1. Budget and Strategic Plan FY 2008/9 David Phaho Presentation to the PORTFOLIO COMMITTEE ON SCIENCE AND TECHNOLOGY Date: 27 May 2008

2. Presentation Outline   Tshumisano’s Strategic Intent & Moral Purpose   Envisaged Outcomes for Business Plan FY 2008/9   Programme Review for FY 2007/8 Technology Stations and their scope Performance Review FY 2006/7 – FY 2007/8 SWOT Analysis   Business Plan for FY 2008/9 Strategic Imperatives FY 2008/9 Income and Budget Forecast : FY 2008/9 – 2010/11

3. Strategic Intent: To be within reach of every SME in the country through its Technology Transfer and related activities at Universities.

4. Moral Purpose To do what is right: The efficient and effective usage and deployment of public funds. To do what is worthwhile: Providing world class technology solutions and training to SME’s to enhance economic growth in South Africa.

5. Envisaged Outcomes for Business Plan   Increase the number and quality of SME’s assisted through referrals and linkages with other Agencies and Government Programmes.   Enhanced alignment with DST’s ten year Innovation Plan.   Enhanced Human Resource Development with specific emphasis on Internship Programme and Student involvement   Continuous Improvement to mitigate Structural Inefficiencies within the Trust.

6. Why SME’s?? SME’s generally have higher growth tendencies (sales, turnover, jobs) than larger firms SME’s accounts for a disproportion number of gross jobs created Benefit of Economics of Scope rather than Economics of Scale – nimble and shielded from Exogenous shocks Tends to be more Innovation intensive than large firms Ref. Schreyer, P. 2000. High Growth Firms and Employment, OECD Science, Technology and Industry, Working Papers, 2000/3

7. Technology Stations Programme PROGRAMME REVIEW for FY 2007/8

8. Technology Stations and Their Scope

9. Agro Processing and Chemical Cluster To Support the Chemicals and the Agro-Processing Industry. Formulations, Pharmaceutical and the Natural/Indigenous Products, Detergent & Paint. Testing and analysis in manufacturing low-end products.

10. Primary Manufacturing Cluster The secondary manufacturing cluster focuses on advanced manufacturing and value adding services within three critical industrialized sectors Specialises focus is in product development and prototyping Application of Smart materials, textiles and reverse engineering

11. Secondary Manufacturing Cluster This is a support cluster, with service of system automation and processing of materials. Material compositions and casting (foundry) solutions.

12. Performance Review FY 2006/7 -FY 2007/8

13. FY 2006/7 First Six months of FY 2007/8 Projected FY 2008/9 FY 06/07FY07/08FY08/09 Activities for SME Number of SME contacted _7563000 SME assisted 10835702600 Black Owned SME’s200118290 Females owned/ managed22165318 Training activities For one client/participation SME _35_ No of participating SME’s 332184400 Open to a group of SME / no of events _56_ Technology services Testing and Analytical Services _881_ Manufacturing / Prototyping _125_ Consultation, Technology Audit _54_ Product or Process improvement _252_ PROJECT: Applied Research, Design & Development. _117_ PROJECT: Research & Development _64_ Technology Demonstration and Training _163_ Internship Program Placed at Station 8799230 Place in related Industries _57_

14. Type of Technology support from TSP First six months of FY2007/08

15. Comparing three (3) financial years of TSP growth Past Current (Q1 & Q2)Projected FY 06/07FY07/08FY08/09 Activities for SME. Number of SME contacted_7563000 SME assisted1083 570 2600 Black owned200118290 Females owned/ managed22165318 Training activities For one client/participation SME_35_ No of participating SME’s332184400 Open to a group of SME / no of events_56_ Technology services Testing and Analytical Services_881_ Manufacturing / Prototyping_125_ Consultation, Technology Audit_54_ Product or Process improvement_252_ PROJECT: Applied Research, Design & Devl._117_ PROJECT: Research & Development_64_ Technology Demonstration and Training_163_ Internship Program Placed at Station8799230 Place in related Industries_57_ 20% compound increase of Technology Stations clientele = aprox. 1300 Technology base SME

