Briefings were given to the Portfolio Committee by four of the Department of Science and Technology (DST) entities, namely the National Research Foundation (NRF), the Technology Innovation Agency (TIA), the South African National Space Agency (SANSA) and the Council for Scientific and Industrial Research (CSIR).
The NRF advised the Committee about the new board which had taken office, as well as the new strategic period for the organisation -- Vision 2020. The NRF’s budget had almost doubled and targets were being met, sometimes even overachieved. Attention was drawn to the fact that the NRF had received a clean audit for the second year in a row. The outcomes for the new strategic period, as well as the five programmes according to which the NRF was divided, were described. The entity’s finances and the large increase in contract funding came under consideration.
Members said the Foundation needed to liaise with tertiary education institutions to try to retain the country’s young researchers and stem the brain drain. They also questioned the funding for the Square Kilometer Array telescope, which was now in the Meerkat development phase. The NRF had only the cost of the completion budget reflected in the presentation for the MeerKat project, and it still needed to engage with the DST about the operational costs. MeerKat would continue to be a South African telescope for several years into the future while the SKA telescope was being built, and the NRF had not yet finalised the costs involved in running MeerKat.
TIA’s presentation drew largely on the recent change in leadership as well as the internal restructuring of the entity. Although concerns were expressed by the Members, TIA assured them that the transition was in the process of stabilising. Details of TIA’s two major streams were discussed, one being the strategic technology areas of the organisation and the other being the programmes. TIA also took the members through its financing, noting a significant reduction in baseline funding. The TIA had however risen to the occasion by looking into alternative streams of income, as well as cutting down on operational costs. Questions from the members revolved around the issue of partnerships, the company’s restructuring, as well as the budget cuts.
SANSA briefly took the Committee through its seven goals as well as its key performance indicators. Questions by the members concerned the usage of the data gathered by SANSA, its role in addressing societal needs, as well as its relationship with Denel.
The Council for Scientific and Industrial Research (CSIR) said the critical challenges facing South Africa included inequality, poverty and unemployment. The importance of CSIR to contribute to the alleviation of these challenges through science and technology could not be over emphasised. It gave examples of the numerous developments and innovations which the CSIR had introduced in the fields of health, industry, defence and security, the built environment, the natural environment and energy. It also collected data to mitigate and adapt to climate changes.
There was huge interest in the use of hydrogen energy for cars and portable devices, to reduce greenhouse gases and emissions. The CSIR was currently testing hydrogen storage materials, as high pressure tanks were needed that risked explosion. Storing energy was the major challenge when it came to renewable energy, as it was generated during the day but used at night. The key lay in certain materials like lithium, which was not present in South Africa. South Africa did, however, have manganese. The CSIR was looking into creating a combination of manganese and lithium to form storage materials. It was also researching platinum and palladium combinations to store fuel cells. The aim was to use value addition, relying partly on local minerals which were in abundance. There was potential to develop a new industry and processing pilot plants to do such work.
There were no questions from Members. The general consensus of the Committee was that they were thrilled with the work of the CSIR, especially its teamwork, and were looking forward to visiting them on site. The Chairperson encouraged the CSIR to continue with its good work.
Chairperson’s opening remarks
The Chairperson highlighted the importance of science and technology, especially in the transformation of the country. Science and technology was one of those areas which must be kept in line with global standards, despite South Africa being a developing country. It was also important to recognise those who have been previously excluded from the field of science and technology and to aid them in building their knowledge and innovation. One must have a balance between having good standards while at the same time being inclusive so that everybody benefited.
Briefing by National Research Foundation (NRF)
Dr Beverly Damonse, Acting CEO, NRF, said that it was an interesting period for the NRF, given that the new board had taken office in October 2014 and it was the end of their Vision 2015, which brought them to the beginning of a new vision for the next five-year period. In all of this transition, the NRF remained guided by its mandate which at its core served to promote and address new knowledge generation, human capacity development and the provision of research infrastructure. The NRF Act, which provided this mandate, was currently under amendment, especially concerning the role of public engagement. The NRF operated within a complex, multi-disciplinary environment and remained guided by its strategic environment. In line with the transformation in gender, the NRF was especially guided in its funding and funding requests by the ministerial guidelines for improving equity in the distribution of bursaries and fellowships.
During the previous five year period -- the Vision 2015 -- the NRF’s budget had nearly doubled to almost R4 million. The NRF had achieved, and sometimes even over-achieved, targets that had been set, specifically in the research output area, in respect of the number of doctoral students as well as the number of rated researchers. The Foundation was cognisant, however, that it had just missed the transformation targets in terms of the number of black and female rated researchers. The numbers would be finalised only in May for the year of 2015, however, and the targets were expected to be reached. All in all, the NRF had moved quite a far way in terms of science and technology and in terms of driving a knowledge economy.
Dr Damonse indicated that the strategic outcomes of the vision for 2020 were built on transformation, service culture, excellence and sustainability. The NRF’s vision of catalysing knowledge production would be in the interests of societal benefit. The mission for the Vision 2020 would be to contribute to the knowledge economy in South Africa by attaining at least 1% of global research and development output by 2020.
In thinking through its new strategy going forward, the NRF had looked at six strategic outcome orientated goals:
- an internationally competitive and transformative research system;
- leading-edge research and infrastructure platforms;
- a vibrant and globally connected national system of innovation;
- a representative research and technical workforce;
- a scientifically literate and engaged society;
- world-class benchmarking and grant making systems.
In order to reach these areas, the NRF was guided by eight objectives. These illustrated what it was the NRF did in ways that were measurable. Each of these objectives would help the NRF in achieving its outcomes.
The implementation wheel at its centre stated the purpose of the NRF, which was to catalyse knowledge production -- not in an end to itself, but to benefit the whole of society. The word catalytic highlighted the fact that the NRF could not, and was not meant to, do everything in terms of the research environment. What the NRF could do was to provide a starting point, for example the provision of a bursary or initial research funding. Everything the NRF did must be checked through the lenses of the tenets of transformation, excellence, service culture and sustainability. These tenets formed the second circle. The third circle consisted of the eight strategic objectives, which were measurable, and in the end the NRF would be able to see whether they had helped to achieve the desired impact. The outer edges represented the strategic outcomes of the NRF, namely what it was setting out to achieve. The NRF was a diverse organisation with a high level of interconnectivity. The high level of overlap illustrated that there were many objectives that would allow it to reach one outcome.
