isfacilitated by government incentivisation funding in the form of the Innov-ation Fund, which influences the formal, contractual structure of the net-work. Full funding for the research was obtained for a period of threeyears, ending in December 2003.

The network structure is shaped by its ‘dual status’ as intellectual pro-perty development enterprise and Innovation Fund project administrativevehicle, and it could be described as constituting ‘a R&D company, whichis run as a business’. However, its primary focus at this stage is researchand not profit.

The enterprise partners, agricultural concerns, have a limited role inmonitoring of field trials and collection of data, while the university-based researchers interpret the results with a view to product validation.These enterprises act more like prospective clients than knowledge-basednetwork partners, leading to greater higher education insularity in thestructure of this network. Intermediary organisations also do not influencethe nature and direction of research activities in a direct way, and in ef-fect operate as secondary enterprise partners or prospective clients. Forexample, the relationship with Agricultural Research Council researchinstitutes involves applied mycorrhizal research such as investigatingthe application of mycorrhisa in the case of emerging farmers who cannotafford fertilisers, as well as collaboration around field trials.

At the time of the research the network was faced with the challengeof reconstituting itself as a fully-fledged commercial entity, a processthat has complex legal implications and far-reaching consequences forits future. Although by all accounts very good results have been obtained,commercialisation is still some way off because of the variable status offield trials. The network faces critical challenges and tensions in termsof developing a market for their product, accessing capital to move fromthe R&D to the commercialisation phase, and distributing ownership ofintellectual property rights amongst the partners. Of note are difficultiesin securing bridging finance or venture capital, attributed to the fact that




very little product awareness exists within the agricultural sector. Thus,apart from the increasing number of postgraduate students enteringmycorrhizal research programmes, there are not yet tangible productsemanating from this network, which illustrates the considerable diffi-culties of commercialisation and university-driven knowledge networks.

The Tree Protection Network

The tree protection network focuses on the pre-competitive phase of theforestry, paper and pulp industries, in relation to preventing the spreadof tree pathogens. Initially, this was reactive, but increasingly it is pro-active through attempts like cloning to cultivate trees that are resistantto pests and pathogens. Based in a world-renowned research institute atthe University of Pretoria, the network includes major forestry and articleproducing companies and timber cooperatives, alongside industry inter-mediary bodies like Forestry South Africa and the government departmentof Water Affairs and Forestry.

The network has its origins in an initiative begun in 1990, originallybased at the University of the Free State. Significantly, it moved in 1998to the University of Pretoria at the initiative of the vice-chancellor, whoenticed the director with the offer of a custom-designed building, labora-tory and apparatus. The level of support from the university was exten-sive, so that the programme subsequently transmogrified into the Forestryand Agricultural Biotechnology Institute (FABI), with the tree protectionnetwork providing one-third of its focus.

Growing healthy trees that yield quality fibre or timber is the corebusiness of all the enterprises involved, and there is willingness to col-laborate in a pre-competitive forum focused on technological innovationto ensure the competitiveness of the entire industry. The network hasgrown over the years, but has not shed any partners. It is structured as acooperative with partners joining as members, sharing concerns, whilethe research institute drives knowledge generation. The network hasfostered the production of a significant number of postgraduate theses,with thirty-five Ph.D.s in the last ten years. Industry partners—particularlyMondi and Sappi—are major funders, and funding is leveraged from theInnovation Fund, THRIP programme, National Research Foundation andthe university itself. Particularly pivotal to the balance between the part-ners at the three nodes is the charismatic and highly experienced academicdirector of the research institute. Strong consensus is that the network




provides a mechanism for achieving stakeholder objectives that one part-ner could not achieve on its own.

This case illustrates that networks are not established overnight, buttake time to develop and to flourish. While the network was formalisedin 1990, the key research that underpinned its establishment had beenongoing for at least fifteen years prior. Such biotechnology needs greaterinfrastructural investment, in the form of sustainable specialist businessdevelopment, in order to take root in South Africa. There are indicationsthat the network is a fertile breeding ground for a body of knowledgethat, without proper nurturing, may either leave the country or mutateinto other kinds of competence—biotechnologists becoming managersor moving sideways into other disciplines—in the absence of a vibrantbiotechnology industry in the country.

