1. Industry Innovation Partnerships Innovation for Sustainable Industry Development 22 July 2015 Isaac Maredi

2. Presentation Outline  System Wide Challenges  Technology Balance of Payments  Manufacturing Trade Deficit  Private Sector R&D Investment  Rationale for Funding Industry R&D  GERD Trends  DST Interventions  Industry Innovation Partnerships Programme  Environmental Innovation Programme 2

3. SA Technology Balance of Payments www.dst.gov.za3 SA is a net importer of technology The gap between imports and exports has been increasing Points to increasing local demand for technology

4. SA’s current account deficit www.dst.gov.za4 Manufacturing Trade Deficit Manufactured goods made up 52% of merchandise exported in 2012, up from 41% in 1994 SA’s growing trade deficit in the manufacturing sector is a structural concern for the economy

5. 5 Rational for industry R&D funding ? ? R&D / Technology / New Knowledge: direct impact on competitiveness & innovation NDP & NGP: Role of RDI in economic growth NDP & NGP: Role of RDI in economic growth TYIP : Develop and capacitate a knowledge economy IPAP: invest in innovation & technology to ramp up competitiveness in production & services sectors of the economy IPAP: invest in innovation & technology to ramp up competitiveness in production & services sectors of the economy

7. Investors and Flows, 2011/12 R&D survey 39% 43% 15%

8. 8 Technology Localisation Programme (TLP): Leverage public procurement opportunities Improve the technological capability of local firms leading to  Increased competitiveness (quality, cost, customisation)  Expanded capability (new products, services)  Expanded market (local and global) Industry Innovation Partnerships Programme Sector Innovation Funds DST Interventions DST tax incentive programme

9. Industry Innovation Partnerships Sector Innovation Fund

10. Motivation for IIP  DST allocated R500 million over 2013/14 MTEF to develop and implement the Industry Innovation Partnership (IIP) Programme  Key goals:  Leverage industry investment in RDI by stimulating increased RDI co-funding & participation by industry players in projects to maintain and increase their export market share  Mitigate against under-investment in technology & innovation in identified niche and strategic sectors of SA economy so as to improve their competitiveness  Key long-term outcomes measure will be increased sector contribution to GDP through stronger RDI-based industrial development

11. IIP Initiatives Titanium Development (existing CoC) Satellite Development & Manufacturing CSIR (Bio-manufacturing, Nano-upscaling, Bio-refinery & Photonics) ICT Industry Partnerships (CSIR Meraka) Nanotechnology Innovation Centre Sector Innovation Fund (SIF)

12. Sector Innovation Funds  DST intervention to enhance economic competitiveness of participating sectors  Encourages private sector to co-invest with government in RDI activities that address competitiveness and sustainability of participating sectors  Managed by Industry associations or bodies  Formal entities  representing interest of members  Industry identifies challenges & determines own RDI agenda

13. Key Performance Indicators  RDI outputs (HCD, knowledge products, scientific publications)  Absorption capacity and/or rate iro HCD  Knowledge/technology transfer  No. of knowledge products transferred  To whom (big companies/SMMEs; previously disadvantaged players; etc)  Jobs created or sustained  New enterprises created or supported  Amount of funding contributed by sector  Increase/sustaining of market share, including exports  Increased contribution to GDP (long term) Measured at impact, outcomes and output levels Some key performance indicators:

14. Complexities and considerations  Must use the process to better understand and appreciate the complexities of R&D funding in the private sector  Signaled that performance measure is not simply matching funding for the SIF but increases in the level of R&D within the sector (even in-house funding)  SIF is a crucial initiative under the proposed MTSF target 1.5% GERD by 2019  DST aims to secure continued public funding beyond the ECSP and at significantly higher levels

15. 2014/15 IF APPLICANTS Industry Association Initiative/Programme South African Minerals to Metals Research Institute Mineral Processing Citrus Research InternationalResearch for Citrus Export Marine Finfish Farmers’ Association of South Africa South African Marine Aquaculture Research Centre Paper Manufacturing Association of South Africa Paper Manufacturing Forestry South AfricaFuture Plantation Forests for the South African Bio economy Sugar Milling Research InstituteSugarcane Bio-refinery Research Programme Fresh Produce Exporters’ ForumPost Harvest Innovation Programme Marine Industry Association of South Africa Marine Manufacturing innovation Wine Industry Network of Expertise and Technology Wine Industry Innovation Sectors Supported 9 SIFs established by end 2014/15

16. Sectors’ Contribution to GDP SA’s GDP SAMMRI (8.8%) CRI (0.16%) MFFASA (0.026%) PAMSA (0.6%) FSA (1.2%) SMRI (0.7%) FPEF (1%) MIASA WINETECH (2.2%)

17. Future plans  Permanent budget line item - MTEF  Industry innovation partnerships with direct (mandatory) industry participation  Sector Innovation Fund aimed at transformation in key sector(s):  Existing SIF objectives  Localisation of  RDI capacity and services  Technology driven industry development and competitiveness  Transformation within the NSI  Institutions, researchers, etc  Contribute to other industry and economic development imperatives  E.g., Black Industrialists Programme