The NRF’s work was divided into five programmes, according to the guidelines given by the Treasury. Each programme had a budget and each programme has indicators. The five programmes were:
- Science Engagement.
- Research and Innovation Support and Advancement (RISA).
- National Research Facilities: Nuclear, Biodiversity, Environmental and Conservation Sciences.
- National Research Facilities: Astro Geosciences.
There were three main sources of income for the NRF. The first was the medium term expenditure framework (MTEF), which was the baseline funding. It had increased by 3,6%, but due to this being a lower rate than inflation, it had actually decreased. Other sources comprised of the ring-fenced funding, which hadexperienced a major spike, granted by the Department of Science and Technology (DST). The third source was contract funding, which was funding provided for very specific purposes. What could be perceived as a drop was merely the reassignment of funds from the contract to MTEF allocation or ring-fenced funding. Overall, the increase in the budget had been largely due to ring-fenced funding, or more specifically, contract funding.
Dr Damonse showed trends and gave an indication of how the funds were allocated according to programmes, or different ways of working. The funding for Square Kilometre Array (SKA) SA was shown separately, as the funding was so huge it would skew the other astronomy graph. The total for the 2015/16 budget period included carry-over funds. The SKA SA was now in the MeerKat development phase, and that money would be utilised to put up the remaining 61 dishes. The goal was to have completed this task by 2017/18, which accounted for the decrease during that period.
After discussing further aspects of the allocation of the NRF’s funding, Dr Damonse moved on to programme one -- the corporate programme. This was aimed at achieving strategic outcome number five, and dealt mainly with corporate finance and administration. The main indicator was to aim for an unqualified report and to keep the NRF’s internal and external audit findings minimal and monitored. The next two objectives, still relating to programme one, were to improve the NRF’s talent management and to grow the NRF’s influence, impact and reputation. Therefore the focus of programme one would be: improving the information communication technology (ICT) systems and network access;
- advancement of open access through institutional repositories;
- continued improvements in supply chain management (SCM) processes through the rollout of the workflow system;
- implementation of the NRF communications strategy both externally and internally;
- targeted recruitment, ensure diversity, and improve productivity through the new Integrated Performance Management System (IPMS);
- achievement of a clean external audit.
The NRF had achieved a clean audit for the second year in a row and had been congratulated by various members of the DST.
Programme two referred to science engagement. The NRF worked with the DST, which had released a new framework which would help the NRF to co-ordinate across the system. The NRF was going to entrench the indicators through all parts of its business. The main aim, however, was to connect the research community to society, so going forward there would be a focus on giving effect to the science engagement framework, building capacity, working with the chairpersons and with both sets of national facilities.
Programme three was where the bulk of the funding was sitting. It was also where the NRF was really driving its transformation strategy, leveraging the NRF’s international reputation and supporting fundamental research. The human development pipeline showed that the NRF’s funding went from when someone entered the system as a student, to the end of its very high-end strategic investments, such as the Chairs and the Centres of Excellence. The high end funding in next generation researchers, the Chairs and the Centres of Excellence was also illustrated. The NRF was trying to build supervisory capacity, as well as increase the number of students. The funding line for the Technology and Human Resources for Industry Programme (THRIP), which was funded by the DTI, was decreasing. This was because it had been reintegrated into the DTI and would not be run in its current format by the NRF. Over the next financial year, RISA was going to continue to focus on human capacity development. In addition, it would continue its infrastructure development. Internationalisation was also very important and focus would be given to the African agenda.
Programme four talked to the NRF’s national facilities. There were two types -- one in programme four and one in programme five. Programme four concerned the nuclear, biodiversity, environmental and conservation sciences, and consisted of four projects which promoted globally competitive research and innovation. These involved practising scientists who were producing research papers and who were being used by the community. The international engagements of the national facilities were very important in keeping them at a high standard. New infrastructure was also important in this regard and significant investments had been made in the nuclear sciences. Much of the key activities for the financial year were related to infrastructure.
Programme five was related to the astro-geosciences. The astronomy subagency catered exclusively for multi-wavelength astronomy, specifically the disciplines of radio, optical and infra-red astronomy.
They were trending postgraduate students, collaborating with international partners. The SKA SA project would focus mostly on the completion of the MeerKat project.
In conclusion, Dr Damonse mentioned some key issues that the NRF would pay attention to moving forward:
- the declining baseline budget;
- the increase in operational costs;
- implementation of the science engagement strategy;
- ageing infrastructure;
- uncertainty over the National Zoological Gardens (NZG) transfer to the SA National Biodiversity Institute (SANBI)
- establishment of the Astronomy sub-agency;
- maintaining a balanced portfolio of investments.
The Chairperson drew attention to the fact that the Members were part of an oversight committee and their interest was to see how the NRF was contributing to the transformation of South Africa. He was impressed with what they had achieved and felt it important to advocate on behalf of the NRF to help them be where they wanted to be.
Dr A Lotriet (DA) firstly commended the NRF on having a clean audit for the last two years. She then asked what the actual effect of the declining baseline budget would be in terms of the NRF’s activities and targets. Was the NRF in any way in conversation with the Department of Higher Education and Training in terms of keeping young researchers at university? A big problem was that students left after obtaining their Masters or Doctorate degrees. The universities often could not compete with the private sector in terms of salaries. Another issue was that of black academics, and whether the NRF was in conversation with the Department of Higher Education and Training as to how one could keep young black researchers as academics.
Mr N Koornhof (ANC) had one question relating to SKA SA. It was currently a huge investment, but it dropped down to around R218 million in 2017/18. He asked whether it would stabilise around that figure. He also asked about the concern regarding ageing infrastructure at the national research facilities, and what this entailed.