The Bioinformatics Network

The bioinformatics network is based at a historically disadvantaged uni-versity, the University of the Western Cape (UWC). The research entity,the South African Bioinformatics Institute (SANBI), works in collaborationwith a spin-off company, Electric Genetics, and international researchers,facilitated by government incentivisation funding and sponsorship froman international trust formed by a multinational pharmaceutical corpor-ation. In 2001 there were only five bioinformatics professors in SouthAfrica, three of whom were at SANBI, at that time the only formal centreof bioinformatics in South Africa. Electric Genetics was originally foundedin 1997 as a spin-off company to commercialise technologies for analysingthe human genome developed at SANBI, and is the first bioinformaticscompany in South Africa. The UWC is a 1 per cent shareholder in thecompany and receives royalties for products developed in partnershipbetween the company and the SANBI.5

The research at the heart of the network focuses on using cutting-edgetechnology in bioinformatics to generate solutions to biological researchproblems and to contribute to the development of software that will speedup genetic and biotechnology research. The research institute generatesnew knowledge, which is commercialised and sold by the spin-off com-pany, largely to pharmaceutical companies to reduce the risks and costsassociated with their R&D. The two organisations have created a fast,open source development process whereby tools are designed and rapidlyprototyped. One tangible output of the project is EnsMart, a data retrievaltool that generates lists of biological objects (for example, genes) from




data held in the Ensembl database. Another example of SANBI’s outputis the development, analysis and distribution of the database known asSTACK Human Gene Index, an index of expressed human genes de-veloped as part of a research contract funded by the United States NationalCenter for Genome Resources.

The network is reportedly structured according to the ‘academic way’.SANBI places great emphasis on peer review processes, particularly inthe form of academic publications and presentations in academic sem-inars and conferences, in order to raise its research profile and establishits credibility in the scientific community nationally and globally. It alsogrows out of the commitment to open source arrangements that will serveas a basis for research and discvery, and ultimately a wide range of prac-tical applications.

SANBI is involved in a range of capacity-building and academic teach-ing programmes, including training of postgraduate students, through amaster’s course in bioinformatics that started in January 2002. Generaland specialised courses are organised, such as a capacity-building bio-informatics training course to promote the capability of African scientiststo apply cutting-edge DNA technology and genome information to trop-ical diseases research. In 2001 SANBI was also centrally involved in thecreation of the South African Genomics Platform, a network of genomicscientists who collaborate in researching key areas where genomics andbioinformatics can have an impact on South African science and be ofnational benefit. It facilitates pooling of resources to provide the capacityto tackle large genomics projects that would otherwise be intractabledue to the scale of the investment required.

From the point of view of commercialisation, Electric Genetics is seento be at a disadvantage relative to its competitors because it is geograph-ically remote from the locus of innovation and cutting-edge science, andthere are few customers in South Africa. The extent to which local industriessuch as the pharmaceutical industry can benefit is limited, largely becauseof the limited capacity for manufacturing pharmaceutical products.

A serious limitation identified by researchers relates to the shortageof expertise in bioinformatics, which will not be overcome easily as ex-pertise takes time to build and grow. Sophisticated software needs requiresupercomputing capabilities that exist partially, but need to be extended.This capacity is expensive and cannot feasibly be developed by individualinstitutions. The National Bioinformatics Network has been establishedto facilitate the development of such capacity and undertake negotiations




with national players such as the Department of Communications, Telkomand others. Limitations in South Africa’s communications infrastructuremay, thus, constrain further development of this network.

Drivers of Biotechnology Networks

In general, funding criteria and pressures to generate research income,institutional missions and a desire to enhance research specialisms encour-aged academics to undertake collaborative research and pursue networksin biotechnology. This intersected with the primary driving motivationsfor industry and intermediary partners—the importance of innovation tocompetitiveness and efficiency, the high costs of R&D, and statutoryobligations. The lack of a developed bioeconomy in South Africa or ofventure capital and bridging funds were identified as significant barriersfor the success of networks pursuing commercialisation.