16. Product Development Example

17. Adept Airmotive Ltd and Three Technology Stations Consortium (CUT, TUT and UJ) Technology Transfer Product Design & Development Development and Application of New Technologies Mechanical / Materials Testing Services Project Management Process Control and Monitoring Customized Education and Training Quality System Analysis and Design Part of South Africa 1 st Light Aircraft Engine Development   Tooled, Manuactured and Tested in South Africa Worldwide Inquiries

18. SWOT Analysis

19. Positive Negative Strengths Weaknesses  Consolidated mandate within national SME Development structure  Program accessibility to variety of SME’s in relevant sectors  Rapidly expanding network of SME’s served by programme  The Concept of Technology Diffusion to SME’s not adequately articulated  SME development alignment with Innovation Imperatives  Inadequate research output leading to low level of technology diffusion to SME’s.  Lack of understanding about the importance of Technology Diffusion to economic development. OpportunitiesThreats  Integration of Tshumisano into the Technology Innovation Agency  National Supplier Programme @ Dept. of Public Enterprises  Project funding from other relevant SME Developing Agencies  Staff turnover at Technology Stations and IAT’s.  Uncertainty about industrial policy namely, MIDP review  Critical skills shortage in key economic sectors  Growing competition from low cost countries e.g. Clothing & Textiles

20. Business Plan for FY 2008/9

21. Strategic Plan Summary 2007 - 2011

22. Attribution Gap Strengthen the Network of University based instruments servicing technology based Small and Medium Enterprises (SME’s) for participation in industrial value chains and promoting high growth economic sectors Programme Objective Component Objective   At least one Technology Station (TS) established in one of the 3 remaining provinces and planning phase underway for the other 2 provinces.   At least 10 % of academics and consultants working on Tshumisano Projects engaged on Research to pursue Masters or Doctorates in Science and Technology (Engineering) by the end of 2009/10 (baseline 2007).   At least 2500 SME’s assisted annually by Technology Stations and Institutes of Advanced Tooling (IATs) from 2007 until 2009/10   All government SME development and funding agencies and 1 in every 2 technology based SME’s aware of Tshumisano and its services.   Tshumisano occupying a permanent seat or allocated a permanent focal person in the Higher Education South Africa (HESA) and at least featuring once a year on the Agenda of the Council/Exco and reflected on the Annual Report of HESA by 2009.   All Tshumisano driven activities are meeting equity targets of at least 85% black people, 54% woman and 4% people with disability. Programme Indicators The level of Skills Development and Training at Tshumisano Initiatives enhanced   50% of the Universities (with TS/IAT’s) receiving funding from National Research Chairs.   50% training offered by the Technology Stations are fully Sector Education and Training Authority (SETA) accredited.   At least 85 interns admitted with the Technology Stations Program (TSP) per year and 80% of them placed in industry or becoming entrepreneurs within 6 months after training. Component Indicators   At least 100 SME’s products tested or developed per Technology Station per year as from 2007 to the end of 2009.   At least 10 SME’s secured contracts on tested products by stations by the end of 2009.   At least 12 products/tools designed, prototyped and tested per IAT per year. Technology based SME’s initiatives supported in adding value to enhance the competitiveness of their products The facilities of Tshumisano developed and fully utilized and the capacity of its employees and project leaders enhanced 1. Human Resource Development Components 2. Smart Industries Economic growth, wealth and employment creation, increased black and female business participatory and productive citizenship Impact - Indirect benefit 3. Institutional learning and development 4. Economic value added Tshumisano Trust activities strategically aligned with other stakeholders and promoted and marketed amongst target group   At least each TS working in collaboration with another on a specific project.   70/30 ratio usage of equipment by TS’s between SME related projects and University Research and Development (R&D) projects.   All staff members registered for academic qualifications and short courses and 80% successfully completed.   Tshumisano listed as a public entity by end of 2009   20% compound increase of Technology Stations clientele   One project implemented in collaboration with at least one stakeholder and/or agency   At least 8 SME’s referred to each Technology Station per year by another agency   20% annual increase in number of products, processing or services in the economy

23. Strategic Imperatives for FY 2008/9

24. Human Resource Development:  At least three (3) Technology Stations accredited with their respective SETA  At least 120 interns admitted with the TSP program and 80% placed in industry  Increase the Human Capacity at the Technology Stations and the IAT’s to ensure increased output for the program.