Ms L Maseko (ANC) also congratulated the NRF on its clean audits. She asked whether the NRF had engaged with Public Works for help with regard to the ageing infrastructure, so that it iwas not operating independently. When would the acting CEO position become a full CEO? The issue of the brain drain was worrying, but on the other hand, at some stage one began to contribute globally. Despite this, however, South Africa’s resources and investments were going to other people. She asked whether the NRF had any contracts with graduates stipulating that they would have to work in South Africa for a certain number of years? She also mentioned that doctors who were being trained did not want to work in rural areas, while there were actually volunteers from Cuba who went and worked in such areas. She asked whether the issue of the carried forward funds was allowed by the Treasury. She also wanted to know where South Africa was standing now with regard to the target of attaining 1% of global research and development output.
Mr C Mathale (ANC) started by commending the NRF on the new leadership that had come in and said he was sure the issue raised about the new CEO would be dealt with speedily. He expressed concern over the increasing operational costs, and asked how the NRF was going to work around this since they would not be able to maintain such an increase over a prolonged period due to the fact that the budget was not likely to increase. He also noted the decline in usage of the NRF’s research facilities in the astro-geosciences, and asked what the cause of this might be.
Dr Damonse responded first to the issue of the baseline budget. Overall the funding had increased, which was largely due to contract funding and much of that funding was covered through the NRF’s targets. The baseline funding was where the NRF had some discretion, but it was also the funding used to fund the operations of the organisation itself in areas like salaries. It was those areas over which the NRF had some control and where it would have to exercise some prudence. She also mentioned that the labour negotiations in terms of salary increases would have to be done in terms of the organisation’s mandate, because anything beyond that would have an impact. Issues such as the cost of compliance and supply chain management, and even reporting, had meant that the NRF had now set up governance measures for fairly extended internal audit and supply chain management at the corporate level, and at each of the other levels. Those were the costs which the NRF was needing to manage much more stringently, and it was keeping a very close eye on that.
Another way in which the NRF was managing its funds was by cutting down on travel costs by making use of video conferencing, as well as instituting certain internal issues around catering, etc. All in all, the NRF was doing what it could from an operational perspective. Dr Damonse admitted that at some point the balance was very tenuous, but the NRF was aware of it and would continue to manage it.
The NRF had also been asked by the DST to look at the number of contracts and to see how it managed the funding between the entities. This was an ongoing conversation, and there was a commitment on both sides to continue with operational efficiency in line with Treasury regulations while looking for a solution. The other important aspect was that of leveraged funding -- partnerships with other organisations where they also took on some of the burden. Dr Damonse mentioned an example, namely the new chair. It was possible that the Department of Health would make a significant contribution because it concerned HIV prevention, which meant that the NRF would still have the funding available, but the burden did not fall solely on the NRF and the DST.
Dr Damonse responded to the question regarding the relationship with the Department of Higher Education and Training (DHET). She said that there were strategic and ongoing trilateral meetings between the between the DHET, the DST and the NRF. This had significantly improved relationships and also aided in recognising overlaps, as they were also interested in keeping young researchers at university. Thus the increase in bursary funding, the increase in number of bursaries as well as some of the listed interventions, such as early career research awards, were aimed at retaining that group. She noted that competition from the private sector was very strong and the NRF could not compete if it did not have a funding allocation that was able to support both the researchers’ research and their living costs.
Dr Damonse then moved on to the issue of the SKA. The drop in the budget was related to the MeerKat project which would be up and running by that time. In the meantime, negotiations were taking place around the international commitments. The building of the MeerKat was South Africa’s contribution to the SKA. Once the NRF reached this stage, it had to continue to converse regarding international commitments. The NRF was hoping that by that time, the international contract between the parties would kick in and take effect, since nothing had been signed yet. The details were not available at this particular time, however.
Prof Nithaya Chetty, Deputy CEO of Astronomy, said that the NRF had only the cost of the completion budget reflected in the presentation for the MeerKat project, and it still needed to engage with the DST about the operational costs. MeerKat would continue to be a South African telescope for several years into the future while the SKA telescope was being built, and the NRF had not yet finalised the costs involved in running MeerKat.
Dr Damonse referred to the question about the Department of Public Works. The National Zoological Garden was the entity that worked the most with Public Works in terms of infrastructure and maintenance. However, the other infrastructure that the NRF was talking about was scientific infrastructure. In that sense, Public Works was not involved. It was clear that a lot of new infrastructure was coming on board, and these were all additions or enhancements to what was currently there. The NRF was making sure that maintenance funding was available for all the new infrastructure. It must be recognised that in order to stay internationally competitive, the NRF had to make sure that the infrastructure was at that level as well.
Prof Loyiso Nongxa, NRF Board Chairman, referred to the discussions about the timelines relating to the filling of the position of the NRF CEO. He said that interviews would be conducted around July/August. Depending on whether the candidate was internal or external, it could take another three months thereafter. He admitted that it was not an ideal situation to have somebody in an acting position, and he would give some of his own insights -- not those of the board -- regarding the issues around it. There were some significant issues around the NRF and the board which were beyond the control of anybody, and which had had an impact on the matter. Firstly it had not been foreseen that Dr Albert van Jaarsveld would leave the NRF and go to the University of KwaZulu-Natal for the simple reason, amongst others, that his term had just been extended. Prof Nongxa had also chatted with him and he had not mentioned an interest in applying for the position of vice-chancellor. Therefore the previous board had not foreseen that he would leave quite soon. The new board had inherited the process of filling that position.
The other issue was the development of the new strategy that was pointed out by Dr Damonse, namely the NRF Vision 2020. The previous board had already gone through this and had been presented with a draft. Prof Nongxa referred to the Annual Performance Plan, which coincided with the term of the new board. The new board needed to reflect on its expectations of the CEO, above and beyond those in the advertisement. Some of these expectations had been implicitly highlighted, such as the things the NRF would possibly need to do differently, going forward.
Prof Nongxa referred to the presentation slide which looked at the funding streams of RISA, and offered his personal take on the matter. He noted that the fourth column was almost negligible compared to the others, and the question would be what the opportunities were to leverage additional resources to support a whole range of plans that had been presented here. Currently there was a significant dependance on government for funding. He said that the new CEO should focus on leveraging resources and, as mentioned by Dr Damonse, internationalisation was a way of achieving this. People believed that foreign direct investment in South African research was a proxy for the quality of work that was being done. He concluded that these were the issues which the new CEO should be explicitly told to focus on.