Understanding the New Materials Development Networks

In contrast, new materials development is a more mature field than bio-technology in South Africa, both in terms of research and in relation tothe industrial sectors with which it is involved. However, governmentpolicy and financial support for the sector was cut in the early 1990s,leading to a loss of the research capacity built up in the apartheid era,given the strategic emphasis on materials research for the military, energyself-sufficiency and food security sectors (Knutsen 2002). Knutsen arguesthat many established industry partnerships disappeared, the existingmaterials capacity was significantly eroded, and the research communityfragmented into pockets of activity. There are recent signs—for example,the development of an Advanced Manufacturing Technology Strategy(AMTS 2003) and the formation of a South African NanotechnologyInitiative (2002)—that the situation is beginning to change. There areexciting instances of network collaboration around fundamental and stra-tegic research to expand downstream applications of primary resourcesto create new markets, but at the same time there are signs that old contractforms of partnership continue to operate in ways that are not entirelybeneficial to the interests of the higher education partner.

The new materials development networks differ from the biotechnol-ogy networks, particularly in terms of the degree of secrecy surroundingthe research.6 Indeed, although selected as a network, it became evident




that one case, the recovery of metals, in fact operated as the older organ-isational form of a dyadic contract partnership. In a mature industry suchas platinum mining, the enterprise has chosen a strategy of improvingrecovery operations to address the inefficiency of a specific upstreamoperation in order to enhance competitiveness. The company has signifi-cant R&D capacity, but not in relation to the electrochemical recoveryof minerals, hence, it turned to a university that offers such research cap-acity. The relationship is governed by strong confidentiality agreements,and is essentially limited to supervision of the master’s theses of twoemployees of the enterprise. There is virtually no collaboration betweenthe industry and higher education partners around knowledge creation,and both the university and the students are severely restricted in termsof publishing the research in order not to infringe the company’s pro-prietary knowledge and future competitiveness.

The New Materials Cases: Enhancing Downstream Applications

Starch-based Plastic Compounds Network

In contrast to the earlier two networks, this a complex network formedaround developing a biodegradable plastic from cornstarch, which hasequivalent properties too, but is cheaper than, petroleum-based plastic.The primary enterprise partner is a large company, African Products, aproducer of cornstarch, motivated to invest in R&D by concerns to expandthe downstream, value-added applications of its product. Significantly,researchers from a government science council, the Council for Scientificand Industrial Research (CSIR), serve as an intermediary link betweenthe primary enterprise partner and the primary research partner, the Insti-tute of Applied Materials, also based at the University of Pretoria. Thenetwork includes researchers from international networks, as well assecondary enterprise partners, including a spin-off company from theuniversity, Xyris Technology, which was established by the director ofthe research institute. The research is funded by the government THRIPprogramme, and, hence, there are significant matching contributions fromthe industry partners.

The university partner brings research expertise and capacity (includingstudents) to the network, the science council brings polymer expertise,facilities and equipment as well as an interest in commercialisation, thespin-off enterprise partner brings sponsorship as well as expertise andmanufacturing capacity in the area of additives, and the primary industry




partner brings venture capital, the capacity to commercialise the productand international connections. The goal of the partners, to produce com-mercially viable cornstarch plastic products, could not be achieved with-out the network, as none has all the capabilities and facilities necessaryto accomplish the task. For the university partner the major knowledgebenefit is in advanced polymer compound technology, the opportunityfor students to be involved in cutting-edge research in the field and pub-lishing in scientific journals. The industry partner benefits from providingthe funding and being able to steer the research and set the targets for aproduct it is keenly interested in producing. Although the industry partnerhas research laboratories, these are devoted to food technology research,and it does not have the facilities nor expertise in polymer compounds.

At the broadest level the project has the potential to contribute to na-tional and economic development. Success would have important en-vironmental benefits in that it would produce compostible plastics, reducethe production of non-biodegradable waste, reduce the use of petrochem-icals, and ultimately, in so doing, is likely to reduce the production ofgreenhouse gases. In addition, the production of compostible plastics islikely to create jobs, which will depend partly on the uptake of the projectby companies internationally, since the market in South Africa is relativelysmall. African Products is well positioned to exploit possible internationalmarkets as is Mondi, a company with whom the network is collaboratingaround the production of compositible seedling trays, the first marketableproduct to be produced by an IAM student in the CSIR laboratories.Tests are still being run on its biodegradable and compostible qualities,and it is not yet ready for commercial-scale production. Possible usesfor pot plant holders, golf tees and food containers are being explored,and there is a food store interested in replacing polystyrene used forpackaging with a biodegradable product.