25. Smart Industries:  At least 100 SME’s products tested per Technology Station  At least 5 SME’s secured contracts on tested products per station  At least 12 products/tools designed, prototyped and tested per IAT  Additional Technology Stations (Mpumalanga and Northern Cape) -depends on availability of additional funding

26. Institutional Learning and Development :  Assist the Technology Stations within the clusters to work in collaboration with each other  Implement equipment audit with equipment usage log sheet at Technology Stations and IAT’s  All staff members at PMU and Centers registered for academic qualifications and 80% successfully completed

27. Economic Value Added :  20% increase on Technology Station clientele measured against targets for FY 2007/8  Increase number of projects in collaboration with other agencies, measure against numbers from FY 2007/8  Initiate a national marketing campaign for all stations to ensure uniformity and management of all marketing channels from the PMU.

28. Income Statement and Budget Forecast FY 2008/9 – 20010/11

30. GTZ Contribution FY 2008/9

31. German InputsBudget Euro Budget Rand Exchange Rate: @10.6/€(30.01.08) Bill of QuantityKind of Contribution 1 12 PMLocal Technical Advisor Organizational Development 32,000,--339,200,-- 212 PMGerman Tooling Advisor for Institute of Advance Tooling Initiative 60,000,--636,000,-- 3 International Consultancy Service; up to 45 days @ €320/day Short-term Visiting German Experts to Technology Stations/ IAT’s 100,000,--1,060,000,-- 4 Training Courses up to 10 assignments Further Education & Training Programmes in Germany for Staff Members of Technology Stations / IAT’s 5 3 TripsInternships ( after completion of 1 year internship at station) 6 2 Trips; up to 10 participants Information & Study Trips to Germany: - Stakeholder tour - Project team 7 Local Consultancy Service 344 days: @ 372 € Local consultancy services: SETA accreditation/ISOE x 3 Benchmarking (all stations) RALIS X 5 RALIS Reviews x 2 Review of RALIS tool 127,968,--1,356,466,-- 8 International Consultancy Service 28 days: @ 510 € International consultancy service: RALIS RALIS Review Review of RALIS tool 14,300,--151,368,-- 9 2 x publicationsPublications10,000,--106,000,-- 10 GTZ Overhead Costs (15%)50,000,--530,000,-- Total Budget 2008/2009 €394,268 R4,179,240

32. Qua Vadis Tshumisano Trust?

33. Department of Science & Technology’s Technology Innovation Agency (TIA)

34. TIA’s Core Mandate: Nurturing Innovation for Sustained Economic Development and Growth

35. BasicAppliedTech Develop Transfer & Proliferation NRF Specialist Research Funds International Research Funds TIA IDC Venture Capital SEDA PBF Publications/new knowledgePatents/new knowledge products

36. “Anchor Tenants” within TIA   Tshumisano Trust – Technology Transfer and Diffusion from Universities to Industry   Innovation Fund- Funding for protection of publicly funded research outputs   Biotechnology Innovation Centers – Biotechnology research and commercialization activities   Advanced Manufacturing Technology Unit (CSIR) – D evelopment of advanced materials technologies; product and process technologies; ICT and logistics technologies

37. THANK YOU!! Tshumisano Enterprise Centre, The Innovation Hub Lynwood, Pretoria Tel : +27(0) 12 844 0413 www.tshumisano.co.za “ Enhancing SME competitiveness through technology”