Dr Gansen Pillay, Deputy CEO: RISA, also commented on the declining baseline budget. He said that it allowed the NRF to reflect on how it should diversify its income streams. A strategy that had been found appropriate was the forward integration of funding from other departments. The NRF was currently being funded by the DTI and THRIP, the DHET, and the DST, but there was also potential for other departments to be able to put their research and development (R & D) funds into a common pot for research so that they could make informed decisions regarding their portfolios. The NRF’s current Chair had done a ministerial review that had proposed the unitary science vote as one of the recommendations a few years ago. It was something that was still being looked at in terms of whether it could happen, and the Portfolio Committee could make a better determination on this possibility than the NRF. The other potential was for the NRF to have a triple helix of academia, industry and government. This included bringing in more funding and getting the industry more involved in trying to support R&D in this country. Another consideration was the NRF alumni, who had been contributing over a number of decades. Their contributions could be put into a trust fund to provide for more scholarships and interventions. All in all, the NRF was aware of its declining baseline budget, but was actively looking into ways to diversify its income stream.
Dr Pillay went on to address the brain drain question. Evidence suggested that South Africa did not actually have a brain drain as much as a brain circulation. The number of people coming into the system was actually slightly higher than the number of people leaving the system. What was important to note was that the country was not losing people in higher education or the national facilities. They still stayed in the system. The NRF saw the PhD project as a drive for independent and critical thinking. These PhDs did not necessarily have to end up in academia. The question regarding contracts with students was answered in the negative by Dr Pillay, although he emphasised the importance of gearing these kinds of scholarships and opportunities towards keeping the students.
He also addressed the question of the knowledge economy. South Africa was currently at .76%, having actually declined. This was where the the Portfolio Committee, as an oversight body, could help the NRF. The Committee had an influence in budget allocationa. The NRF looked towards an aspirational target of 1.5% of GDP being spent on R&D.
Dr Damonse addressed the carry-forward of funds question. The allocation was specifically for the SKA. It was ring-fenced funding, so there were no problems with regard to the carrying forward of funds.
Prof Chetty addressed the question relating to the number of users of the astro-geosciences facilities. He said that the numbers were not being double-counted and that they had been fairly stable, thus not growing in any significant way. This number could possibly be improved by the modernisation of infrastructure, but looking at the number of postgraduate students and the number of research publications, it was clear that the training of students in this environment was certainly increasing.
The Chairperson commented that the Members seemed to agree with the NRF’s strategy, and would encourage them to continue in such a manner. He again noted that the field of science and technology was such that South Africa could not hold itself back, claiming to be a developing country. It needed to keep up with the rest of the world, and this meant competing with the budgets allocated by other countries to their own science and technology fields. He remarked that several of the Committee Members came from a background where science and technology was a neglected field. This should not influence Members to disregard its importance. It was important to be aware of science and technology in the South African context and the unique problems facing the country.
Briefing by Technology Innovation Agency (TIA)
Ms Khungeka Njobe, Chairperson of the Board, started the presentation with the introduction of TIA’s new CEO, Mr Barlow Manilal. Ms Njobe’s other colleagues were also introduced as filling new positions in terms of the TIA’s new structure. Mr Werner van der Merwe was now the confirmed CFO. Dr Sibongile Gumbi had also taken up a new title, namely that of Innovation Enabling Support. The TIA was actively in the process of implementing a new structure, although the top leadership positions had been confirmed with the exception of the corporate executives, which were about to be appointed. Ms Njobe stated that she made these remarks in order to convey that the TIA was well under way to stabilising itself. TIA had come to a consensus on there being one organisational structure which was now well on the way to its implementation. 80% of staff had already been placed in terms of the new structure and retrenchments had been limited. The TIA would thus starts its year on a solid platform. The year brought its own challenges, such as stabilising the TIA in terms of the new structure, showing that the organisation was operationally efficient, and not disappointing customers who interacted with it. The TIA was also beginning to see the fruits of previous investments, although in general it was not happy with the financial outlook. The TIA would hopefully be able to innovate itself and fulfil its mandate.
Mr Manilal, CEO, said that contextually it was important to note that the TIA looked at inputs and guidance from the NDP, and also the TIA directives that governed the DST environment. The TIA had considered this in formulating the types of programmes that it ran. The TIA recognised, as a management team, that it needed to play an elevated role in the management space nationally. Despite some successes, it needed to focus on a broader and deeper role in the innovation space. Although the organisation had come through some changes, it had been structured in a way that would enable it to become more effective. It needed to look at programmes that focused not only at the blue chip leading edge, but also at schools and getting the innovation message out to people. It would be looking at the national development plan (NDP) and technological growth and how it could get larger and more effective innovation systems aligned to the economy. It was also important, in terms of the recent organisational development (OD) process and internal restructure, to focus on the TIA’s desired state in the next five years. The focus must be on developing the company in such a way that it could transcend all the challenges of the previous years and have a trajectory that looked much more at playing a leading role in innovation. The key measure of TIA’s effectiveness would be its commitment to improved standards of living -- how much of its programmes and fundings had changed the lives of South Africans.
Mr Manilal said the TIA had come through a process which may have been traumatic for many of the staff. Therefore they were looking at how the values of the organisation could be re-established, reasserted and also embraced by all staff. The mandate was about impact and the TIA’s purpose, not about innovation for the sake of innovation or funding for the sake of funding. Rather, the TIA needed to make a change in the socioeconomic circumstances of the country. In doing this, it had two distinct value streams. The first was about bridging the gap between new knowledge and technology commercialisation. The second was largely a support one, including the ability to identify and nurture concepts, to look at markets, protecting intellectual property and linking investors with funders. He then discussed the TIA’s overarching goals as well as its three contributions to a more effective and innovative eco-system.