The industry partner believes there is benefit to be gained in being in-volved in the research process in order to have the competitive advantageonce a suitable compound is found. They will then be able to lay claimto the technology put in a system to supply the starch additive. There isa strong belief that project goals can be achieved, but there is also recog-nition that some research efforts go unrewarded and that it is necessaryto keep investing in research even if there is project failure. Polymercompound research will continue, but perhaps not in this direction, if noprogress is made within the limits set by the THRIP funding. Fundingand time thus appear potentially more threatening to this network thancompetition from a different source.




The Beneficiation of Phenolics Network

The beneficiation of the phenolics network is similarly driven by theconfluence of industry interests to expand downstream applications ofphenols (pure chemicals distilled from chemical raw materials that havea wide range of applications in the fine chemicals market), with PortElizabeth Technikon’s interest in improving the synthesis methods forbeneficiation processes. The network is centred on a joint venture com-pany established by SASOL (a major South African company, a formerparastatal, producing oil from coal) with an American company, to addvalue to its raw materials. The enterprise has its own limited R&D cap-acity, and can draw on that of SASOL, but neither is geared towards thistype of research. Hence, in order to cut costs, minimise risks and avoidduplication, they turned to higher education institutions for research input.The research yields more new processes and products than it can strateg-ically pursue, hence, the network includes a few small start-up companies,and a national chemical technology incubator, based at the technikon,pursuing commercialisation of the technologies yielded.

The nature of the chemical industry in South Africa has a bearing onthe networks that have evolved. The chemical sector has shrunk con-siderably in the last ten years because of the limited apartheid strategy tomake the country self-sufficient rather than to become globally com-petitive. The chemical industry is dominated by commodity-producingcompanies and very little is done to develop the downstream, value-addedside of the industry. In its role as a sectoral intermediary, the technikon-based incubator partner, Chemin, strives to develop downstream applica-tions by building cooperative relations between it and the establishedpart of the industry. Other research partners include the science council,the CSIR, which brings its pilot manufacturing facility to the network,and a cognate university research unit, based in another province, but witha distinct, complementary set of expertise, skills and equipment. Thenetwork has, thus, developed on the basis of specialisation and avoidingduplication, but of pooling resources to address the technical, financial,marketing and other complexities involved in the process of beneficiatingphenolics. Obstacles identified include a poorly developed venture capitalmarket and a reluctance by banks to take ‘risks’, government-fundedagencies that tend to focus on the expansion of existing industries andproducts, the lack of an ‘entrepreneurial’ culture in the country, and theelaborate and time-consuming regulatory process associated with theestablishment of a new business.




Understanding the Creation of Networks

Essentially, in these cases knowledge networks are created when enter-prises—large or small7—are willing to enter into cooperative allianceswith higher education and intermediary partners, to meet their complexknowledge and technology needs, in order to enhance future competi-tiveness. Or they happen when entrepreneurial academics enter intocooperative alliances with higher education, industry and intermediarypartners to meet their complex knowledge and technology needs in orderto commercialise their knowledge products. As Klerck (2003) has phrasedit, the dynamics of competition in a particular product market or industrialsector are closely linked to the dynamics of cooperation found.

Of course, the knowledge and technology needs of the enterprise donot shape the structure and dynamics of a network alone. Rather, theyintersect with the levels of expertise in higher education, in terms of theexistence of a critical mass of academics in a research specialism, butequally with the motivation for and tacit knowledge of managing researchpartnerships with industry. The cases show that this is usually embodiedin an academic entrepreneur, who is the linchpin in ensuring the ‘con-nectedness’ of many of the networks. Closely linked is the significanceof centralised higher education institutional support, whether financial,legal or administrative. Higher education institutions with strong researchexpertise and management structures appear to be more effective in sup-porting academics in the creation and maintenance of networks.

