R&D spend up to R14bn

By Leon Engelbrecht for Department of Science and Technology
Johannesburg, 28 May 2007

Research and development (R&D) spend in SA is on the rise, says the Department of Science and Technology (DST).

Its 2005/6 R&D survey, details of which were released on Friday, found gross expenditure on R&D (GERD) now stands at R14 billion, a rise of R2 billion on the year before.

"This means R&D expenditure, expressed as a percentage of gross domestic product (GDP), has risen from 0.87% for 2004/5, to 0.91% for 2005/6, representing a new high of R&D intensity in the country," says DST spokesman Nhlanhla Nyide.

"If the level of growth of R&D expenditure in relation to GDP is maintained, we are confident the target of attaining a national level of R&D expenditure equivalent to 1% of GDP by 2008/9 will be attainable," he adds.

The survey is the fourth the HSRC Centre for Science, Technology and Innovation Indicators has conducted for the DST.

The department could not immediately provide data on R&D in the ICT industry. However, it says the survey data forms a key resource for national science and technology policy by providing an "evidence base for monitoring, benchmarking and planning around the R&D financial and human resource inputs to the national system of innovation".

The survey is carried out annually according to the international guidelines provided by the Organisation for Economic Co-operation and Development.

SA's R&D expenditure, as a percentage of GDP, is slightly less than that of Hungary for 2005 (0.94%) and is more than that of Portugal (0.81%), but lags far behind the leading EU countries such as Sweden (3.86%) and Finland (3.48%). The level for Brazil is 1%, while that for Russia is around 1.1%.

The DST says the business sector increasingly plays the most important role in performing competitive R&D in the country, and business sector expenditure on R&D has continued its robust growth, accounting for 59% of GERD.

"This level compares favourably with that of industry R&D performance in European Union countries that averaged 63% of member state gross R&D expenditure for 2005," Nyide says.

Government (comprising the science councils, some state departments and public research institutes) and the higher education sector spent almost equal amounts on R&D - at around 20% of the total.

The DST anticipates that reported business sector R&D expenditure will show yet further growth as a result of the enhanced R&D tax incentive.

The Revenue Laws Amendment Act of 2006 allows companies to deduct 150% of R&D expenditure. "We expect that this change, effective from 2 November 2006, will incentivise company expenditure on R&D and make SA a place attractive to foreign-sourced R&D activity," Nyide adds.

"While we are pleased to note the increased availability of R&D personnel, there is no room for complacency in regard to this prized resource. Skilled people are the most important inputs to the national system of innovation. The department is committed to ensuring that an adequate supply of skilled human resources, with a penchant for doing R&D, is developed in the country so that they can contribute to further growth and stability of the South African R&D base."