Mr Manilal assured the Committee that the company’s restructuring process was 85% along in terms of the placing of people. In his first week, he had consulted with representatives of the National Education, Health and Allied Workers Union (NEHAWU), representatives of Solidarity, representatives of the internal staff union and general staff. He had been made aware of their concerns and gave Members the assurance that absolutely nothing was insurmountable. All the staff were committed to make the TIA work. They just needed it to consolidate to have one vision, one attitude, one direction and this would come from consistent leadership. Therefore, there were no unusual problems. All matters were consistent with those of a company undergoing reorganisation.
The TIA currently had 22 people who had not been placed and 27 positions that were vacant. There had been a mismatch in the skills base, however, but they were trying to see what could be done. The idea and intention was to ensure that TIA placed as many people as possible in the organisation. In the coming weeks there would be extensive change management processes that would take the TIA to the next level.
In terms of funding, the TIA would fund technologies from proof of concept stage to technology development, and would support the pre-commercialisation stage. At an operational level, it needed the capacity to ensure that it could regulate, monitor and evaluate the systems for all the partners. The risk-funding schemes consisted of the Seed Fund, the Technology Development Fund and the Commercialisation Support Fund. In addition to funding, the TIA would like to give entrepreneurs the type of support needed to enhance and not stifle their creativity, as they were by their very nature risk-takers.
Dr Gumbi, Innovation Enabling Support, said that the core of the TIA was comprised of two major streams. One was the strategic technology areas of the organisation, and the other was the programmes. The strategic technology areas really tried to capture a number of focus technology areas that were responsive to the needs of the economy, and would be looked at in partnership with other National System of Innovation (NSI) stakeholders.
Dr Gumbi then went on to the programmes which were designed to enable and stimulate the culture of innovation. These were:
- Technology Innovation Programmes;
- Technology Station and Platform Programmes;
- Youth Technology Innovation Programme;
- Innovation Skills Development Programme;
- Seed Fund Programme.
She said that the TIA’s strategic overarching goals informed their strategic objectives and initiatives. She discussed these initiatives and then looked at the annual performance plan as well as the strategic initiatives to be addressed during the next financial year. The key indicators were the ways of measuring whether the TIA was achieving what it set out to do in its strategic objectives.
Mr Van der Merwe, CFO, addressed the finances. Income showed the significant reduction of R150 million that had been enforced on the TIA. Hopefully, it could be demonstrated that the TIA would rise to the occasion. For it to absorb this reduction, it had been looking at other income streams, which now comprise 22%, as opposed to previous years where it comprised merely 8% to 10%. This would be achieved by exiting some of TIA’s investments. One significant example was KAPPA, which it had exited successfully at the end of last year, achieving a R60 million return. This success story would be taken to the press soon.
The expenditure slides showed that there had been a focus on reducing the administration costs as a percentage of the total expenditure. It was now stabilising at 29%, and would be reduced in the next couple of years to 28%. This came from a base of 40%. There had been a reduction in staff, from 220 to 142. However other cost savings had also been introduced, for instance in travel and catering, where merely small amounts added up to significant numbers. This was an example of where the TIA was rising to the occasion. The slide on project funding gave a better idea of TIA’s core activities. It represented 71% of funding which the TIA received and was spent on its core functions, namely the projects and investment in innovation projects.
The Chairperson said that the TIA was an institution that promoted innovation. It became a bridge between innovations and the private sector. This made it an important organisation in South Africa in the light of the challenges the country faced.
Mr Koornhof asked how many projects the TIA supported with its project funding. Had it made any calculations to determine how many of those would eventually be successful? It was necessary to know which investments had been bad and which had been good.
Ms Maseko referred to the value proposition and the issue of partnerships. To what extent was the private sector involved? With regard to ICT, she enquired about the relationship with the Department of Telecommunication and Postal Services, and with regard to renewable energy she asked about the relationship with the Department of Energy. Did the TIA look objectively at all innovation, or did it strive to help develop those who seemed to have potential? She asked whether the Youth Technology Innovation Programme was related or aligned with the Human Sciences Research Council (HSRC), because they seemed to have a similar programme. One of the goals was positioning the agency as a thought leader in technology. Once again the issue of telecommunication came in. She also wanted to know how effective the strategic initiative to establish partnerships with the economic development agencies was. Was there a forum that looked at all those issues? Lastly, with regards to funding constraints, she said that the issue of staff was a concern. What would the actual cost of that reduction in funding be, as it would indeed affect the TIA’s programmes?
Mr Mothale said that from the observations, input, comments and issues of shortfalls, the TIA was an institution that had the potential to fund other big government agencies because by its nature and the space it operated in, it was involved in projects that had the potential to generate income. He commented that it was not a good idea to go to press with news of the R60 million return on an investment, because it could do better. The leadership must think in that direction. If there was legislation that put restrictions on the TIA and prevented it from making even more money, then the Committee had to suggest that those statutes be amended. The TIA could be running independently from the Department if it tried hard enough.
The Chairperson observed that people were trying to transform the way things were done in South Africa, and that one thing that was always forgotten was what an asymmetrical country it was. He had always found that in the formal rural areas, most of the women were very innovative in a quiet way, especially the white farmers. It was important to connect those innovations in an objective way.
Ms Njobe addressed the comments around the issue of partnerships. These were a really key part of TIA’s strategy, but she did not think it was effective in implementing that strategy at this point. This had a lot to do with where TIA had been and the fact that the TIA was very inward focused. One of the mandates given to the new CEO was to focus on building relationships with other government departments. The issue of collaboration was between the TIA and the mother department, namely the DST, because one of the things it wanted to focus on was for the DST to invest in new products, processes and innovations. Then the actual government departments could procure other products that were developed elsewhere. When innovators came up with ideas, the TIA must ensure there was a market in our own country. She referred to the innovation conference and how those innovations needed to find a market in this economy. From a broad perspective, the TIA would like to see a lot more strategic content of such engagements and reorienting our government to begin to support the products and services that come from within South Africa.
The other set of partnerships that TIA was actively working on were with other funding entities. This needed to work in a way that supported the people with ideas a lot better. TIA needed to give the Industrial Development Corporation (IDC) confidence to take over projects which had been funded by the TIA and which had been sufficiently de-risked for it to take them up. This set of partnerships needed to work better, as it would benefit the the innovator, the economy and job creation.