The involvement of an intermediary partner drawn from the publicsector in a range of ways provides a further layer of complexity that mayintersect to determine whether a network is created, and the specificstructure and dynamics of its functioning. The intermediaries take a num-ber of forms. Actively involved in funding, knowledge generation or evencommercialisation, were market-driven government science councils suchas the CSIR. Government departments or agencies such as the Water Re-search Commission were involved in directly funding and shaping thedirection of research, or even in mediating relationships within the net-work. More passively involved in funding only, shaping the formal con-tractual structure of networks, were government funding programmessuch as THRIP, the Innovation Fund or the Godisa incubator schemes,and international government agencies with bilateral agreements.

The intersection of interests—or ‘consistency’—gives all partners a stakein the research project at the heart of the network, and builds the levels




of trust required for it to ‘work’ or ‘succeed’. It was evident that althoughmany of the networks studied were yet to realise their goal of deliveringa finite innovation of product or process, networks in South Africa canlead to substantial benefits in the form of increased profit for industry, animproved research profile for higher education, and wider socio-economicbenefits. A key intangible benefit identified by both industry and highereducation partners was broadening their organisational ‘learning inter-face’. Conversely, conflict and tension were evident within those networksthat were not constructed on the basis of sufficiently sound organisational‘learning’, particularly as they approached the point of commercialisation.Such are the multiple interdependent determinants shaping the creationof knowledge networks. What does the analysis suggest is significant toinform the creation of knowledge networks in a late developing countrylike South Africa on a wider scale?

Problematising the Notion of Innovation

The cases suggest that we need to foreground an expansive and nuancedconception of innovation. The South African R&D strategy is committedto science and technology for poverty reduction in the interests of themost marginalised as one key thrust, and identifying new technologyplatforms in line with global trends as another. The cases are a reminderof the need to balance the two. Cutting-edge innovation includes the socialgood, and a wide range of degrees of innovation, not only prioritising re-search oriented to high-technology global competitiveness or that whichis new to the world.

There were clear-cut cases of potential synthetic innovation of product,such as the cornstarch plastic, and cases of potential synthetic innovationof process, such as the genomic information, computational biologyand analytical tools developed in the bioinformatics project. There werealso, however, cases of incremental innovation, particularly those basedin technikons, that appeared to be ‘improvements’ on existing technology(such as the water membrane technology) or adaptation of technologiesdeveloped elsewhere in specific South African or regional contexts (suchas the mychorrhizal research). However, the potential outcome of projectslike the water membrane technology, which can have a widespread impacton the quality of life of many, particularly those living in rural areas thathave not had adequate access to water resources, means that it is a critical




innovation in a late developing country context like South Africa. It isimportant for the goal of promoting a South African knowledge economythat policy makers and higher education managers value the entire spec-trum of innovation.

Second, the cases provide important insight into the relationship be-tween networks and the promotion of innovation. Incremental innovationnew only to a specific firm may arise out of contract or consultancy formsof partnership, and does not necessarily require a network. There is con-siderable evidence from the study that contracts may be an important‘step’ in organisational learning as an industrial sector matures. However,the tree protection network that can contribute to enhancing the qualityof the core product of the entire timber and paper sector is one exampleof the value of the collaboration and cooperation inherent in the networkform of organisation. Significantly, the project operates to the benefit ofthe higher education partner by developing a new field of research ex-pertise, attracting students, and generating knowledge and publications.The new organisational form of the network brings partners at each nodetogether in a way that can lead to innovation and economic growth, butat the same time further advance the goals of higher education.

The Need for a More Nuanced and Targeted Approach

The cases provide evidence of the significant role played by multiplegovernment departments and agencies as intermediaries shaping the cre-ation of networks. A key implication of the analysis is that for a develop-mental state to play a more expanded role in facilitating networks, publicsector stakeholders require a more sophisticated and informed analysisof where they can best impact than is currently the case. That is, thecomplex intersection of industry, higher education and intermediarystrands of the ‘triple helix’, shaping knowledge networks suggests thatwe need to understand the ‘embeddedness’ of institutions, particularlyof enterprises, in greater depth to inform cross-sectoral steering measures.

Understanding the embeddedness of the research and technology needsof specific industrial sectors may inform more refined ways in which thereach and coverage of government intermediary agencies like THRIPand the Innovation Fund can be expanded. Or it may suggest better-targeted ways in which incubator schemes can draw more small, mediumand micro enterprises (SMMEs) into innovation programmes. It may allow




better coordination of the mechanisms and programmes adopted by dif-ferent government departments to promote research and innovation inthe higher education sector. It may inform regional innovation strategiesin the light of growing evidence to suggest the significance of provincialand local government levels.

