Science and Technology Investment Manager's Forum
13 February 2007
Programme Director,
Ladies and gentlemen,
On behalf of the Department of Science and Technology (DST), I would like to
extend my warmest welcome to all of you. It is a pleasure for me to take part
in this historic launch of the Government Science and Technology Investment
Managers' Forum. Perhaps we should from hence on adopt a shorter name in
alignment with earlier developments. I suggest the 'Knowledge Economy'
Forum.
This forum will provide a platform for managers that are responsible for
science and technology activities in government to contribute in the
transformation of the South African economy into knowledge based economy.
A knowledge based economy is one in which the generation and exploitation of
knowledge has come to play a predominant role in the creation of wealth and
improvement of the quality of life of all people. We have uncontested evidence
that this requires public sector investment, planning and capacity building. I
will therefore focus the rest of my presentation on each of these pillars,
investments in science and technology, informed and targeted planning as well
as national capacity.
The DST needs your Department as an investment partner in science and
technology. According to recent statistical information at our disposal, South
Africa's technology balance of payments shows a deficit of nearly 0,4 percent
of Gross Domestic Product (GDP). What this means is that South Africa's economy
is a net importer of technologies and that the sales of our technologies abroad
are limited. This situation compares well with Portugal or Ireland, i.e.,
countries that are not particularly renowned for their prowess in domestic
technological innovation. To address this situation, therefore, government
needs to target its resources wisely and into key areas of high potential.
Aside from providing sufficient funding, government intelligence needs to be
strengthened in identification of sector Research and Development (R&D)
priorities and institutional arrangements to deliver value from the
investment.
Last year our Minister of Science and Technology, Mr Mosibudi Mangena,
announced that the country's R&D expenditure for the 2004/05 financial year
was nearly R12 billion or 0,87% of GDP. It is encouraging to see that we are
getting closer to the target of 1% of GDP set for 2008. However, considerable
increases in R&D expenditure are still required from both government and
business in the next two years in order for us to reach that target. It will
take the collective effort of all public institutions to clinch this milestone
and then set a new target.
I am also encouraged by the findings of the national science and technology
expenditure plan report which shows that government spends over R5 billion per
annum on science and technology activities. In particular, what is pleasing is
that some government departments are developing sector R&D plans to direct
the funding into targeted priorities and some are establishing strategic
institutions to provide R&D needs for government. For example, the
Department of Defence has taken a decision at the ministerial level to
establish a defence evaluation and research institute and a defence R&D
strategy for that sector. Other sectors such as agriculture, communications,
forestry, health and transport have made considerable progress in developing
research plans. Others have indicated the intent to organise R&D in their
sectors. This is indeed pleasing.
Regarding the private sector expenditure on R&D, I am confident that the
generous increase in the tax claim from 100% to 150% of expenditure on R&D
introduced by government last year will further encourage companies to spend
money on research to improve their productivity, innovation and
competitiveness. The R&D tax incentives demonstrate our resolve to
transform our economy from a resource based economy into a modern knowledge
economy that is internationally competitive.
The R&D tax incentive will decrease the cost of doing research by 18
cents on every Rand spent on qualifying R&D. You will note that we opted
for simplicity and volume in the design of the R&D tax incentive
particularly to ensure that all economic sectors that require R&D for
innovation and competitiveness can benefit from the scheme. Let me thus implore
you to read the amendments to the Income Tax Act and understand how the R&D
tax incentives work and use them to encourage R&D in your sectors. This
will certainly make your sectors competitive and will ease the absorption of
science, engineering and technology graduates.
I will now move on to the next critical argument for the work of this forum
within government.
'Science and Technology planning in an uncertain world'
The current government has established a tradition for effective planning
processes in science and technology policy such as the foresight study, the
national R&D strategy and customised sector strategies in biotechnology,
advanced manufacturing, the Information and Communication Technology (ICT)
R&D strategy to mention a few. These have proven to be robust, practical
and implementable. I would like to encourage you to maintain this tradition.
Particularly, I request those departments that lag behind to be active in
introducing sector specific R&D strategies to advance national science and
technology and service delivery.
Ladies and gentlemen, let us not underplay the fact that science and
technology plays a very significant role in the work of all government
departments. However, we believe there is room for improvement in the
co-ordination of our activities. The strategic management model for the public
science and technology system which was approved by Cabinet in 2004 requires us
to improve co-ordination of government science and technology activities and to
develop and implement well co-ordinated sector R&D strategies.
The key elements of modern winning strategies in any sector include
identifying sector specific research priorities, human capital development,
investment in modern infrastructure and effective institutional arrangements.
The DST is therefore willing to share good practices with the rest of
government in developing science and technology programmes such as centres of
excellence, centres of competence, research chairs, etc. Even better, we could
even collaborate to expand government involvement and growth of such
initiatives.
Let me now talk to the third pillar of work for this forum, which is about
'warm bodies', hardware and facilities.
Capacity (human capital and infrastructure)
The continued development of human capital is critical for sustaining
innovation and economic growth in South Africa. We cannot address our national
challenges without a strong focus on improving the supply and the quality of
skilled scientists and engineers. Wealth creation in the context of an
increasingly globalised world economy is a function of human resources
development (HRD). We therefore have to exert maximum effort to train the
necessary numbers of our people in the fields required for the development and
management of a modern economy.
Our economy needs skilled people who are able to develop home-grown
technologies and absorb the technologies that are developed abroad to attract
local and foreign investment. The best mix for creating new technologies is for
a country to offer a high skilled workforce with a flexible working
environment.
It is in this context therefore, ladies and gentlemen, that the Department
of Science and Technology has identified a need to establish a forum consisting
of representatives from government departments who will play an advocacy role
for science and technology policy within government and ensure continued
promotion of the knowledge economy within the government budget cluster system
run by the National Treasury. The Directors-General of government departments
expressed full support for the formation of this forum, during the knowledge
economy cluster's budget meeting held in September last year.
Accordingly, the members of this forum are expected to play a prominent role
within their respective departments in promoting research in that sector. They
should champion knowledge based solutions in discharging their respective
mandates, advocate judicious investments in research and development as well as
advise their principals on the latest science and technology policy initiatives
impacting their sector. This forum will provide a platform for science and
technology managers within government to bring about synergy and create a more
integrated and effective national system of innovation.
This forum should take advantage of the favourable climate for science and
technology in government. It should set out the rules of engagement as a group,
between the various departments and across departmental boundaries, to ensure
that public investments in scientific and technological programmes deliver
socio-economic benefits.
We are all in agreement that government needs research and scientific advice
for a broad range of activities. The range of these activities gets wider as
science and technology increasingly permeates our daily lives whether in
transport, telecommunications, housing, healthcare, the environment, defence,
crime prevention, water and sanitation, food security - the list is
endless.
The global knowledge economy is upon us. South Africa has to accelerate the
growth of its scientific and technological base if we are going to achieve our
development goals and compete favourably in the global market. I therefore
commend your departments for establishing research and policy positions at
senior management level to attract people who have the authority and capacity
to provide science and technology advice and represent their departments in
structures such as the planning Forum that we are launching today.
Thank you!
Issued by: Department of Science and Technology
13 February 2007