Ms Njobe said that the TIA was not so much about the money – its major role was to take out the risk that came with the technology so that the IDC needed to worry only about the commerciability of the project, not whether it worked technically or not. The TIA therewfore typically did not see the big, billion rand returns such as those of the IDC. Regarding the budget cut, the TIA would continue to work with the DST and Treasury to see if it could come out of this position of declining government support.
Mr Manilal said that what was important was not only the potential of the TIA, but also the mode it was in now. It was not in a survival mode due to the budget cuts, but rather a leadership mode. It was a transition the TIA needed to go through and it would be conversing with the DST in this regard. It was, however, important that the TIA functioned optimally. In terms of partnerships, it was important to note not only the schedules of partners, but also the yield of the partnerships.
Dr Gumbi addressed the question about the number of projects that the TIA had in its portfolio. In its formation, it had inherited a large portfolio of projects, especially in the biotechnology space. This portfolio contained 90 projects and over the years, more have been added. The TIA typically funded projects for a period of three to five years. The number of projects it had funded was in the region of about 150, but the number it was currently funding directly was around 50. Those that were no longer being funded were still being monitored. The amount that the TIA had for the projects it was currently funding was in the region of R360 million.
In terms of the TIA’s success rate, two aspects had to be taken into consideration. One was the high technology risk area that in which the TIA operates, and the likelihood of some of those technologies not making it to the market. The second aspect concerned the development time it takes. This may often be a long period of time. The success rate was around 5% of the TIA’s portfolio reaching the market and becoming start-up businesses that were surviving.
The second question was around youth and technology innovation. While the TIA did work with the HSRC in other areas, it did not do so in the Youth Technology Innovation Programme. However, this was something it would certainly explore.
Mr Van der Merwe addressed the question of how successful the projects had been. It was still difficult to say at this stage, as the TIA had transferred money to the development agencies, and most of them had been converted to smaller individual projects. The success of such projects was still too early to determine. Mr Van der Merwe also said that the cuts in funding had been pro-rata across all the different categories of ring-fenced funding.
The Chairperson concluded the discussion by saying that the committee accepted the TIA’s strategies. He also emphasised that innovations must be assessed objectively and that ostracisation of certain people must not occur. A convergence of the public and private sector would be of benefit to the country.
Briefing by South African National Space Agency (SANSA)
Ms Joy-Marie Lawrence, Board Chairperson, said that the new and revised annual performance plan approved by the SANSA board, which was aligned with the DST’s strategic priorities, was the result of strengthening and repositioning the agency to represent and to co-ordinate the interests of the broader space of community and society within South Africa and for the benefit of the country. The performance planned for the year ahead aimed to ensure economic transformation, social progress and human capital development goals.
Dr Sandile Malinga, CEO, took the members through SANSA’s mandate, vision and mission. To achieve these aims SANSA had four programmes that had been approved by the board, focusing on observation, space science. space operations and space engineering.
The purpose of SANSA was to provide services and to support the government and the public sector. It intended to do this by ensuring that it provided services which addressed societal needs, as well as creating knowledge. The Department had made it clear that there was a need to move from being a resource-driven country to a more knowledge-based country. SANSA also wanted to create skills and develop human capacity through the programmes it runs. Another focus was growing the South African industry. It was also important to make South Africa a space global player. SANSA did this with various public sector entities.
Seven goals had been approved by the board, five of which were outward looking, and two which were more inward looking. The intention of these goals was to achieve the 14 outcomes identified by the government, to which the whole country should strive. SANSA believed it could contribute to at least eight of them.
Dr Malinga then went through each of the seven goals as outlined in the presentation:
- address South Africa's challenges through space services and products;
- lead high-impact collaborative R&D on a national scale;
- develop national capacity and ensure transformation;
- enhance the competitiveness of the South African space industry;
- develop active global partnerships;
- ensure growth and sustainability of SANSA;
- transform SANSA into a high performance agency.
Dr Malinga presented the key performance indicators that had been identified, against which SANSA would be measuring itself, and briefly presented the financials in terms of planning for the coming financial year.
Dr Lotriet asked for clarity regarding the building of the satellite. She asked whether it was still outsourced and what the roles of Spaceteq and Denel were in this process. She also asked whether SUNSAT was now completely part of Denel Spaceteq.
Ms Maseko had a question regarding the implementation vehicles, and how SANSA was going to ensure the addressing of societal needs. She commented that the issue of space did not really relate to matters such as water and housing. Out of all of the government departments, SANSA was working only with the Department of Communication, which was now being separated into two, and she wondered whether the one dealing with ICT was not more relevant to SANSA’s operations. She asked how the budget cut for space engineering, from R165 to R97 million, would affect the programmes.
Dr Malinga responded to the question of the uptake, use and benefit of the data that SANSA provides. He saidd that the data was supplied to more than 40 government entities, such as municipalities, and provincial and national government departments. The usage ranges from statistical analysis, to demarcation boards, and to grain yields. All three segments of SA’s defence and security involve intelligence and relied on satellite images. The data was also used for planning the allocation schools. The applications were varied, but SANSA’s intention was simple -- it wanted to integrate the use of space into everyday service delivery. Government should use space for everything that it does. The intelligence gained from space gave a completely different perspective.
He also addressed the relationship with the Space Council, which he said was good. He himself was a member of the Space Council. Therefore there was an interface in terms of the regulatory body on the one hand, and the Agency on the other.
Dr Malinga referred to the question on Sun Space, which was acquired by the state in 2013. What was acquired was the people and a few assets. The people were housed in a unit called Spaceteq, and this unit was being used in terms of the satellite programme to build the satellite. SANSA’s mandate was that of stimulating the industry broadly. At the same time SANSA was cognisant of the fact that all space enterprises required a large injection from the state. It could not be done alone. Therefore SANSA believed that along with Denel, it should be the core and the base on which the broader SMME could be built. However this should be enforced by way of contractual relations, which was what SANSA had tried to do. SANSA had set a local content requirement of 50%, although it would like this to be higher. However if one looked at the satellite sensor that was required, the country lacked the capability to build it. South Africa could design it, but there were only a few countries that were able to build it. Going forward, SANSA would like to reduce the 50% of foreign content. Of the 50% of local content, Denel was entitled to only 60% thereof -- the remaining 40% was for other companies.
