Parliament looks at innovation

By Leon Engelbrecht for Department of Science and Technology
Johannesburg, 29 Jan 2008

The Department of Science and Technology (DST) claims its new Technology Innovation Agency (TIA) Bill will boost innovation in SA. However, innovators say that will not be the case if the current language gets enacted.

The DST has spent the last few years creating a superstructure called the "national system of innovation" to improve the country's capacity to translate local research and development into commercial products and services.

To do this, the department published a White Paper on Science and Technology in 1996, a Research and Development Strategy in 2002 and an Advanced Manufacturing Technology Strategy in 2003.

The TIA Bill seeks to turn words into action. DST director-general Dr Phil Mjwara says local innovators face many challenges, including a lack of access to venture capital, poor management of intellectual property rights and poor business development skills.

Most industry submissions acknowledge this is the case and concede there is a role for TIA, but disagree with the way the DST has gone about it. One association, AfricaBIO, said it believed the Bill in its current form was "authoritarian, oppressive, and would lead to the further decline of innovation".

Facilitation and venture capital

Mjwara countered that the TIA's primary role was facilitation and the provision of venture capital to fund research ranging from the basic to the advanced. He added that there was not currently "any huge venture funds" available for innovative research. Available private funding only covered the research and start-up phase of projects.

The DG and other officials further added that the DST had consulted "a number of venture funds" and from this had ascertained that the TIA would not conflict with any other agency. On the contrary, they would be "delighted" to support the mooted agency by establishing a public-private venture capital partnership.

Tsietsi Maleho, corporate affairs manager at The Innovation Hub, supported Mjwara, saying it was well established that small and emerging companies based on technology, research and development were the drivers of a knowledge economy. The Innovation Hub is part of Blue IQ, a Gauteng government agency. The Hub is located near the Council for Scientific and Industrial Research (CSIR) campus, in Pretoria. The CSIR, in its briefing, also supported the establishment of the TIA.

Maleho touted Finland as a country that successfully managed to change its economy by creating an enabling environment for innovation and urged that the example be replicated. Although mobile phone maker Nokia is arguably Finland's poster child in that regard, no South African ICT company addressed Parliament on the Bill.

Mjwara, in response, urged the committee to be careful when it looked at international best practice. It was, he said, imperative to look at what those countries did when they were at a similar state of development to SA.

Contrary views

In its written submission, AfricaBIO, a non-profit biotechnology stakeholders association, cautioned the TIA Bill seemed to be modelled on the same institutional structures as "the current controversial and failed Innovation Fund".

It added that the Bill "needs some fresh ideas and a completely new institutional structure in order to be more successful than its predecessor".

"Also, provisions pertaining to the TIA taking up equity in companies and being represented on company boards are completely counter-productive and will drive entrepreneurs overseas."

The AfricaBIO submission also said a recent Organisation for Economic Cooperation and Development report had warned that SMMEs are sidelined in the current local innovation system - a weakness the Bill perpetuated.