National Innovation Agency, National Advisory Council on Innovation, Academy of Science of South Africa briefings

Meeting report

Chairperson’s opening remarks
The Chairperson indicated that the purpose of the meeting was to hear briefings by three f the entities of the Department of Science and Technology (DST or the Department). He noted that science and technology played a crucial role in the economy of South Africa, and there was a need to be inclusive and extend it and its benefits to those in the rural areas. The DST, like other departments, had to support Small Medium and Micro Enterprises (SMMEs) so that they could utilise innovative technology to grow their businesses.

Technology Innovation Agency (TIA) briefing
Prof Rivka Kfir, Interim Chief Executive Officer, Technology Innovation Agency, indicated that innovation was a driver of technological growth and had the potential to contribute to higher living standards, and also to economic growth. The Technology Innovation Agency (TIA) was proposing a larger and more effective innovation system, closely aligned with private sector businesses.

She noted that the mandate of TIA was to support the state in stimulating and intensifying technological innovation, then develop and exploit it, in order to improve economic growth and the quality of life of all South Africans. This was reflected in its vision to be a world class technology innovation agency that stimulates and supports technological innovation to improve the quality of life for all South Africans. TIA essentially aimed to facilitate the translation of South Africa’s knowledge resources into sustainable opportunities. This was particularly relevant to a developing country such as South Africa, which still had massive inequalities in terms of access to resources and education.

Prof Kfir stated that TIA was established to bridge the “innovation chasm” and that “chasm” represented the gap between scientific research activities that yielded new ideas and the successful introduction of products and services emanating from those ideas into the market, ultimately for benefit to the broader society. TIA also aimed to bring about robust innovation value and to regularly deliver new and improved products, given that services were essential for long-term economic growth, and provided a competitive advantage for people, rather than focusing on finite physical resources.

Prof Kfir mentioned that the change in strategy at TIA focused on the following:
- the outcomes of Department of Science and Technology (DST)
- the international benchmarking study, recently completed
- The policies, strategic objectives and views of the Agency’s shareholder DST (the Ten Year Innovation Plan and the grand challenges)
- the National System of Innovation (NSI), which focused on current reality
- findings from a customer survey
- alignment with the Government policies and priorities such as the Medium Term Strategic Framework (MTSF), the Industrial Policy Action Plan (IPAP), the New Growth Plan (NGP) and the National Development Plan (NDP).

Prof Kfir said TIA aimed to provide for additional funding for technological competencies, specific value-adding services and to address the specific needs of its stakeholders. In addition, TIA also aimed to develop and implement a targeted stakeholder engagement plan. She emphasised that TIA focused on three components, namely, the innovator, investor and citizen. In respect of the innovator, TIA needed to offer greater focus on expertise, finance and non-financial services, a supporting infrastructure and enabling environment. Its services for the investor focused on the business acumen, sound programme, sound governance, thought leadership, value for money and de-risked investment opportunities. Citizen needs required consideration of the socio-economic impact and opportunities, and this part was very important as the DST in turn focused on ensuring that technological innovation would improve the lives of ordinary people.

Prof Kfir stated that TIA plays a number of roles within the Innovation value chain. It was a connector and catalysed partnerships between SMMEs, industries, Higher Education Institutions (HEIs) and Science Councils (SCs), to develop an enabling environment, and it supported sector-specific innovations for global competitiveness. It also played a role as an active funder, providing risk funding and support for innovators, to help them in their progress towards market entry. It also acted as facilitator for other funding at the later stage, in funding for commercialisation. It was also a service provider that reduced barriers of access to high-end skills and equipment for innovators, through its technology stations and platforms.

Prof Kfir said TIA had three funding mechanisms – the Seed Fund, Technology Development Fund and Commercialisation Support Fund. The Technology Development Fund received the largest chunk of the budget made available for TIA. Recipients from this Fund included HEIs and SCs, SMMEs and entrepreneurs.

