Professor Motala,
Students
Good morning. I want to begin by making two general points about South African science and technology. First of all government, business and universities invest more in science than in technology research and development.
To put it another way, our share of global scientific output has been growing, while out share of global technology output has been falling.
The statistics tell the story. In 1995 our share of global science (papers) was 0.51% and our share of global technology outputs (patents) was 0.12%. In other words our science was four times better than our technology.
In 2008, our global science share was stable, while our technology share had fallen by half down to 0.05%. In other words our science was ten times better than our technology.
What this means is there has been a contraction of research taken to market in South Africa. In fact, if you look at the patent data, you will see that we have only significant capacity in mining and related activities (petrochemicals and synthetic fuels).
It appears that local business is investing less and less in research at South African universities. This picture is rather different to that in the USA where the research universities provide a significant proportion of the ideas that lead to industrial innovation. Second, business investment in r&d has been declining in the recent past.
The most recent R&D survey published last month shows that the country spent just under 21 billion rand (US$2.2 billion) on R&D in the 2009-10 fiscal year. This is the first drop in more than a decade. This is hardly surprising given the continuing global financial crisis.
Our aim was 1% of GDP by 2008 and 2% by 2018, but we missed the one target and the other target is looking unreachable.
According to the most recent survey business, which contributes more than one half of the country's R&D expenditure, dropped its spending by a huge 9.7% in 2009-10. Government departments also spent less, whereas national science councils and universities spent more.
Over the last decade business investment has been the engine of research and development and it is a worry when the engine begins to slow down.
Government has to step in to play a rowing rather than a steering role.
There are numerous initiatives under way to do with leveraging venture capital for technology companies. I regard this as central especially after the failure of the Joule, an electric car, and our exit from participation in the PBMR. New technology companies are critical to South Africa in the future. And we have to build them now or provide a fertile enabling environment to get them started.
Government’s flagship contribution is through the Council for Scientific and Industrial Research (CSIR).
The CSIR is our oldest and best-known science council. It was built in the immediate post-war period – together with ESKOM and SASOL - to promote the development and assimilation of new technologies. It is still, as it was in the 1950s, the biggest and best-resourced science laboratory complex in the country. It accounts for 15% of government expenditure on research and development.
The CSIR focuses its research on six well established research-impact fields - materials, built environment, health, natural environment, defence, and energy.
Now the CSIR is taking a new turn. It has adopted water sustainability, health, and safety as areas not just for research but for integrated research and innovation. Here the focus will be on developing technologies that are near to market.
For example, through the Titanium Centre of Competence, the CSIR has developed a novel process for producing titanium metal powder from our abundant mineral resource more efficiently and cost effectively than with existing plants.
This process is currently being scaled up and a pilot plant was launched only last week. Together with the process to produce titanium metal, the CSIR has also developed a process whereby titanium metal can be cast into complex components.
Titanium is a sought-after metal in especially the aerospace industry where aircraft and satellites need to be lighter in weight to consume less fuel. The CSIR and Aerosud is developing a novel high speed process for manufacturing aerospace parts using direct laser sintering of titanium powder (additive manufacturing or 3D printing).
This will position South Africa to produce high value components for global aircraft manufacturers such as Airbus and expand the country’s participation in the global aerospace supply chains.
These efforts mean that by 2020 South Africa will have a new industry built around titanium. This translates to thousands of job opportunities and economic growth due to the new businesses that will be created – all based on the local production of titanium metal, turned into aircraft and satellite components.
Then there is SKA. The SKA has attracted the world’s best scientists and engineers to Africa. It requires ultra-high speed Internet - in excess of 100 gigabytes per second. Networks in our African partner countries will have to be upgraded in order to accommodate the SKA requirements. Direct benefits will accrue in the form of jobs created during the construction and operation of the facility.
In terms of economic benefits, the SKA means a net foreign direct investment (FDI) of about €1.5 billion in capital expenditure and €6 billion over a 30-year operations and maintenance period.
The project will require highly skilled positions for 500 people in engineering and astronomy. It’s estimated that 200 skilled workers will live in Africa with their families. The SKA will also provide many African countries with access to world class facilities for teaching, training and research.
Where every radio telescope station is built, thousands of local jobs will be created. SKA will help in the provision of access to broadband connectivity in rural areas. However, remember that we need not only astronomers and engineers, but also entrepreneurs, educators and economists.
We also have a body called the Technology Innovation Agency. TIA is intended to boost the development of new technology based products and to facilitate science based start-up companies.
I am going to highlight a couple of projects.
The Nguni cattle project focusses on improving the quality of cattle in poor communities. According to the Animal Production Institute, cattle from poor communities constitute 40% of the national herd but provide only 5% of its beef production. In this project animal genetics and modern breeding techniques are being applied to cows owned by emerging farmers. The project is helping poor communities to reduce cattle deaths, raise the potential of their herds and enter the mainstream beef economy.
TIA has also initiated a specific investment portfolio for sugarcane in collaboration with some major research and industry investors. Included in this project is the improvement of sugar production processes and new technologies for producing high value food supplements from sugar. The portfolio will be developed in coming years with the aim of establishing a sugarcane platform or centre of competence.
