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2 Presentation structure Socio-economic backdrop to policy Policy review history (1994 – 2008) Recent OECD review on South Africas National System of Innovation Review responses

3 On the economy Took up government in 1994 with deficit; High levels of poverty and unemployment; Serious challenges in provision of basic services; Step-change in growth since 2004, about 4.5% on average, but consumer and commodity-led; Longest run of positive economic growth in SAs recorded history; Higher growth potential but energy intensive; Economic activity fossil-fueled; Severe shortage of science, engineering and technical skills; Explosive shifts in human settlement patterns (growth of urban slums); Downturn in global economic outlook, Turbulence in global markets, rising inflation, serious concerns over rising food prices …

4 Science Policy Review history (1995 – 2008) Green Paper consultations 1996 White Paper – adoption of NSI concept 1997 Reviews – Science, Engineering and Technology Institutions (SETIs), 12 plus system-wide synthesis report; 1997 Research and Technology Audit 1999 Scenarios-focused Research and Technology Foresight completed, 12 sectors plus 1 cross-cutter (human capital) 2001 EU SA-NSI Review 2002 National R&D Strategy 2002/2003 Follow-up SETI reviews every 4 to 5 years 2004 Ministry for Science & Technology established 2004 Science Vote abolished as planning & budgeting coordination instrument and new governance model adopted for SETIs 1998 Department of Science & Technology established; KPIs for SETIs; FRD changed to NRF 1998 Innovation Fund established 2007 Ten Year Innovation Plan 2007 OECD SA-NSI Review 2007/2008 Follow-up SETI reviews every 4 to 5 years Rm 276 Rm 418 Rm 1630 Rm 3137 Reviews generate the story-line. The story presents the case for the budget-line

5 The issues the White Paper addressed as failures A fragmented National System of Innovation (NSI); An inadequately co-ordinated NSI; The erosion of innovative capacity; Poor levels of investment in research and development; An urgent need to redress the imbalances created by past policies and actions; A lack of resources to meet commitments in respect of regional development; A poor competitive position within the global environment.

6 The new policy directions that were proposed within the NSI framework included the following Creation of clear channels for capacity building, science and technology human resource development and inequity redress; Establishment of mechanisms to re-allocate government spending according to new priorities to promote innovative solutions, particularly related to problems of the disadvantaged; Processes that will challenge government research institutions to derive more support from competitive sources of funding; Introduction of processes allowing longer-term perspectives in planning and budgeting for R&D; and Promotion of institutional changes and new management approaches to accommodate the above proposed mechanisms and processes.

7 The teams for the twelve institutional reviews were drawn up from senior science and technology practitioners and managers both locally and internationally. The criteria of race and gender were also strong determinants in the selection process. A number of candidates were from the African continent SETI Reviews The White Paper on Science and Technology mandated an investigation into the structure and governance of South Africas science and technology system. During 1997 the Department of Arts, Culture, Science and Technology (DACST) therefore initiated and managed a series of twelve separate evaluations of science, engineering and technology institutions in order to establish how these institutions could be restructured or reconfigured to meet broad national goals.

8 1997 Review findings The Review concluded that parts of the system were functioning extremely well – for example, some core competencies of the CSIR, MINTEK, the Council for Geoscience (CGS) and the Medical Research Council (MRC) were evaluated and acclaimed as world-class. In most of the other institutions the basic technical expertise was seen to be of a high standard. However, there were deficiencies of varying degrees of severity in respect of strategic vision, research management and equitable human resource development. HSRC to re-orientate to public purpose R&D agenda and CSIR to chart a way back to science as opposed to consulting contract focus. From a structural perspective significant recommendations were made regarding the Atomic Energy Corporation (AEC)-separate public interest from commercial operations, the South African Weather Bureau (agentise SAWB) and the Africa Institute of South Africa.

9 1998 Scorecard approach introduced for Science Council KPIs Financial & Investment perspective Stakeholder/Customer perspective Organizational perspective Innovation and learning perspective Human Resource Development perspective

10 KPIs: Financial & Investment Perspective Targeting and managing research investment ROI on intangible property/savings to state & society Market/user relationship Competitiveness (first, second or last port of call) Management of operating costs, technology, capital assets)

11 KPIs: Stakeholder/customer perspective Support of NSI goals National development imperatives Ensuring access to knowledge infrastructure Technology diffusion/dissemination of information & research results Supporting quality policy decision- making Promoting networks & linkages

12 KPIs: Organizational perspective Close to operational best practice Quality of science & technology base Quality of science & technology services/products Relevance of research portfolio Profile i.r.o. partnerships/joint ventures/co- operation agreements Corporate culture

13 KPIs: Innovation & learning perspective Contribution to national knowledge stock Development of human resources in science & technology (knowledge capital) Integration with knowledge based economy Nature and extent of Foresight capacity for engagement in new core technology areas Nature and degree of commitment to promoting public understanding of science and technology