Prof Kfir added that TIA also funded other programmes that were geared to support. Its Technology Innovation Programmes (TIPs) were collaborative and aimed to connect with other stakeholders along the innovation chain. Its Youth Technology Innovation Programme (YTIP) was aimed at the youth. Other programmes that it offered included the Technology Stations and Platforms Programme (TSPP), and the Innovation Skills Development (ISD) programme.

Prof Kfir said the 2014 Annual Performance Plan (APP) represented the aspirations of TIA to deliver on its mandate. It defined TIA’s strategic objectives that stressed the outcomes-orientated monitoring and evaluation approach of the Presidency. She summarised that the objectives were to provide customer-centric technology development funding and support, in order to stimulate an enabling environment for technology innovation, in collaboration with other role players who could assist TIA to achieve its mandate. She mentioned that TIA also planned to develop an effective and efficient internal environment, to successfully execute the strategy.

Prof Kfir then gave a more detailed explanation on the strategic objectives. Objective 1 aimed to  provide customer-centric technology development funding and support, citing the targets for technologies, products, process and services reaching demonstration stages, and another for the numbers of technologies, products, process and services taken up in the market, or commercialised. The amount of third party funding that was attracted in the TIA portfolio was another target.

Objective 2 focused on providing an enabling environment for technology innovation, in collaboration with other role players, and this included targets for the number of knowledge innovation products supported, in terms of prototypes developed, and patents registered. Further targets were set for prototypes and patents receiving follow-up funding. It had other targets for SMMEs receiving technology support from the Technology Stations and Institutes of Advanced Tooling.

Strategic Objective 2 was focused on TIA developing an effective and efficient internal environment to successfully execute its strategy, and this took into account considerations on its  investment approval turnaround time, the improved adequacy and effectiveness on its control environment, the funding on investments, as a percentage of the Medium Term Expenditure Framework (MTEF) and the need to establish a culture of high performance and innovation amongst employees.

TIA pursued government objectives 2 (healthy life for all South Africans), 4 (decent employment), 5 (a skilled and capable workforce to support an inclusive growth path) and 7 (vibrant, equitable and sustainable rural communities with food security for all).

Prof Kfir then presented the budget. The MTEF allocation for TIA had been significantly reduced. It would receive increases in the first two years but a decrease in 2016/17. The detailed budget breakdown, from 2014/17, (see attached presentation for full details) showed a decrease in some line items (administration) with increases in others (investments, biotechnology and industrial, and the Technology Station programme. The expenditure figures were also shown.

Prof Kfir then linked the budget allocations to the strategic objectives for 2014/15 (see attached presentation). She emphasised that TIA faced huge funding constraints, as the funding over the MTEF was reduced in total by R330 million. The baseline grant was reduced by R130 million for the current financial year, and there was no doubt that this would impact on-going programmes and projects. TIA aimed to mitigate the above constraints by reducing administration costs to an acceptable level, and introducing business streamlining initiatives. It also planned to motivate for transfer or rollover of committed funds and would be asking DST and National Treasury also for  additional funds. She also added that TIA was also forced to leverage other income for itself.

Prof Kfir set out some of the outstanding achievements of the TIA, of which it could be proud. These included:
- investing R424 million towards accelerating new technologies, services and products (supporting technology starts-ups, university spin-offs, SMMEs, SCs, Innovation and entrepreneurs)
- assisting over 2 000 SMMEs (through tech stations and platforms)
- developing a network of strategic industry partners
- establishing relationships with key funding agencies
- creating a conducive technology innovation “ecosystem”
- introducing a youth innovation support programme
- improving its financial management

Prof Kfir also provided examples of projects within TIA’s portfolio (see attached presentation for full details). TIA had invested R16.7 million in the Oestrogenic Bone Matrix (OBM) projects. It was supporting the Advanced Reagents and Kits of the Next-Generation DNA Sequencing, having invested R24 million. It had invested R18.7 million to develop and commercialise the Sterile Insect Technology (SIT) for False Codling Moth (FCM). It had invested R6.77 million in the “FibreLux” Device. TIA had funded the  Coalgaeand project since inception, with R24.4 million. R15 million was invested into an Electronic Price Labelling System. In the Electrical Current Sensing Technology (“eSentry”), TIA had invested R1.1 million. TIA had also supported, to the tune of R500 000, an Electricity Theft Detection Device (Saggitarious Serpentarious).

