Department of Science and Technology on its 2nd Quarter 2015/16 performance

Science and Technology

02 March 2016
Chairperson: Dr M Goqwana (ANC)
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Meeting Summary

The Department of Science and Technology (DST) briefed the Portfolio Committee on Science and Technology on its financial and non-financial performance during the second quarter, which was the period from July 1 to September 30, 2015. The report outlined the targets that the Department had set out, revealing which had been successful and which had not been achieved, including the reasons for the failure to meet targets. The DST had experienced a success rate of 77%, including two out of five programmes where 100% of the targets had been achieved.

The Department had had an influence on a variety of organisations across various sectors, including health and agriculture. It had also played a significant role in addressing the challenges of unemployment and inequality, as well as in enhancing knowledge production.

A matter of concern raised by Members included the lack of sufficient means of transport at innovative manufacturing sites, and that protection of innovations needed to be secured in the competitive business industry.

The Chairperson emphasised to the DST that the Members were an oversight committee that did not rely only on what was disclosed during presentations, as they went the extra mile of physically visiting some sites. He expressed his satisfaction that Members’ observations correlated to a large extent with what the DST had reported. He advised, however, that those matters that required attention be attended to. He further reiterated a point raised by the President at the State of the Nation Address (SONA) concerning integrating the public and private sectors in an attempt to mend the troubled growth of the country’s economy. As the Department of Science and Technology, its duty was to remove the risk involved in business situations, given that private businesses tended to avoid the risk factor. It should thus be the DST’s concern to engage in activities of such a nature that risks were removed in order to attract partnerships with private parties. Moreover, some of the setbacks raised in the presentation were the same as those that had been brought forward in previous years and considering that science and technology were dynamic and revolutionary, different strategies should be adopted and new innovations should be employed to prevent the previous setbacks from recurring.

Meeting report

Department of Science and Technology on its 2015/16 2nd Quarter performance

Dr Phil Mjwara, Director General, Department of Science and Technology (DST) briefed the Committee on the Department’s key goals for the second quarter of 2015, the strategies that were adopted in order to attain these goals, the outcomes of the strategies and the overall evaluation of the Department’s performance over the period.

The key goals of the Department involved continuous efforts aimed at:

  • Building a responsive, coordinated and efficient National System of Innovation (NSI);
  • Increasing the knowledge generation;
  • Developing human capital;
  • Ensuring that the knowledge gained is used for economic development;
  • Utilising the knowledge gained for inclusive development;

The Department contributed to and reported on the following government outcomes: Outcome 2 -  long and healthy life for all South Africans; Outcome 4 - decent employment through inclusive economic growth; Outcome 5 - a skilled and capable workforce to support an inclusive growth path; Outcome 6 - an efficient, competitive and responsive economic infrastructure network; Outcome 7 - vibrant , equitable and sustainable rural communities and food security for all; and Outcome 10 - environmental assets and natural resources that are well protected and continually enhanced.

In terms of the five programmes that the DST is separated into, the purpose of the Administration’s programme 1 is to conduct the overall management and administration of the Department. Programme 2 - Technology Innovation, aims to enable research and development in strategic and emerging focus areas, to promote the realisation of commercial products, processes and services from research and development outputs. The purpose of Programme 3 - International Cooperation and Resources, is to strategically develop, promote and manage international relationships, opportunities, and science and technology (S&T) agreements that strengthen the NSI and enable the exchange of knowledge, capacity and resources between South Africa and other countries. Programmes 4 and 5 -- the research development and support programme and the Socio-Economic Innovation Partnership programme -- are aimed at providing an enabling environment for research and knowledge production that promotes strategic development of basic and priority science areas through science promotion, human capital development and the provision of research infrastructure, and at enhancing the growth and development priorities of government through targeted S&T-based innovation interventions and the development of strategic partnerships with other government departments and research institutions, respectively.

DST’s contribution to strategic outcome-oriented goals

Dr Mjwara explained that a responsive, coordinated and efficient NSI was in place to ensure that strategic outcome goals were achieved. The DST, with the assistance of their colleagues at the National Treasury, were developing an approach to increase the country’s gross expenditure on research and development (R&D) with the aim of implementing a gross domestic product (GDP) increase from the current 0.7% to 1.5%. Moreover, concerning the Research Development and Innovation (RDI) public budget, an international benchmark study on legislation was in place to effect RDI budget coordination.

