Innovation Fund's 2006/07 Annual Report
12 November 2007
Programme director
National Research Foundation President and Chief Executive Officer, Professor
Mzamo Mangaliso
Executive Director of the Innovation Fund, Dr Eugene Lottering
Distinguished guests
Ladies and gentlemen:
The central premise of my remarks today is that innovation in a
'developmental state' context is a challenge of balance. Since 1994, we have
made significant increases to our Research and Development investment.
But unlike developed nations, our planners have to juggle priorities for
these scarce resources against a number of basic needs such as housing,
sanitation, health care and education.
While the idea of innovation has been around for a long time, it has
certainly acquired new meaning today. Fifty years ago "innovation" meant
something closer to "invention". Today, the focus is on how to exploit
invention for socio-economic benefits.
The original investment in basic research and human resource development
came with a promissory note, that such investment would eventually benefit
society. Initially, the "society" that was to benefit was a particular nation,
but as new discoveries were made and as technologies evolved, their long-term
benefits were far broader, and they came with huge commercial and economic
payoffs, and extended to global commerce and advances in energy, health,
transportation, and many other sectors.
The current affluence of developed countries is largely the outcome of such
investment and the resulting ease of global movement, both through the use of
modern transportation technologies, and virtual movement through the internet
and other global communication networks.
In South Africa, unfortunately, while juggling the need to meet basic needs
of the population and invest in meaningful technology development, we have in
the main, failed to convert our basic knowledge into commercial products,
creating a phenomenon, which in the science circles is often referred to as an
innovation chasm.
In a developmental state context, innovation must:
* address developmental challenges and be relevant to the economy
* be dynamic and responsive to global challenges
* be managed in a structured institutional arrangement that enables the
creation of factors of production along the product development value chain;
and
* Be based on sound principles of identifying grand opportunities for
socio-economic benefit.
Recently Cabinet approved our Ten-year Innovation Plan, an ambitious plan
that charts the course for enhancing innovation and contributing to sustained
economic growth.
The pillars of a properly functional knowledge economy are innovation,
education, economic and institutional regime, and the information
infrastructure. These factors are inter-linked, and slipping on any one of them
will not necessarily collapse a knowledge economy.
At the innovation end, the department identified critical bold interventions
that need to be initiated in selected areas called "Grand Challenges". These
areas offer great potential to steer our 'developmental state' towards a
"knowledge-based economy".
Briefly, these "Grand Challenges" include:
* "Farmer to Pharma": There is tremendous yet untapped potential to further
develop the bio-economy in South Africa. We have the world's third-largest
biodiversity resource base, a solid foundation of expertise. We need a
systematically managed product value chain to exploit these advantages for the
establishment of a globally competitive pharmaceutical industry.
* Space science and technology: The establishment of a National Space Agency
will assist us to grow and manage, in a coordinated fashion, our satellite
industry and a range of innovations in space sciences, earth observation,
communications and navigation for socio-economic benefits.
* Energy security: Today, every nation is grappling with the issue of energy
supply. The productive capabilities of our emerging economies are dependent on
a secure supply of safe, clean, affordable and reliable energy. Working closely
with industry, interventions to explore opportunities in clean coal
technologies, nuclear energy, renewable energy and hydrogen and fuel cell
technologies will be explored.
* Global climate change science: South Africa's geographic position, unique
biodiversity and a large base of expertise enables us to play a leading role in
climate change science. We are positioned to serve as a unique laboratory,
given our proximity to the Antarctic, the Southern Ocean, and the interactions
between the Agulhas and Benguela currents. We plan to make a major contribution
to understanding climate change, and offer modelled solutions to the world.
Human and social dynamics are at the core of nearly every major challenge
facing South Africa, from climate change to creating a competitive and
innovative workforce. The fifth grand challenge is to increase our ability to
anticipate the complex consequences of change; to better understand the
dynamics of human and social behaviour at all levels; to better understand the
cognitive and social structures that create and define change; and to help
people and organisations better manage profound or rapid change.
In his book, The Emerging Market Century, Antoine van Agtmeal echoes a need
for big ambitious and inspirational goals for nations that have aspirations to
become knowledge economies.
Electronics did it for Japan, Korea and China. South Africa also needs to
find her niche in the emerging market economy.
We have many areas of geographical and technological advantage. We now need
to work strategically to ensure that some of the investments we have already
made through the Innovation Fund create that technological halo for South
Africa by aligning them to some of the grand challenges identified in our 10
Year Plan.
Ladies and gentlemen, consistently created factors of production in emerging
and industrialised nations need a solid good quality baseline education.
A well functioning knowledge economy, which can spur sustained economic
growth, demands the nurturing and development of science and engineering talent
as a prerequisite competence in the economy.
South Africa is currently grappling with the challenge of providing quality
education to all her citizens. If we do not address this challenge urgently, we
will continue to have pockets of technological excellence that hardly translate
into widespread economic benefit.
The last 'knowledge economy' pillar I want to touch on is the economic and
institutional regime.
Our system is yet to effectively mobilise innovation in support of economic
growth. Fragmentation has locked us in an "innovation chasm" paradigm, which is
a major weakness in our economy.
We have increased investment to the National System of Innovation. The total
investment in Research and Development in 2005 amounted to 0,91 percent of
Gross Domestic Product (GDP), or R14 billion, demonstrating that South Africa
has a realistic chance of achieving the 1 percent target of GDP set for
2008.
It is now vital that existing innovation instruments are redesigned to
create a structured innovation chain to address the "innovation chasm" his
includes improving access to finance and an innovation-friendly regulatory
environment, and strengthening our National System of Innovation (NSI).
To address the fragmentation of funding instruments, this Ten-Year
Innovation Plan introduces the establishment of a Technology Innovation Agency
(TIA). The agency will incorporate, among others, the Innovation Fund and the
Biotechnology Regional Innovation Centres. The TIA will help to establish a
network of competence centres focused on market opportunities in partnership
with industry and public research institutions.
This plan also stresses the need to establish an Intellectual Property
Management Office to enhance the protection of intellectual property.
We are grateful to the Innovation Fund for its leadership and guidance in
the articulation of the regulations and institutional arrangements to start the
management of Intellectual Property in South Africa.
In my view, it is the Innovation Fund that has sparked an often emotional
debate with various research organisations, and insisted that Intellectual
Property is properly managed and protected.
We can increase our Research and Development spends and be ranked high up
with the developed nations in Research and Development spends as a percentage
of GDP. However, if we fail to increase our rate of patenting and
commercialisation of our patented technologies, we would continue to waste
resources that could have lessened the tribulations of those who are hungry and
unemployed.
We are going to witness a lot of change and the re-engineering of our system
in the next year or so to drive the 'structured' innovation agenda.
We all need to adapt and re-evaluate our business models to meet the
objectives of the 10 Year Innovation Plan. In this quest, we would be well
advised to follow Charles Darwin's words of wisdom when he claims: "It is
neither the strongest of the species that survive, nor the most intelligent,
but the ones most responsive to change".
We are confident that the great work of the Innovation Fund will continue
within the new TIA structures. I am certain that all of us who are intimately
involved in the innovation space will derive from this report a clear picture
of the triumphs and challenges of the Innovation Fund, and its continued
relevance in our quest for both economic growth and the improvement of the
quality of the lives of our citizens.
I look forward to the 2006/07 Annual Report of the Innovation Fund.
I thank you.
Issued by: Department of Science and Technology
12 November 2007
Source: Department of Science and Technology (http://www.dst.gov.za)