Prof Kfir stressed that the core values of TIA included an emphasis on fostering the culture of teamwork that valued collaboration and co-operation. It emphasised a high degree of professionalism, which included applying the most appropriate skills, competencies, experience and knowledge to projects. It did this in order to achieve excellence and held itself accountable to all stakeholders to deliver exceptionally high standards of work and performance. Its focus on integrity meant that it emphasised that everyone must strive to do what they said they would, and when they said they would do it, with commitment to keeping those promises. It was transparent, in that it emphasised engagement in inclusive and open communication, with all parties holding each other accountable. Finally, TIA fostered a culture of innovation, and would continually nurture and implement new ideas from the staff and stakeholders that would enhance the way that matters were done.

The Chairperson thanked TIA and indicated that the more detailed presentation paid more attention to development of rural areas, which was mentioned as a priority of the National Development Plan (NDP) and State of the Nation Address (SONA).

Discussion
The Chairperson indicated that South Africa had a problem of inequality, which meant that the majority of people were excluded from participating in the economy.  He asked about the possibility of TIA coordinating with the SMMEs who could benefit from scientific innovations.

Prof Kfir responded that technological innovations did not sometimes translate to the market and she stated that scientists needed to be taught entrepreneurial skills in order to commercialise their technological innovations. She agreed that rural areas were important in South Africa and TIA focused on localisation of the indigenous technology so as to assist, particularly in developing agriculture.

Ms Khungeka Njobe, Chairperson, TIA, thanked Committee Members for the compliment on the work that had been done by the TIA in a very short period of time. She confirmed that TIA was absolutely attempting to establish a firm relationship with the SMMEs, as this was also stipulated in the NDP and SONA. TIA also had a partnership with Service Sector and Training Authority(SSETA).

The Chairperson asked for more detail on some projects. He wanted TIA to explain further the statement that there was no rejection on the Oestrogenic Bone Matrix (OBM).  He also asked about the possibility of turning wattle trees into coal, and asked whether TIA was aware of that project. He commended the innovation of creating electronic price labelling (EPL) and asked about the possibility of inventing a gadget that could also determine the expiry date of food in the supermarkets.

Prof Kfir responded that once the bone was grown by OBM then it was no longer regarded as “a  foreign object”. She was not aware of the project investigating the turning of wattle trees into coal, but perhaps the Department of Environmental Affairs (DEA) was responsible for that project. She said the possible invention of a device that could determine the expiry date of goods was likely to be challenging, as there were some items that reflected two different expiry dates.

Dr A Lotriet (DA) thanked TIA for the presentation and indicated that it was doing wonderful work in ensuring that South Africans were able to come up with innovative technological devices.

Prof Lotriet wanted to hear the current status of the TIA, following the forensic report and the dismissal of the former Chief Financial Officer (CFO) and Chief Executive Officer (CEO). She asked if it was correct that the Board Chairperson had referred some of the matters to the Hawks for investigation. She also stated that it was mentioned that there was confusion on the mandate of TIA, especially on the issue of return on investment, and wanted clarity on that point.

Ms Njobe responded that indeed the former CFO and CEO were dismissed, as a result of forensic investigations. The forensic investigations were commissioned by the Board. She said this was a matter of public record, and the matter was being addressed and answered to by the Minster. She also added that matters arising from that forensic investigation had been referred to the Hawks.

Ms Njobe confirmed that there were strong questions regarding TIA’s mandate and she mentioned that Members needed to refer to the TIA’s founding legislation, which spoke broadly of the mandate that was given to TIA. She emphasised that TIA needed to strengthen its relationship with rural communities, in order to ensure that technological innovation impacted on the lives of poor people.

