Programme Director
Vice Chancellors
Director-Generals
National Research Foundation (NRF) officials
Distinguished Guests
Good morning. I am going to talk about university-business collaboration and what government is doing to support innovation.
The 2007 Organisation for Economic Co-operation and Development (OECD) review of South Africa’s innovation policy concluded the following, and allow me to spell out some of the conclusions in bullet-point form:
- There seemed to be only limited horizontal coherence and integration between agencies in the national system of innovation, and no Cabinet-level coordinating body had yet been successful in devising and monitoring national level strategies for innovation, and marshalling the resources needed for these,
- Business was insufficiently involved in national system of innovation-building, at the levels of both large and small firms,
- The concept of a national system of innovation had as yet gained limited currency, both in the extent to which it was understood as something wider than the sum of traditional Research and Development(R&D) activities, and in the extent to which it had been fully absorbed into the strategies of key actors (including government departments and higher education institutions),
- The notion of innovation – in all its dimensions, including technical, economic and social – was poorly understood, especially on the demand side,
- The functioning of the national system of innovation was seriously impeded by the deficit in high-order skills, particularly in the area of design, engineering, entrepreneurship and management,
- The national system of innovation was making an inadequate contribution to poverty reduction and wider inclusion in the mainstream economy,
- The levels of innovation required in the economy would only be possible if there was a considerable expansion of university research, especially to provide the necessary research-capable human resources at all levels of qualification,
- South Africa would need to compete for high-end skills in the global talent pool where advanced economies were implementing immigration measures to attract high level scientific and technological competencies (not least from South Africa).
Soon after the OECD Review was published government published its Ten-Year Innovation Plan.
Unhappily it did not take on board many of the recommendations in the OECD review, particularly in regard to business and the private sector, and particularly in regard to issues relating to governance.
However, government established the Technology Innovation Agency, passed the IPR from Publicly-Funded Research Act and introduced the National Intellectual Property Management Office (NIPMO), all of which were first proposed in the 2002 National R&D Strategy.
Unfortunately – and this is partly why I encouraged Parliament to choose ‘the knowledge economy’ as its theme this year - not many South Africans know what a knowledge economy is, never mind innovation or a national system of innovation.
We live in an age of knowledge in which the key resource necessary for prosperity has become knowledge itself. As society becomes ever more knowledge-intensive, it becomes ever more dependent on those social institutions, such as the university, that create knowledge and educate people to the highest levels.
Soon most jobs will be professional, managerial or associate professional (nurses, technicians) and the most productive, fastest-growing sectors (health and IT) of all economies are knowledge-based.
We are going through a period of immense technological innovation, a period as immense and transformative as the first industrial revolution, when steam replaced horse-drawn power.
One statistic sums up this giant transformation: five billion of us now have mobile phones.
Yet there are those who doubt whether new technology creates jobs. They doubt whether the internet and the cell-phone industry creates jobs.
Well new technology does create jobs.
The problem is that the jobs that new technology creates and the jobs it destroys are for people with different skills.
For example, agents of all kinds – estate, travel – lose their jobs as the internet makes it possible for people to book and buy online, but new jobs are created for programmers and the people who create apps.
The problem is that it’s difficult to train an estate agent to be a programmer or an apps producer.
Universities have always been at the heart of producing knowledge - passing on old knowledge to students and new knowledge to the world. But in that process universities have mainly seen their mission as producing talent and not technology.
Universities have not embraced business here as they have in other countries. Professors do not see themselves as investors in startups and supervisors of app development. Some do. Most do not. An academic’s life is often a quiet one, secluded from the strains and stresses of running a business.
This is a debate that we have not yet had in South Africa.
Just how deeply involved should universities be in business? Should universities be in the business of innovation at all? Does business collaboration compromise universities? Should universities undertake more pure research and less applied research?