TIA has also invested bio-ethanol production from agricultural feedstock. Some of the initial outcomes of the investments in this thematic area are new varieties of energy crops that have been protected by plant breeders’ rights’ applications and have reached the commercialisation stage.
TIA invested in the Biovac Institute, a PPP, to revitalise local human vaccine production. The Biovac Institute's biggest challenge is that it currently spends R5 million per year to test its products outside the country because there are no accredited facilities locally. Additional recapitalisation of the Biovac Institute's facilities to accredited levels will be undertaken to ensure security of supply of important vaccines and to achieve public health goals. The establishment of a GMP testing facility promises to address developmental requirements of the institute and other stakeholders.
I move now on to the pharmaceutical industry. We have a thriving industry that boasts some of the fastest growing companies in the country. We have the largest market for HIV drugs in the world. We have a well-developed generics industry. We have globally respected researchers. But we face a number of challenges.
At the level of commercialisation and manufacturing processes, the challenges are mainly around the lack of infrastructure for pre-commercial and commercial development and, in particular, appropriately accredited infrastructure for technology development.
Small scale production facilities for drugs and biologics are also needed. These pre-commercial facilities will provide an impetus for local industry to participate in new market segments such as biosimilars.
In addition, there should be critical platforms for in-bound technology transfers, leveraging international expertise and catalysing private sector investments.
There are many opportunities for business in clinical research and development. Multinational companies and international clinical research organisations conduct trials here. The Centre for the Aids Programme of Research in South Africa (CAPRISA) recently showcased the country's capabilities, while an ASSAf report into clinical research highlighted local challenges.
Various universities and science councils have invested in drug discovery and development technologies to synthesise precursors to drugs that treats diseases prevalent in South Africa such as HIV/AIDS and TB.
How does our immigration policy support our science and technology development?
First let me say a word about changing trends in international migration.
Over the last decade, millions of new jobs have been created in SA. However, one of the problems has been large numbers of people have come to SA and successfully found work. Most have been African economic migrants, most without specific skills. Nonetheless it’s our policy to protect jobs – both skilled and unskilled – for South Africans. Most countries do the same.
There has been a change in global patterns of migration since the global financial crisis. The simple fact is that migration to Europe and the US has stalled. This is something that there has not been much noticed in immigration journalism.
United Nations migration figures provide the evidence. Today one third of migrants move between developed countries, one third between developing countries, and the remaining third from developing to developed world. What we are seeing are European skilled workers moving to China. What we are seeing are skilled Central Americans moving to Mexico (well known for exporting citizens to the US). What we are seeing are skilled Spaniards moving to Germany.
This is a new and interesting development. Spaniards, Italians and Portuguese are moving to Germany. Germany has long been accustomed to unskilled immigration from Turkey (1970s) and the Balkans (1990s). But now immigrants are coming from the South West. And the character and education of the immigrants is different – Germany is a magnet for educated immigrants. In fact, new immigrants are younger and better educated than the average German citizen.
There are many more foreign-born citizens living in Germany, the US, and the UK than in South Africa – both in numbers and in proportions. The US of course has long been known as the nation of immigrants and I suppose it is not surprising that immigrants have played a key role in economic development. Apparently 40% of Fortune 500 companies in the US were founded by an immigrant or his or her offspring.
Many of you here will be familiar with Mark Zuckerman’s (FaceBook founder) recent immigration intervention. His argument is that immigrants are the key to the knowledge economy.
He wrote, “Why do we kick out the more than 40 percent of math and science graduate students who are not U.S. citizens after educating them? Why do we offer so few H-1B visas for talented specialists that the supply runs out within days of becoming available each year, even though we know each of these jobs will create two or three more American jobs in return? Why don’t we let entrepreneurs move here when they have what it takes to start companies that will create even more jobs?”
Indeed. What is our policy?
First, let me talk about students.
We’re working with the sector to encourage students from around the world to come here to study and we intend over the next year to step up efforts to attract a greater share of the best globally mobile business school and postgraduate scientists to come to SA. In 2000 there were 60,000 foreign students studying at our universities. Last year there were 90,000 out of a university student population of 750,000 (Documented immigrants in South Africa 2011 | Statistics SA). Put another way, nearly one in seven students was a foreigner.
International students, postgraduates, researchers bring tremendous benefits to this country and they make an enormous contribution to the intellectual vibrancy and diversity of our educational institutions.
As a result, the regulations to the 2011 Immigration Amendment Act (soon to be promulgated) will include a five-year work permit for all foreign graduates from our universities.
Now a word about researchers and other scientists.
It is generally acknowledged that South Africa lacks high-level research skills, that is, individuals with doctoral degrees and several years’ research experience in a relevant institution. We are going to streamline the process so that appointing foreigners is easier for institutions.
In regard to business, we’ll increase the opportunities for foreign investors and entrepreneurs to come here. In future, we’ll make it easier for angel investors to back foreign entrepreneurs, people who are starting small scale but may end up running the blue-chip businesses of tomorrow.
We’ve also listened very carefully to business over inter-company transfers, ensuring that multinational companies with a presence here can bring in their skilled managers and specialists, because attracting top business investment to SA is a fundamental part of our strategy for economic growth.
I hope that this brief outline of some of key interventions gives you a sense of the work we are doing to create a more knowledge-intensive economy. Thank you for inviting me to speak to you.