Mr M Kekana (ANC) congratulated TIA and the good work it had achieved in a short space of time. However, he wanted to hear why the baseline grant was reduced by R130 million for the current financial year (as stated on slide 23) and also wanted precise figures on the number of SMMEs that were assisted by TIA (slide 24). Mr Kekana also would have liked TIA to publicly declare the name of the funding agencies, to ensure transparency and avoid the possibility of being funded by agencies that had objectives different to those of the South African government.

Mr Werner van der Merwe, Acting Chief Financial Officer, TIA, responded that baseline grant was reduced because TIA’s financial statements for the past few years showed that it had accumulated a surplus.

Prof Kfir responded that there were precisely 3 674 SMMEs that were assisted. She confirmed that TIA was funded by a number of agencies, including Industrial Development Cooperation (IDC). TIA made sure that it was funded only by agencies that were fully aligned to the objectives of the South African government.

The Chairperson thanked TIA for its presentation and the Members for their contributions. He reiterated that science and technology needed to be inclusive, given their potential to contribute to human development, even for those located in rural areas.

National Advisory Council on Innovation (NACI) briefing
Dr Steve Lennon, Chairman, National Advisory Council on Innovation, stated that this was his final day as Chairman of the National Advisory Council on Innovation (NACI), and the DST would be introducing the new Chairman on 01 August 2014.

Dr Lennon indicated that the mandate of NACI was to advise the Minister for Science and Technology, and, through the Minister, the Minister’s Committee and Cabinet, on the role and contribution of science, mathematics, innovation and technology, including indigenous technologies, in promoting and achieving national objectives. Its Terms of Reference (TOR) for the NACI Council made it clear that the priority was to display an understanding of government priorities and policies in relation to the National System for Innovation (NSI). After consultation with the Minister of Science and Technology, NACI would advise on priorities and the setting of the agenda for Science Technology and Innovation (STI).

NACI was also mandated to undertake special assignments, including requests for rapid policy advice. From time to time it would also provide a progress review on the state of innovation in the country. NACI was also playing a collaborative role with Minister of Science and Technology in convening the annual STI Summit.

Dr Lennon set out some of the strengths and achievements of the NSI in the last few years, which included:
- A considerable increase (15%) in STI PhDs awarded between 2011-2012.
- 6% increase in the number of South African patents granted by the United States Patent and Trademark body, between 2010-2012.
- An improvement of 5% in the Technology Balance of Payment between 2010 and-2011
- An increased number (3.8%) of publications in high-impact publications between 2011 and 2012
- Overall, increased proportion of STI enrolments and S& T graduations (2%) between 2010 and 2011

Dr Lennon also indicated that the weaknesses or challenges facing the NACI included:
- The lack of an effective Monitoring and Evaluation (M&E) system across the NSI, pointing to the need for an evaluation framework with progress indicators for specific policy prescripts, such as the NDP or the IPAP
- the fact that the measuring system was limited to R&D activities
- Poor integration across the implementing agencies in the NSI system
- The challenge of “Missing Role Players”, especially from  business and the Not for Profit Sector
- Weak capacity for scale within government in general
- Shortage of good quality skills and innovation

Dr Lennon stated that this meant that NACI had adopted a new focus. The current skills mix was unbalanced and skewed towards high end skills. It had been decided that more investment funding in the sector must be made accessible to the SMMEs. NSI was currently the inclusive domain of the science community and there was a need to reach out for greater inclusivity. The infrastructure across the sector must be aligned to the NDP and SONA vision.

It was noted that there were flagship projects, on which future building could be done, such as the
Square Kilometre Array (SKA). It was decided to invoke champions and role models to nurture and highlight successful innovation activities

Dr Lennon emphasised that the key government challenges and priorities included fighting the scourge of youth unemployment, poverty and the persistent income inequalities. NACI aimed to contribute to government priorities. Its medium term strategic framework for 2009 to 2014 was to focus on education and skills, and equip graduates with skills that enabled them to enter the labour market. The role of infrastructure was also viewed as critically important, to ensure that all South Africans could participate in developing scientific innovation. Dr Lennon also stated that NACI focused on ensuring that it contributed to an effective, efficient and development-orientated public service.

