SA’s R&D expenditure climbs to R38bn

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Spending on research and development (R&D) in SA is steadily on the rise, although at a slower pace than before.

This is the finding of the latest National Research and Experimental Development Survey released by the Department of Science and Innovation (DSI), showing an increase in gross expenditure on R&D (GERD) during the 2017/2018 period.

This comes as government leaders, including communications and digital technologies minister Stella Ndabeni-Abrahams, have stressed the importance of local innovation, research and development to rejuvenate critical industries.

In terms of the survey, the country’s GERD amounted to R38.7 billion, based on the rand value for the period in review. In constant 2010 rands, GERD grew by 3.1% year-on-year to reach R25.9 billion.

According to the report, the GERD in 2017/2018 is a nominal 8.5% increase over the R35.6 billion recorded previously. “GERD as a percentage of the country's gross domestic product, an indicator of R&D intensity, remained relatively unchanged, moving up one basis point from 0.82% in 2016/2017 to 0.83% in 2017/2018.”

The report is produced by the Centre for Science, Technology and Innovation Indicators, with support from Statistics South Africa, on behalf of the DSI.

The annual survey provides an update on SA's R&D statistics, measuring the size, growth and composition of R&D in terms expenditure, funding and personnel.

It identifies the sectors that perform R&D in the country and groups them into five institutional sectors: business enterprise, government, higher education, non-profit and the nine science councils established through Acts of Parliament.

The DSI’s Godfrey Mashamba previously explained this survey is published a year later because it covers actual expenditure and not projections.

Top performers

Earlier this year, department minister Blade Nzimande urged the business sector to continue to invest in research, technology and innovation, saying this will result in long-term benefits for the country.

True to form, the business sector has remained SA’s largest R&D performer, with expenditure on R&D reaching R15.8 billion for the period in review.

The increase in R&D expenditure in the business enterprise sector was driven mainly by growth in the banking sector, reveal the survey results.

“The composition of business R&D has changed over time per major industrial category, mostly in line with broader changes in the structure of the economy. There have been robust increases in business expenditure on R&D (BERD) attributed to the services industries, while manufacturing and mining-related R&D has declined.

“R&D in the financial intermediation, real estate and business services sector now dominates, contributing about 48.8% of BERD in 2017/18. This sector's R&D spend has surpassed that of the manufacturing sector since 2011/2012.”

Even though the business enterprise sector dominates R&D expenditure, it is government, inclusive of science councils and higher education, which has remained the largest funder of R&D at 46.7% of total investment in 2017/2018.

The business sector is now in second place, contributing 41.5% of the country's GERD. Foreign sources provided 10.2%, with other local sources accounting for 1.6% of GERD.

The survey noted that growth of government funding of R&D is currently at R18 billion. “Funding of R&D by the business sector, which has been slowing down since 2013/14 to reach a level in 2017/2018 of R16.067 billion, is starting to show some signs of growth.

“After decreasing in 2016/2017, funding of R&D by other sources, both local (R0.639 billion) and foreign (R3.937 billion) in 2017/2018, have recorded the largest decreases in 10 years.”

R&D personnel

According to the survey, the headcount of R&D personnel, which is inclusive of doctoral students and post-doctoral fellows at universities, increased by 4 233 (5.3%) to 84 262 in 2017/2018, from 80 029 reported R&D personnel in 2016/2017.

This robust increase, says the report, is mainly driven by the net intake of researchers, which increased by 5 079 headcounts in 2017/18.

“After decreasing by 172 in 2016/2017, the number of technicians has decreased in 2017/2018 by a further 127 headcounts. The time spent by researchers, including post-doctoral fellows and doctoral students, on R&D increased by 1 726.3 full-time equivalent (FTE) from 42 533.0 to 44 259.3.

“The number of FTE researchers per 1 000 in total employment is at 1.8, similar to what it has been for at least 10 years. The proportion of female researchers decreased to 44.9%.

“There is concern over the headcounts of technicians and other R&D staff, which have remained constant at around 11 300 and 11 600 respectively since 2012/13. The number of technicians, in particular, needs to expand given the requirements of the fourth industrial revolution,” the report concludes.

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