18. Overview of Environmental Innovation at DST Environmental Services & Technologies Water RDI Roadmap Waste RDI Roadmap Environmental Services WADER Waste RDI Implementation Unit Ecological Infrastructure Biomimicry Platform

19. Water RDI Roadmap How Problem Statement: 98% of all water resources already allocated Non-revenue water is 36% on average ~R7 billion / yr By 2030 demand will outstrip supply by 17% Problem Statement: 98% of all water resources already allocated Non-revenue water is 36% on average ~R7 billion / yr By 2030 demand will outstrip supply by 17% Problem Human Capital Development (HCD) (Skills) Human Capital Development (HCD) (Skills) Innovation (technological and non- technological) (Technology) Innovation (technological and non- technological) (Technology) Research and Development (R&D) (Evidence) Research and Development (R&D) (Evidence) Means Opportunities: Better coordination and improved decision making supported by the translation of research into practise More products and services to reach the market through a better coordinated water innovation pipeline National savings through targeted RDI investments (e.g. By reducing water losses to 15%, through innovation interventions, an approximate R3.5 bil would become available for investment in other needs/areas) Opportunities: Better coordination and improved decision making supported by the translation of research into practise More products and services to reach the market through a better coordinated water innovation pipeline National savings through targeted RDI investments (e.g. By reducing water losses to 15%, through innovation interventions, an approximate R3.5 bil would become available for investment in other needs/areas) Opportunities Use of sources Govern, plan & manage Supply infrastructure Operational performance Govern, plan & manage Efficiency Monitoring and collection Increase ability to make use of more sources of water, including alternatives. Improve governance, planning and management of supply and delivery. Improve adequacy of performance of supply infrastructure. Run water as a financially sustainable business by improving operational performance. Improve governance, planning and management of demand and use. Reduce losses and increase efficiency of productive use. Improve performance of pricing, monitoring, metering, billing and collection.

20. Environmental Innovation Programme

21. Pull together the research and commercialisation stages of the water innovation continuum. Demonstrate water technologies in operational environments (piloted at scale). Assess the performance, validity, impact (social, environmental, etc.) and suitability of the technology. Build multi-sectoral and cross- disciplinary partnerships in support of technology demonstrators. Disseminate information widely to promote technology adoption, investment, and user-confidence as well as communicate gaps in research, etc. Promote and support water entrepreneurship and relevant skills development in the water technologies space. Taking technologies out of the laboratory and proving them in real- world test situations Image: Adapted from SDTC, 2014 Water Technology Demonstration Programme

22. Waste and Environme nt Waste Logistics Performance Strategic Planning Modelling and Analytics Technology Solutions Waste and Society Waste RDI Roadmap Strengthen skills and generate evidence to optimise decision-making around the movement of waste across the country (logistics, assets, resources) Develop, evaluate, demonstrate, localise and deploy technologies to support municipalities and industry in diverting waste away from landfill towards value-add Strengthen skills in methods, tools, models and techniques and apply these to generate evidence to inform the management of waste Strengthen skills and generate evidence to inform decision-making, planning and policy development by government and industry Strengthen skills, generate evidence, deploy technologies to reduce the impacts of waste on receiving environments Deepen understanding of the socio-economic opportunities provided by waste, but also the threats that waste poses to human health How Problem Statement: 90% of South Africa’s waste goes to landfill Resulting in loss of resources to the economy Resulting in social (human health) and environmental impacts Municipalities face challenges in delivering services and diverting waste from landfill Alternative waste treatment typically more expensive than landfilling Problem Statement: 90% of South Africa’s waste goes to landfill Resulting in loss of resources to the economy Resulting in social (human health) and environmental impacts Municipalities face challenges in delivering services and diverting waste from landfill Alternative waste treatment typically more expensive than landfilling Opportunities: Preventing waste creates opportunities for industry to increase value- addition and competitivenes s Diverting waste from landfill creates opportunities for new direct and indirect jobs and enterprises Improved management of waste reduces risks to human health and environment Opportunities: Preventing waste creates opportunities for industry to increase value- addition and competitivenes s Diverting waste from landfill creates opportunities for new direct and indirect jobs and enterprises Improved management of waste reduces risks to human health and environment Human Capital Development (HCD) (Skills) Human Capital Development (HCD) (Skills) Innovation (technological and non- technological) (Technology) Innovation (technological and non- technological) (Technology) Research and Development (R&D) (Evidence) Research and Development (R&D) (Evidence) Opportunities Means Problem

23. Environmental Services Environment & Society Citizen Science – MiniSASS app SARVA Ecological Infrastructure Evaluation of NRM funding window of the Green Fund Developing a data and institution management portal for the Ntabalenga Catchment - DEA Biomimicry Platform Being developed with WRC – creating a community of practice on Biomimicry

24. Siyabonga isaac.maredi@dst.gov.za +27 12 843 8761