Such an understanding is equally significant for research managersand leaders in higher education institutions to facilitate cross-sectoralinterventions across the system. Individual institutions need to developtheir own internal institutional coordinating strategies and mechanisms,to promote network forms of partnership across a greater spread of theirresearch entities. National higher education associations need to coord-inate strategies more effectively across the sector. The full implicationsof the analysis for the strategies and practices of higher education, how-ever, must remain the subject of another article.

Thus, in conclusion, the major insight offered for countries grapplingwith similar challenges and dynamics is the value of undertaking such acontextualised analysis. The ideal enshrined in South African policy, ofthe desirability of partnership between higher education and industry,was subjected to an empirically informed analysis of the complexity ofcreating knowledge networks. Analysis of the cases underscores the valueof researching what drives enterprises in specific industrial sectors, re-searchers in universities with differentiated research and innovation cap-acity, and intermediary partners with diverse public goals, to seek networkforms of partnership. Understanding the embedded nature of networkcreation and dynamics, and the success or limitations that result, can in-form how mutually beneficial networks may be facilitated by better tar-getted, more nuanced cross-sectoral interventions.

NOTES

1. Innovation: ‘The application in practice of creative new ideas, which in many casesinvolves the introduction of inventions into the marketplace. In contrast, creativity isthe generating and articulating of new ideas. It follows that people can be creativewithout being innovative. They may have ideas, or produce inventions, but may nottry to win broad acceptance for them, put them to use or exploit them by turning theirideas into products and services that other people will buy or use’ (DACST 1996: 15).

2. The system now consists of eleven universities, six comprehensive universities andfive universities of technology (see Council on Higher Education 2004).

3. For instance, research, intellectual property or partnership policies, research manage-ment offices, technology transfer offices or commercialisation offices.




4. For each case study an institutional profile of partner organisations at the three nodeswas compiled, from Web sites and interviews. Semi-structured face-to-face interviewswere conducted with senior management and research staff at the primary university,industry and intermediary partners, and telephonic interviews were conducted withthe subsidiary partners. The interviews focused on developing a profile of the partnerand on understanding of the dynamics of the network. A case study report was com-piled, and comparative analysis of the cases in a specific technology field against thepolicy and industrial sector context was first conducted, followed by a comparativeanalysis of trends in the three fields.

5. So far UWC is reported to have received close to R 1.5 million from Electric Genetics(Business Day 2003).

6. A number of networks selected for inclusion refused to participate in the study ongrounds of confidentiality agreements surrounding their research.

7. Firm size is commonly believed to influence the nature of networks, but the evidencefrom the cases supports Audretsch’s (2003) argument that the relative innovative ad-vantage of small and large firms varies across industries. However, he shows that theevidence increasingly suggests that strategic partnerships may be more important forsmaller firms than for larger corporations with access to their own R&D. In the SouthAfrican case 66 per cent of THRIP industry partners in biotechnology were SMMEs,58 per cent in ICT and 51 per cent in new materials projects (HSRC 2003).

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Further Readings

Adam, R. (2003), ‘The National R&D Strategy and Utilisation of Research Findings’.Presented at NACI Conference, 9 October, Midrand, South Africa.

Boshoff, N. and J. Mouton (2003), ‘Science Policy Indicators, in HSRC’, in Human Re-sources Development: Education, Employment and Skills in South Africa. Pretoria:HSRC Press and East Lansing: Michigan State University Press.

Itzkin, E. (2000), ‘How to Compete in the Perpetual Innovation Economy’, South AfricanJournal of Information Management, 2(1), pp. 1–10.

Lorentzen, J., A. Paterson, G. Kruss and F. Arends (2005), ‘Warm Bodies, Cool Minds:Counting Innovative Human Capital in South Africa’. Presented at DRUID 10thAnniversary Conference, Copenhagen Business School.

National Research Foundation, South Africa (2005), Facts and Figures 2005. The NRFEvaluation and Rating System. Pretoria: National Research Foundation.

