SA’s R&D spend resurges after three-year slump

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 15 Mar 2024
SA’s gross domestic expenditure on R&D is up for the first time in three years.
SA’s gross domestic expenditure on R&D is up for the first time in three years.

While spending on research and development (R&D) in South Africa slowed over the last three years, it has now rebounded.

This is according to the latest instalment of the National Survey of Research and Experimental Development (R&D survey), released by the Department of Science and Innovation (DSI), which shows an increase in R&D expenditure during the 2021/22 period.

In real terms, gross domestic expenditure on research and development (GERD) grew by 6.9% year-on-year in 2021/22, from R25.9 billion in 2020/21 to R27.8 billion in 2021/22.

The R&D survey shows GERD as a percentage of gross domestic product (GDP) was 0.62% in 2021/22, which is two basis points higher than the 0.60% recorded in 2020/21.

“Unlike the 6% contraction in GDP witnessed during the COVID-19 pandemic in 2020, South Africa experienced a notable recovery, with a 4.7% increase in GDP in 2021. The increase in GERD was driven by the R&D expenditure from the business sector.

“Nominal R&D expenditure increased in all five institutional sectors, particularly in the business sector, which increased by R3.5 billion. R&D expenditure in the higher education sector increased by R446 million, the government sector increased by R235 million, while the not-for-profit sector increased R&D expenditure by R31 million.”

The R&D survey is produced annually by the Centre for Science, Technology and Innovation Indicators, with support from Statistics South Africa, on behalf of the DSI. It provides an update on SA's R&D statistics, measuring the size, growth and composition of R&D in terms of expenditure, funding and personnel.

The survey is published a year later because it covers actual expenditure and not projections, as previously revealed by a DSI official.

Considered a champion of R&D expenditure, the business sector once again continued to drive most R&D expenditure.

The survey shows that within the business sector, it was the financial services and manufacturing sectors that spent the most, accounting for 45.7% (R6.2 billion) and 29.9% (R4 billion) of total expenditure, respectively.

The financial services sector increased by R1.9 billion, while the manufacturing sector was up by R1.2 billion in 2021/22.

Furthermore, it reveals that state-owned enterprises (SOEs) spent R421 million (25.4%) more on R&D in 2021/22, bringing their total R&D expenditure to R2.080 billion. Of this, R810 million was allocated for capital expenses on R&D.

SOEs spent R427 million on space science R&D, which is more than all other selected areas of interest.

Even though the business sector drove GERD, the survey shows government still remains one of the main sources of funding for R&D in the country.

For the period under review, government-funded R&D amounted to 52.5% (R20 billion), while business-funded R&D was 29% (R11.1 billion) and foreign-funded R&D totalled 14.5% (R5.539 billion).

“Foreign funding is the largest it has been in 10 years, contributing R1.1 billion more in 2021/22. Foreign investment appears to be generally trending upwards over the last 10 years, the majority of it directed to the higher education and business sectors.”

At provincial level, Gauteng contains most of the R&D enterprises across all institutional sectors in SA, together contributing 41.1% (R15.7 billion) of GERD. However, the province’s contribution dropped proportionately by 2.8 percentage points in 2021/22, even though there was a nominal increase in expenditure.

Western Cape and KwaZulu-Natal made up the second and third highest contributions, with R10.2 billion (26.6%) and R3.7 billion (9.7%), respectively.

The provinces of Mpumalanga and the Free State saw increases in R&D expenditure of R557 million (1.2%) and R491 million (0.8%), respectively.

Those doing the work

According to the report, R&D personnel grew across all sectors, with the headcount going up by 2 857 (an increase of 3.5% year-on-year) to 85 061 in 2021/22. Researchers accounted for 1 716 of this figure − an increase of 2.8% year-on-year.

Enterprises in the business sector employed 917 new R&D personnel; however, they shed 140 researchers.

R&D personnel increased by 1 657 in the higher education sector, 155 in the government sector and 79 in the science councils sector. The non-profit sector recorded an increase in R&D personnel headcount of 49.

In 2021/22, 1.9 full-time equivalent researchers were employed for every 1 000 R&D workers − an increase from the 1.8 reported in 2020/21.

The ratio of female researcher headcounts as a percentage of total researchers, including doctoral and post-doctoral fellows, rose by 0.4 percentage points to 47%.