Look at the huge trouble that Canada is having with its latest round of research chairs that in one case in particular seems to give business (Blackberry) a greater say in the academy than ever before.
Innovation is about turning new ideas into profitable businesses. It’s not every Professor who wants to become an entrepreneur. It’s not every professor who has the best ideas for a new product or a new app. It’s often the youngsters, the emerging scholars and scientists who have the courage to fly like Icarus – to take risks, because they are not frightened to fail.
Besides you can be innovative without undertaking any research at all.
Take Apple, widely known as one of the most innovative companies in the world. Apple undertakes far less research and development than its competitors. What Apple does is to take ideas that have already been invented and to shake up whole industries to by designing better products – first computers, then music with its IPod, then cell phones with the I-Phone, and now tablet computers with the IPad.
The National Development plan argues that government should do more to promote innovation in both the private and the public sectors and the ministerial committee on the innovation landscape, which will soon be published, makes a similar observation.
Now I am not going to reveal what’s in the Mincom, but let me float a couple of central ideas to do with both business and social innovation.
Government encourages business R&D through a tax incentive, but the scheme is under-subscribed, apparently due to obstacles associated with bureaucratic requirements.
We have made the incentive simpler to claim from this year and we await to see its impact on new technology and patents.
We have to recognise that we have failed to diversify or capitalise on local knowledge generation, and this is despite considerable expertise in sectoral systems of innovation such as mining, pulp and paper, viticulture, chemicals and telemetry.
Our R&D surveys show that too little local business R&D is conducted in our universities.
This is very different to the USA where the research universities provide a significant proportion of the ideas that lead to industrial innovation.
It is apparent that the outcomes of the Department of Trade and Industry (DTI’s) Technology and Human Resources for Industry Programme (THRIP) and the smaller Support Programme for Industrial Innovation (SPII) have in general been positive.
However, there is more we should do to promote government, university and business collaboration.
For example, it’s a concern that the Industrial Policy Action Plan (IPAP) of the DTI shows such a limited understanding of the importance of the science component of the research and innovation system.
We can also do more to encourage the mobility of scientists and scholars.
The proposal of the National Planning Commission (NPC) that foreign doctoral graduates be granted work permits for up to seven years reflects the kind of new thinking that is urgently needed.
International collaboration and linkages are indispensable components of healthy knowledge transfer and exchange. The DST has done a sterling job in promoting and managing cooperation schemes with selected countries in a variety of formats.
A particularly significant achievement is making South Africa one of the principal beneficiaries of the European Union Framework Programmes.
Social innovation, or innovation for development, is concerned with the pre-eminent national priorities arising from poverty and joblessness.
I think social innovation is the current term, and I am not talking about philanthropy or corporate social investment.
Social innovation is a sector that has grown enormously across the world in the last ten years.
Social innovation is ameans of advancing development goals. Social enterprises are businesses with primarily social objectives whose profits are re-invested in the business or community.
Royal Bafokeng is probably the best-known social business in South Africa. Its profits, generated mainly from the proceeds of its platinum investments, get ploughed back into social programmes.
The activities associated with social innovation need to be clearly understood in the public mind as highly-valued investments in the future, with implications for many fields of practice in the public and private sectors, and in personal lives.
We will develop incentives for the field of social innovation.
The incentives will induce business to contribute and participate, local and regional government to be innovative in what they do, and civil society to play its indispensable part.
Pulling these three strands together – universities, business, social innovation, the idea is that government will draw up three collaboration agreements spelling out how policy harmonisation and the coordination of ‘action plans’ will be ensured.
- One focused on post-school education and training involving the Department of Higher Education and Training (DHET) and the Department of Science and Technology (DST).
- One focused on business and enterprise development, involving (at least) the the DTI, the Economic Development Department (EDD), the Department of Public Enterprises (DPE) and the DST.
- One focused on social development and social innovation, involving the DST and departments concerned with social and rural development, and the social security, health and education complex.
Thank you.