In addition, 14 Centres of Excellence (COE’s) had been established that continuously worked to train students, generate knowledge and respond to challenges. One of the highlights last year was the attempt to increase the number of research chairs in the system and this had been achieved when the Minister of Science and Technology had awarded 42 research chairs to women only, and in so doing, the Department had contributed to the government’s transformation agenda.

Under knowledge generation, he addressed human capital development, saying that the DST was involved in providing financial support for 10 692 students studying various degrees at Honours, Masters, Doctoral and Postdoctoral level. In addition to that, 3 404 researchers had been awarded research grants through the National Research Foundation (NRF) and 260 interns had been placed in Science, Technology and Innovation (STI) work opportunities. He described the programmes as very useful to the youth of the country as statistics showed that a large proportion of the youth involved in such programmes succeeded in obtaining jobs immediately after securing internships.

Publication goals for the financial year were bordering on success, as five publications and ten manuscripts had been submitted during the reporting period. In terms of infrastructure, he was pleased to announce that R686.3 million had been provided by the DST to the Centre for High Performance Computing (CHPC), which was excelling in training young South Africans, to advance their efforts at creating computing capabilities with the rest of the continent.

The Department had continued to roll out programmes with the South African National Research Network (SANReN) and had started to build the Data Intensive Research Initiative of South Africa (DIRISA) as well as to ensure that the West African Cable System (WACS) was properly funded for international broadband connectivity.

The Department had set up a number of initiatives aimed at demonstrating the use of knowledge and innovation for economic development. Ten indigenous knowledge-based community development projects had been assessed and a feasibility study had been completed in Mamelodi to determine the establishment of an extraction plant. A tuberculosis (TB) diagnostic, as well as an HIV immune modular were approved for commercialization in the health innovation space. Additionally, a state-owned pharmaceutical company called Ketlaphela was created, and the first attempt to locally manufacture Tenofovir, an essential anti-retroviral for the treatment of HIV/AIDS, had commenced.

In the agricultural sector, engagements with different government departments and the Department of Rural Development and Land Reform (DRDLR) have been underway to employ crop improvement systems for drought resistant crops, particularly, wheat and soybean, in order to ensure food security.

In attempts to create “enviropreneurs,” the Department had partnered with and funded an initiative between Green Matter and the South African Young Water Professionals (YWP-ZA) network, to support the business development of young water professionals, and increase the pool of enviropreneurs.

In terms of targeted decision support, a General Budget Support (GBS) information communication technology (ICT) innovation programme with the European Union (EU) is currently under way. Five projects were reported to be implemented through the Council for Scientific and Industrial Support (CSIR). Furthermore, work done with the Department of Health at the national level was focused on, providing mobile health services for foetal, maternal and child healthcare.

Performance Overview

The number of output targets that had been set for the second quarter was 52. However, only 40 (77%) of those were achieved, while 12 (23%) failed to be achieved. In Programmes 1 and 2, 100% of the targets were achieved, in Programmes 3 and 4, 70% of targets were achieved, and in Programme 5, they had managed to achieve 57% of targets.

Targets which were not achieved

Dr Mjwara attributed the following reasons for the variances arising from non- and under-achievement:

  • Target formulation deficiencies, which involved unforeseen variables during the target formulation phase;
  • Process delays, particularly owing to factors outside the control of the DST, where the achievement of the targets depended on an outside stakeholder;
  • Administrative delays, which were due to internal processes of the DST;
  • Ineffectiveness of implementers, whereby deficiencies during the implementation phase resulted in non achievement.

17% of failures were as a result of target formulation deficiencies, 42% as a result of process delays, 33% were due to administrative delays, and the ineffectiveness of implementers comprised 1%.

Financial Performance

Programme 1 was allocated 40% of the funds: R301 158. Programme 2 was allocated 13.3% of funds: R1 008 422. Programme 3 received the least share: R121 577 (1.6%). Programme 4 received the largest proportion of 56.8%: R4 246 807. Programme 5 received 27.1%: R1 804 156. By economic classification, transfer payments constituted the bulk of the funds, at 93.3%, and the remaining 6.7% was used to run the Department. Having had an initial budget of R7 432 120, the DST had planned to use R5 756 883 (76.9%) but instead had used R4 850 278 (64.8%) – a variance of R906 605.