Dr Malinga then addressed the question on the addressing of societal needs. When one looked at space there were two aspects. Firstly, one could look at exploring the universe, the type of thing that NASA did so well. The other side of the spectrum used space to help communities, and this was the focus that SANSA was taking at the moment.
Briefing by Council for Scientific and Industrial Research (CSIR)
Dr Sibusiso Sibisi, CEO of the CSIR apologised for their late arrival and informed the Committee of a new member, Mr Laurens Cloete (Group Executive: Operations). Before starting the presentation, he played a video of the CSIR television advertisement that was currently airing. He said that the commercial had aired a few times and it best captured the spirit of what CSIR was about more poignantly than words from the CEO or executives. He welcomed the Committee’s feedback on such campaigns, based on the fact that the Committee had previously suggested that they be more visible and tell South Africans what the organisation did. The television advertisement was part of the mechanisms that they were using to do so. If the Committee’s reaction was positive, they were looking forward to more campaigns.
Dr Sibisi said that the CSIR’s three strategic objectives should be seen as complementary. They were
scientific and technological research in support of national development objectives, financial sustainability and good governance, and to build and transform human capital. He said that without one, the other two could not be achieved.
The CSIR strategic objectives were in context with what was happening in the country. The critical challenges facing South Africa included inequality, poverty and unemployment. These affected society in a number of ways. The importance of CSIR to contribute to the alleviation of these challenges through science and technology could not be over emphasised. He then quoted the Reconstruction and Development Programme, which called for the government to prioritise action against poverty and deprivation.
Dr Sibisi talked about CSIR’s various collaborations with other public research institutions and state-owned enterprises, such as Transnet. It also collaborated with universities, government departments and other sister institutions like National Research Foundation Technology Innovation Agency, amongst others.
The Research and Development strategic objectives’ activities were organised around six impact areas -- health, industry, defence and security, the built environment, the natural environment and energy -- but the CSIR was not restricted to these areas. These were the areas that the CSIR spoke to directly. A variety of core technologies set the CSIR apart from other institutions. It used these core technologies, including robotics, material science, modelling, and computational science, to approach global problems from a different perspective.
Contributions to health sector
Dr Sibisi gave examples of CSIR’s contributions in the heath sector. It was worth mentioning the Business Day lead article from Monday,13 April, that quoted the Health Minister on the work of the CSIR in providing information systems for the rollout of National Health Insurance. He mentioned this to show that the CSIR did not work in isolation, but had ongoing conversations with the Department of Health.
Dr Rachel Chikwamba, Group Executive: Strategic Alliances and Communication, went into depth about the support that the CSIR offers to the Department of Health (DOH). The two entities had signed a memorandum of understanding. The CSIR offers operational support to deliver health care services and attack the burden of diseases. It helps the DOH choose information and communication systems architecture that was able to create health population registers of patients. It had also created a national health information system that had required standards that must be conformed to by provinces in future. Life science research, coupled with engineering capabilities, had developed point-of-care technology in the form of ICT-enabled devices that allowed data collected at a primary level to be sent to service providers and consolidated at a district level. The CSIR was also involved internationally in malaria research. Alongside universities, they were researching how technology could be used to disrupt the cycle of malaria in medicines for malaria.
Dr Chikwamba talked about examples of how technology was used in agro-processing to enhance nutrition and the well-being of children in rural and remote areas. Agro-processing contributed to food security and tried to combat malnutrition by using indigenous and natural plants to create food products that were nutritious. Nutri-veg juice, developed by CSIR, was a protein-enhanced product made by extracting proteins from vegetables cultivated in South Africa. It had been launched at local schools in iDutywa in the Eastern Cape. Nutrigonomics was the study of how Africans responded to food, which allowed researchers to determine how to handle diseases associated with food and malnutrition.
Dr Sibisi added that they maintained open standards in the health sector to avoid locking in to particular proprietary offerings in the arena of technology. He also expanded on the Nutri-veg innovation, saying that it was a pilot project that they would like to see scaled up and made available at schools around the country. It was therefore imperative that they had a good relationship with basic education nationally.
He said industry was an impact area identified by the CSIR, particularly biotechnology. The CSIR was seeking to support Small and Medium Enterprises (SMEs) by giving them access to world-class biomanufacturing facilities.
Dr Molefi Motuku, Group Executive: Research and Development, pointed out that the purpose of a biomanufacturing facility was to support SMEs to do research at a laboratory scale. It dealt with volumes, allowing enterprises to do laboratory research on an industrial scale. To do research on an industrial scale took a sequence of steps. Typically, SMEs did not have the facilities to get to an industrial scale, and that was where the CSIR came in. It also assisted SMEs to further develop their processes and new products. All these services were expensive and needed expertise.
Laser-based engineering was another service that was offered to South African Industry. Traditional welding and gas heating/treatment had limitations. The CSIR facility had the best expertise in laser technology, with high intensity light that provided better control to treat a variety of products. Dr Motuku gave an example of specific processes developed to assist Eskom at the Koeberg plant, enabling them to repair parts without physically removing them. This eliminated the need to send parts abroad for repairs, thereby saving time and money.
Defence and Security
Mr Laurens Cloete, Group Executive: Operations, highlighted the fact that the CSIR had had a long-standing relationship with the defence and security role players in South Africa. He gave an example of a unique piece of technology developed, the Davit system, which allowed the navy to deploy smaller boats from a frigate while the frigate was still moving. This was essential when hunting terrorists or illegal poachers, for instance. The CSIR had also developed a model called the Defence Evaluation and Research Institute, where they formed partnerships with departments and assisted them in making better acquisition decisions. They were already working with the Department of Defence and were now duplicating the system for the SA Police Service and the Department of Health (DOH).