Dr Lennon said the NDP put emphasis on the importance of science and technology innovation, education and training innovation, and industrial and social innovation. NACI would now seek to further strengthen its focus on innovation for development, particularly highlighting small business, and food security issues, through the bio-economy strategy, and educational skills as highlighted by the President during the SONA.

Dr Lennon also noted the key achievements on policy advice as delivered by NACI in 2013/14. These had included giving policy advice on:
- gender mainstreaming in the STI sector
- strengthening of skills in Mathematics, Science and Technology
- up-scaling innovative solutions in support of SMMEs
- infrastructure for Research and Innovation
- assessment of the National Innovation System (STI indicators)
- policies and legislations affecting the implementation of the Bio-economy strategy
- advice on a “refocused NSI” and better alignment with the NDP

Dr Lennon also noted the main NACI achievements and other projects finalised in 2013/14, which were listed as:
- Establishment of an E-learning Platform for Gender Mainstreaming. This was the platform that guided NACI staff to incorporate gender, race and disability into the policy advisory process
- Completion of a booklet on understanding mainstreaming, as a practical guide to gender and disability mainstreaming
- Completion of a booklet on South African Science and Technology Indicators
- Holding of a consultative workshops on skills, the bio-economy, and a Design-Thinking workshop on a refocused NSI

Dr Lennon then set out the policy advisory activities that were planned for 2014/15, which covered policy work on:
- governance, structuring and coordination of the NSI
- biomass refining, as a competitive niche in the Bio-economy
- indigenous technologies and technology management of biodiversity in the tourism industry
- Science and Technology and Innovation Indicators
- Innovation Skills in the NSI
- Gender Mainstreaming

Dr Lennon indicated that NACI was proud of what it had achieved in a very short period of time. Its other plans included induction and orientation for the new Council. It would be working to finalise the NACI Strategic Plan for 2015/16. There would be stakeholder engagement on the NACI consultative workshops, which would include policy work and participation at the annual STI Summit.

Dr Lennon indicated the budget figures for the NACI (see attached presentation for details) and also set out the amounts by line items, highlighting the allocations, and their differences across the three years, for compensation of employees, and goods and services.

Prof Jennifer Thomson, Council Member, NACI, said that she was excited about the role played by NACI in the improvement of rural infrastructure, which should play a critical role in the development of poor people in rural areas. She also added that infrastructural development was a priority of government, as it was viewed as the catalyst for economic growth, job creation and poverty reduction.

Adv Louisa Zondo, Council Member focusing on gender issues, NACI, indicated that NACI and others needed to focus on narrowing down the gender inequalities within the departments of the public service, especially in the highest positions. She indicated that the DST needed to formulate a National Policy on Gender and an Equality Framework that would put more emphasis on getting women and other marginalised groups working in the field of science and technology.

Discussion
The Chairperson thanked NACI for its succinct, yet detailed presentation.

Mr Kekana indicated that he had no questions, but wanted to and congratulate NACI for its exceptional role in displaying an understanding of government priorities and policies in relation to NSI.

The Chairperson wished Dr Steve Lennon well for his future endeavours.

Academy of Science of South Africa (ASSAf) briefing
Prof Daya Reddy, President and Council Chair, Academy of Science of South Africa, said that the mandate of the Academy of Science (ASSAf) was to honour distinguished scholars in all fields of scientific enquiry, and also generate evidence-based solutions to national and global challenges.

Prof Reddy emphasised that ASSAf goals included:
- Recognition and reward of excellence
- Promotion of innovation and scholarly activity
- Promotion of effective, evidence-based scientific advice
- Promotion of interests in and awareness of science education
- Promotion of national, regional and international linkages

Prof Reddy stated that ASSAf was aligned with government goals, in that it contributed to the strengthening of the skills and resource base. It also played a significant role in regional development, African advancement and international cooperation. Its activities contributed to the improvement of the health profile of society, as also to the improvement of rural development and food security, and to the improvement of environmental assets and natural resources.

