SA urged to make ‘extraordinary effort’ in innovation investments

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 10 Sept 2020

Private and public sector organisations are urged to make an "extraordinary effort” in investing in innovation projects, to improve SA’s state of innovation and contribute to the country’s ailing economy.

This sentiment emerged in light of the recently released 2020 South African Science, Technology and Innovation (STI) Indicators Report, which reveals the state of STI in SA has been less than ideal over the past few years.

In producing the annual report, the National Advisory Council on Innovation (NACI) reviewed the state of STI in SA over the 2017/2018 period and in a global context. It provides all stakeholders, including government, private sector, civil society and academia, with critical feedback on the country's strengths and weaknesses in the STI domain.

The gaps identified in the report provide a starting point for role-players to take SA’s national system of innovation (NSI) forward to meet the country's STI and development targets.

The report, carried out on behalf of the Department of Science and Innovation (DSI), with the support of Statistics South Africa, reflects progress on some indicators, while pointing to areas of concern in other sectors. Although SA's research system, particularly public institutions such as universities and science councils, has shown a steady increase in scientific projects and publications over many years, more recent performance indicates a decline.

Financing of the NSI across all five sectors nationally continues to be a challenge. In 2017/18, South Africa's gross domestic expenditure on research and development (GERD) as a percentage of gross domestic product (GDP) was 0.83%, which remains below the 1.5% target. In constant rand values, GERD amounted to R25.96 billion in the same period, which was a small increase from R25.19 billion in 2016/17, according to the report.

Business expenditure on research and development (BERD) as a percentage of GERD declined from 58.6% in 2008/09, to 41% in 2017/18.

GERD in the public sector increased from R4.1 billion in 2008/09 to R13 billion in 2017/18 – an increase of 85% in 2010 rand-value terms.

In the education sector, most of the doctoral degrees produced in SA are in the field of natural and agricultural sciences, with 1 051 doctorates produced in 2018. Only 7% of doctoral degrees produced are in the field of engineering.

The number of STI researchers within the business and higher education sectors increased by 14.7% and 15.7%, respectively, between 2016/17 and 2017/18.

Diverted investments

Professor Johann Mouton, director of the Centre for Research on Evaluation, Science and Technology at Stellenbosch University, says innovation investment in SA’s agricultural sectors plays a key role in improving the sector's competitiveness, through introducing technologies such as advanced manufacturing.

"Technology changes are fast-moving and are often linked to new challenges resulting from fundamental shifts in social dynamics. It would thus be prudent for the DSI to revisit its current portfolio of technology programmes, in light of recent global developments as well as the recommendations of the research foresight exercise," he notes.

In an interview on Newzroom Afrikathis week, Dr Mlungisi Cele,interim chairperson at NACI, told news anchor Stephen Grootes that investment in innovation, which should result in a significant contribution to SA’s GDP, has been on the decline for the past few years.

The COVID-19 pandemic will further slowdown investments, as government and businesses divert their funds towards other priories, he added.

“As a country, our target was to reach 1.5% of growth expenditure on innovation-focused research and development, as a percentage contribution to the GDP by 2019. But instead we were on 0.83%. Our investment in innovation is constantly declining and that’s our main concern,”Cele pointed out.

He highlighted the important role of innovation as businesses across the globe find growth opportunities during the COVID-19 crisis.

“Globally, businesses are estimated to be spending around 70% of their revenue on innovation projects, but right now in SA, the business investment proportion is well below 50%; I think it’s around 40%. So we need to invest more in innovation-focused initiatives, given the fact that business is the major performer in innovation, which would help the country to better compete globally.”