14 KPIs: HRD & Transformation Training and development Employment equity Remuneration equity Democratization

15 Future R&D capacity Technical progress (Improvement and Innovation) SET Human Capital Business performance Current R&D Capacity Wealth Creation Imported know-how Quality of life 2002 Indicators based National R&D Strategy Twin objectives

16 Imported know-how Technology balance of payments Current R&D Capacity Share of publications R&D intensity (investment) Future R&D capacity University enrolments S&T post-graduate degrees University Exemptions in Maths and Science SET Human Capital Researchers in workforce Demographics of SET workforce Technical progress (Improvement and Innovation) Patents Business R&D intensity ICT uptake indicators Business performance Technology/ trade mix Key sector performance New sectors (e.g. biotech) Quality of life Technology Achievement Index Wealth Creation Technology based growth Indicators


18 OECD SA-NSI Review The Process Project co-ordination: NACI and OECD Secretariat Negotiated and finalised TOR DST developed the SA Background Report The South African National System of Innovation: Structure, Policies and Performance

19 OECD SA-NSI Review Process cont… Using the report as a tool for the national strategic conversation Programme included players in all the major stakeholder groups of the STI sector Culmination in a briefing session with Minister Mangena and the DST Executive

20 2007 OECD Review: Key Findings Human Capital for SET is sub-optimal. A long term planning Framework is needed. The governance framework needs more vertical and horizontal integration. There is an innovation chasm with an insufficient number of research products directly influencing the real economy. Science, Technology and Innovation for the 2 nd economy should be more pronounced and visible.

21 OECD Review: Responses The development of the 10 Year Innovation Plan; Human Capital Strategy for Science, Engineering and Technology; Inter-departmental Knowledge-Economy Forum established; Structured bilaterals with sector departments; Active engagement within government cluster system; Governance problem persists – may lead to proposal to revisit sector-focused governance model; Proposed establishment of the Technology Innovation Agency; Considering innovative 2 nd Economy STI interventions.

22 10-year innovation plan South Africa adopted a Ten-Year Innovation Plan ( ) in July 2007 Major emphasis is the commitment to national action for transitioning to a knowledge-based economy through:- –Human capital development (HCD) –Knowledge generation and exploitation (R&D) –Knowledge infrastructure development –Addressing the innovation chasm between research results and societal benefits


24 Research Development Manufacturing Local Research Local Industry & Industrial Products OVERSEAS TECHNOLOGY SOURCES Research Development Production Technology Transfer $ Innovation Chasm Technology dependency or knowledge economy?

25 New Kid on the block Technology Innovation Agency (TIA) Technology commercialisation capacity: science, engineering, technology, IP, industry analysis, market analysis, investment analysis Enhanced funding capacity: seed/grant funds, loans/equity, venture funds Technology nursery: advisory services, incubation, SME support Leading and resourcing Centres of Competence

26 Its time to be ambitious 5 GRAND CHALLENGES Innovation towards a knowledge economy Human and Social Dynamics: empowering society in a complex world Technologies for an Energy- secure Future Become a serious participant in global Space industry Become a Key player in knowledge base on Global Change science and planning Farmer to Pharma: establish an integrated local value-chain

27 The number of researchers the key enabler The number of qualified researchers will not be achieved without outside intervention A clear career path from BSc to researcher level has to be established, The Masters and PhD intern programmes have to become significant parts of government funded research with graduation targets being significant part of the monitoring. The production line of researchers will have to be continually watched for bottlenecks, including hindrances and bottlenecks going in and out of the systems Any one bottleneck, such as math matriculants, science and engineering graduates, research projects and mentoring expertise will potentially derail the human capital development programme.

28 The current pipeline is woefully inadequate Strategic Destination HG Maths and Science ~ per yr Existing National SET pipeline (2005) SET graduation rates ~per yr Hons grad rates~ per yr Masters ~ per yr (incl. coursework) PhDs ~ per yr 26,000 33,500 3,200 2, Required National and SET target pipeline (2025) X 10 increase Senior certificate with HG Maths and Science ~ per year HE SET graduation rates ~ per year Hons graduation rates ~ per year Masters graduation rates ~ per year PhDs per year 260, ,000 32,000 29,000 5,610 SET Ph.Ds Produced = ~50% Total Ph.D Production!

29 STRATEGIC POSITIONING IN WHICH LEAGUE DO WE WANT TO PLAY? CountryFactor China??X 0.34 India??X 0.44 BrazilX 1.9 TaiwanX 2.3 JapanX 4.9 USAX 6.1 South KoreaX 6.8 UKX 8.2 AustraliaX 9.7 South Africa In 2026 A 5 x increase from current situation South Africa In 2026 A 10 x increase from current situation

30 Available instruments for implementing the HCD Strategy South African Research Chairs Initiative (SARChi); Centres of Excellence; Centres of Competence; National Facilities; Science Councils; International postings.

31 Thank You


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