Submission on the TIA Bill to the Parliament Portfolio Committee 16 January 2008 by The Innovation Hub Mr Tsietsi Maleho and Dr Jill Sawers

Introduction The Innovation Hub (TIH) is strongly supportive of the principle of a TIA Comments presented drawn from experience in working with small technology based enterprises 2

3 Business Clusters Incubation Key Elements of The Hub Networking INNOV8 Enabling Environment Space Education & Industry Interfaces Technology Transfer

International Definition of a Science Park A Science Park is an organisation managed by specialised professionals, whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions. To enable these goals to be met, a Science Park stimulates and manages the flow of knowledge and technology amongst universities, R&D institutions, companies and markets; it facilitates the creation and growth of innovation-based companies through incubation and spin-off processes; and provides other value-added services together with high quality space and facilities. IASP Definition April

5 Features of The Knowledge Economy Important drivers are Knowledge and Technology-based companies Small and emerging technology companies are vital to innovation system Important to have collaboration in the triple helix (business, research/academia, government) Successful countries have an enabling environment for innovation

What is innovation? TIH working definition: Innovation must lead to commercial products or services to impact economically or socially 6

DM Copyright © Tekes Innovation environment in Finland Resources and funding Private Basic researchApplied researchBusiness R&D Business development Marketing Internationalisation R&D at companies 3,684 The figures represent the total extent of each organisation in million euros in In parenthesis the share that is funded from the State budget. The funds of Tekes, the Academy of Finland and Innofin are funded entirelyfrom the State budget. Business Angels approx. 380 Public Finnvera 412 (44) Universities 1,040 (454) Academy of Finland 208 Ministries, TE-Centres, sectorial research 312 (221) Tekes 415 VTT 218 (68) From abroad 169 Innofin 6 (4) Finpro 32 (20) Venture capitalists: Private 336 Industry Investment Ltd 37 Sitra 28

8 1. Concerns re. Object Process for stimulating and intensifying technological innovation and invention: “by developing and exploiting innovations and inventions” Implies direct involvement rather than facilitation TIA will be perceived to compete with private sector and discourage collaboration

9 Proposed additions to “Objects of Agency” Anticipated ROI Have an effective innovation value chain that ensures that South Africa remains globally competitive by enhancing commercial and socio-economic benefits Appropriate Methodology must result from collaboration To establish a facilitating agency (TIA) promoting collaboration between business, research/academia and government interests

10 2.Concerns re. 2.1Powers and Duties Para 4(1)(a)(ii) …establishing operational companies to develop/exploit any technological innovation or invention Para 4(1)(c)…acquire any right in or to any technological innovation, invention, or patent…. –Government culture very different to entrepreneurial culture required to run agile companies –Government will compete with entrepreneurs, but with public money (unfair advantage)

11 2.2Powers and Duties Para 4(2)…where the Agency enters into any transaction with any …enterprise or company…the Agency must….ensure that the Department is represented in the (company) Board… –No discretion is left to the TIA Board or the Minister –TIA will HAVE to be represented on the boards of EVERY investment How big will TIA have to be? How diverse will TIA’s skills set need to be? Is questionable why government should play such a direct role in business ventures – what value will it add and how empowered will the representatives be to make fast decisions?

12 3.Concerns re. Board TIA Board –If Board makes technical decisions, this increases potential for conflict of interest and biased decision- making. Difficult to create Boards with the required level of independence when they comprise part-time members –Bill addresses selection and operating principles, but not adequately terms of reference, roles and responsibilities

13 Conclusion Comments have been based on experience of private sector knowledge-based businesses with governmental programmes TIH strongly supportive of the creation of a TIA, but recommends international good practice in innovation funding viz. via grants and low-interest loans For the necessary collaboration to stimulate innovation, TIA must be positioned as facilitational rather than competitive –The current TIA Draft Bill does not support this facilitational role A long term ROI (employment and company taxes) rather than a short term ROI should be expected from TIA. TIA needs to be risk tolerant.

14 Thank You Finalist: Intelligent Communities Forum (NY) Visionary Project of the Year 2004 Tel : Fax :