Prof Reddy described the various programmes under which the work of ASSAf was divided (see attached presentation). Its Governance and Administration programme focused on promoting good governance, which included a number of factors like compliance, audits, financial and human resource management, and efficient execution of Council decisions. Its recognition and involvement of Members included annual awards, Members’ elections, ASSAf panels, Member database and the scholarly lectures. ASSAf also focused on improving the percentage poll in Members’ elections and tried to promote representation of previously disadvantaged groups. 

The Policy Advisor Programme focused on undertaking evidence-based consensus studies in key national priority areas, and also increasing the generation of assessment studies in key national priority areas. ASSAf was planning to host workshops on topics of national importance, and conduct commentaries on government policies. It was very important to achieve localisation of evidence-based reports, which reflected the views of South Africans. ASSAf also planned to monitor the impact of study reports, so as to measure its effectiveness in broader society.

Prof Reddy also stressed that it was critically important for the Policy Advisor Programme to focus on different fields, including health studies, humanities, science for poverty alleviation, bio-safety and bio-security, and education studies. Its Health studies focused on a number of topics, and these included a study on Tobacco Control Policy Change in sub-Saharan Africa. ASSAf had participated in a collaborative study of the root causes for low vaccine coverage and under-immunisation of the African child. ASSAf had furthermore implemented a consensus study on reproductive health of adolescents in South Africa.

Its Educational Studies programme focused on the promotion of inquiry-based Science Education (IBSE), and the implementation consensus study on the Revitalising of Agricultural Education and Training in South Africa. Prof Reddy indicated that ASSAf also prioritised on science for poverty alleviation and this focused more on revitalising Standing Committees and developing action plans and alignment with government priorities. The emphasis in humanities was to organise an international conference on humanities, and also to engage with key stakeholders to promote humanities in South Africa. The bio-safety and bio-security focused on a complete study of these issues in South Africa

Under the Scholarly Publishing Programme, some of the ASSAf communication and publications included work with the Marketing Academy, production and dissemination of ASSAf Policy Advisory Reports, and monitoring of the impact and uptake of evidence-based reports. ASSAf produced and disseminated the South African Journal of Science (SAJS), Quest Magazine, and monitored the usage and impact of Quest Magazine in schools and other learning institutions.

The work under the other programmes, for liaison, communications and the Secretariat, included ASSAf’s assistance in helping to promote science awareness among youth, through participating in science events, and through engagement and cooperation also with government, learning institutions, science advancement entities and business.

Mr Morakeng Chiloane, Financial Manager, ASSAf, presented the projected budget summary for the MTEF period, from 2014/15 to 2016/17. He tabled the budget figures, and noted that the total projected income was expected to show a slight decline, over the years 2015 to 2017 (see attaché presentation for full details). Expenditure projections also showed a concomitant decline.

Discussion
The Chairperson thanked ASSAf for its good presentation covering a number of issues. He had hoped that the presentation would cover the support to SMMEs, as this was a critical area that the government focused on as the solution to youth unemployment, poverty and persistent inequalities.

Mr Kekana was concerned that the presentation also did not cover the issue of transformation in the science field, pointing out that many township and rural schools were still lagging behind in entering the field. He requested that the Committee Members do an oversight visit to ASSAf, to be able to observe whether racial inequalities were being taken into consideration.

Prof Reddy responded that there was no doubt that science and technology needed to transform the lives of ordinary people and the main purpose of ASSAf was also to create interests around science and technological innovation. He said it was of concern that in rural areas there were still capacity issues and a lack of infrastructural development, and this needed to be solved in order to expose students to science at an early age.

The Chairperson repeated that science and technology had the potential to stimulate economic growth, create job opportunities and reduce chronic unemployment. The issue of rural-urban migration was caused by skewed infrastructural development, as people were moving to the cities to search for better opportunities. He emphasised that all entities needed to focus on rural areas and also ensure that technological innovations were able to transform the lives of ordinary citizens. The mandate and objectives of the entities needed to reflect an understanding of the government priorities and policies.

The meeting was adjourned.