Mr Cloete said that South Africa had developed a National Cyber Security Policy Framework. The CSIR was working with the Department of Science and Technology to develop a road map for investments in information security technology. It was also working with the Department of Telecommunications and Postal Services in setting up cybersecurity hubs to strengthen the country’s ability to protect citizens against cyber security threats. Cyber threats were becoming more prevalent with conventional wars being accompanied by cyberwars, as well as attacks on banking and commercial institutions. The CSIR was playing a role in building tools and skills for this purpose.
Dr Sibisi addressed the CSIR’s work in the built environment. He said it was involved in the rapid testing of pavement of roads by simulating traffic that the road may be subjected to over the years, to test how long a road could last. The CSIR continued to have success in this area, with international demand from countries as far away as California in the USA. In the transport arena, it had started a partnership with Transnet in developing rail infrastructure and building new locomotives. This was an example of a partnership between the CSIR and a state owned enterprise (SOE), where it wanted to take research and development seriously. The SOE partnered with the CSIR to develop new technology without having to rely on international players. The technology and ability existed locally. It was able to make use of young graduate engineers that were doing impressive work in this field. Dr Sibisi said the CSIR would like to see more of such partnerships with other SOEs.
The main focus in the natural environment sector was remediation of mining sites, by identifying crops that could successfully grow on mine dunes.
Dr Chikwamba expanded. She said that when mining operations were finished, huge areas of land were rendered unusable. The CSIR tried to see how to make lands useful to communities, by making them suitable for agriculture. It was researching plants that rehabilitated the land, making it useful for agriculture a few years later.
Dr Sibisi said the CSIR collected data to mitigate and adapt to climate changes. It had an Integrated Climate Model, where the collected data could be used for other purposes such as evaluating the fish stock levels, which then informed the number of fishing licences awarded. Typically, the technology was required to collect data and transmit it to a base camp via satellite. The CSIR had different gliders, including those that dived under the ocean to collect data and transmit it. He said Carte Blanch had given coverage to these gliders. The CSIR was using this data to develop sophisticated models to understand seasonal variations better. It was important, because they could provide a better grasp of drought predictions that affected agricultural planning.
The hydrogen economy was another field in which the CSIR was involved. There was a huge interest in the use of hydrogen energy for cars and portable devices, to reduce greenhouse gases and emissions. The CSIR was currently testing hydrogen storage materials, as it needed high pressure tanks that risked explosion.
Dr Motuku cited storing energy as the major challenge when it came to renewable energy. Storing renewable energy was necessary, as it was generated during the day but used at night. The key lay in certain materials like lithium, which was not present in South Africa. South Africa did, however, have manganese. The CSIR was looking into creating a combination of manganese and lithium to form storage materials. It was also researching platinum and palladium combinations to store fuel cells. The aim was to use value addition, relying partly on local minerals which were in abundance. There was potential to develop a new industry and processing pilot plants to do such work.
Mr Chris Sturdy (CFO) expanded on the CSIR’s work on lithium-ion batteries, its international cutting edge work in the field and their commercial returns on patents. He explained that over 20 years ago patents had been filed for the Intellectual Property (IP) developed regarding cathodes in lithium-iod batteries. They had received payments on licence fees. With the advent of electric vehicles, the batteries used in the vehicles was possibly using their technology and infringing on their patents. The CSIR was monitoring these developments and would not be taking legal action yet. This was because it cost US $100m to fight this kind of law suit, the projected number of electric vehicles in the market were not being realised due to the lower oil prices, and he predicted that they would not get a return if they took on the infringing companies. Together with its partner in Canada, Hydro-Quebec, with whom it had pooled this IP, it was determining if its IP was being used in these car batteries. Furthermore, the patent licence expired in a years’ time but one could go back for up to six years in the USA for licence fees due.
Mr Sturdy said there had been a significant investment in batteries for home use. He believed that in the next few years, the convention of having a large utility supplying power would be turned on its head and self-generation power models would be developed. He called them “mini power producers” -- for example, using the roof of a house. A CSIR Integrated Energy Research Centre had been initiated. It wanted to be the model in the country, by having an autonomous campus using the 50 buildings on site to run a combination of wind, solar, and biogas to run the campus.
Mr Sturdy briefed the Committee on the financial stability of the CSIR. The organisation remained a going concern, and was aiming for a 9.8% top line growth. It was experiencing healthy, modest margins. The CSIR remained liquid and solvent, and was investing heavily in equipment and infrastructure. It prided itself in the fact that it had never had a qualified audit and it was a track record that it was looking to maintain. It complied with international quality standards in its various laboratories. It was looking to maintain its B-BBEE level 2 status and its good safety track record.
Dr Sibisi addressed the Committee on the strategic objectives of building and transforming human capital. He emphasised that everything the CSIR did was reliant on human capital. Its objective was to increase the salaries of science, engineering and technology (SET) staff and transform the demographics in terms of age, gender and race. He commented that the key performance indicator targets were reasonably ambitious. He felt that if they were to continue doing the work in the research performance areas mentioned, it was necessary to push for people with doctorates in the organisation. This was also a core strategy of the Department of Science and Technology.
The CSIR boasted a good governance and sustainability report. Dr Sibisi pointed out that it was imperative to continue to invest in property, plant and equipment or it would be left behind because of the nature of work it did.
He concluded by saying that the CSIR had delivered on the expectations and trends presented and he saw no reason why this would not continue to be the case.
The Chairperson said that he got the sense of an honest picture presented by the team. He said both crooks and community workers were brilliant, but the difference between a crook and a community worker was that the crook thought against the community. The CSIR’s innovations were helping communities. It was good to see such developments coming from South Africa, and this showed lateral thinking. He was happy that the organisation was doing something for South Africa by South Africans. Innovation was being based on difficulties that were being identified in the local community. Innovations developed somewhere else might not fit South African problems. Mimicking often failed because developers had their own specific difficulties in mind.
The Chairperson invited discussion, but there were no questions. The general consensus of the Committee was that they were thrilled with the work of the CSIR, especially its teamwork, and they were looking forward to visiting them on site. The Chairperson encouraged the CSIR to continue with its good work.
The meeting was adjourned.
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