Dr Mjwara concluded that the Department would continue to ensure that they achieved their broader targets of ensuring that the NSI remained an enabling framework for science, technology and innovation initiatives. He further added that the presentation highlighted the fact that the DST had made a pivotal contribution to addressing challenges of inequality, unemployment and poverty in the country as well has enhancing knowledge production, growth and transformation of the pool of knowledge workers.

Discussion

The Chairperson advised that Members should address the DST on their views relating to the achievements and failures that had been presented, while bearing in mind the DST’s claim that their use of finances would improve in the third quarter.

Mr C Mathale (ANC) appreciated the presentation and the work being done by the Department. The achievements discussed were impressive and both the level of comprehensiveness with which the report was presented and the department’s efforts were encouraging, given that even with the challenges addressed, the explanations were sufficient and there were no concerns to be raised or elaboration required. On a separate matter still relating to the DST, he mentioned that while on a field visit to Giyani with entrepreneurs from the CSIR, who were receiving assistance from the DST, he had visited an oil extraction site and a candle manufacturing plant, where he learned that the people involved were very appreciative of their systems. However, a lack of transport was a common setback at both sites. He was pleased with all the products and urged the DST to take that problem into consideration going forward in further projects with the CSIR, as it would improve efficiency where commuting and transporting products was concerned.

The Chairperson emphasised to the DST that the Members were an oversight committee that did not rely only on what was disclosed during presentations, as they went the extra mile of physically visiting some sites. He expressed his satisfaction that Members’ observations correlated to a large extent with what the DST had reported. He advised, however, that those matters that required attention be attended to. He further reiterated a point raised by the President at the State of the Nation Address (SONA) concerning integrating the public and private sectors in an attempt to mend the troubled growth of the country’s economy. As the Department of Science and Technology, its duty was to remove the risk involved in business situations, given that private businesses tended to avoid the risk factor. It should thus be the DST’s concern to engage in activities of such a nature that risks were removed in order to attract partnerships with private parties. Moreover, some of the setbacks raised in the presentation were the same as those that had been brought forward in previous years and considering that science and technology were dynamic and revolutionary, different strategies should be adopted and new innovations should be employed to prevent the previous setbacks from recurring.

Dr A Lotriet (DA) referred back to the SONA, addressing a statement made by the President on the finalisation of the Sovereign Innovation Fund. She asked about its relation to the Chairperson’s point regarding the integration of the public and private sector, and asked how much progress there had been.

Dr Mjwara said the Fund was an idea that had been supported when the Department raised the issue of how South Africa had lost innovations. Even though South African researchers tended to produce cutting edge research, the researchers ended up going overseas as a result of lack of support. The concern was thus to produce a fund dedicated to supporting researchers of this nature. Government entities then contribute to this fund, and they had the capacity to raise up to R1 billion. The intention was thus to engage with banks and other venture capital associations to create this fund pool which would be available for use when innovations arose, to minimise the flight of local technologies and ideas so that South African researchers could commercialise their ideas locally. 

The Chairperson suggested that the DST initiate partnerships with their competitors to jointly produce new innovations, as an attempt to prevent competitors from sabotaging the DST’s innovations. These attempts would be aimed at curbing the interruptions to new innovations in the highly competitive business world, generating greater investments and in turn, improving the state of the economy.

Dr Mjwara explained that his colleague, Mr Tommy Makhode, Deputy Director General, DST, would respond to Mr Mathale’s proposal on the transport matter for the projects in Giyani. He added that they would continue to provide the entities with feedback on the usefulness of the visits to reiterate the concerns presented.

In addressing the matter of partnering with other businesses, he said this was an issue that had been considered carefully by the Department, and that the sector innovation funds that were dedicated to sectors and working with industries were still in the pilot stage. However, there were high hopes of seeing the potential and value of the partnership in terms of how it would affect the state of the economy. In the two years that the sector innovation fund had existed, the Department had started to design a framework of information that would analyse how public-private partnerships, and the focus of research by public entities to support industry, were being threatened. This information would be valuable to industry, as it would enhance their performance in terms of the number of people that they employed, and their general performance. By the next financial year, the Department may be able to report back to the Committee on the progress of the processes.

He acknowledged the Chairperson’s comment on science and technology being dynamic as true, as well as that of preventing innovations from being sabotaged. He suggested the patenting system to protect ideas and alternatively, introducing a new idea to the market and flooding the market so that competitors were unable to break in and interrupt the process. He noted, however, that the strategy to adopt was project specific.

The Chairperson accepted Dr Mjwara’s response and further commented that the profit motive of businesses was always bound to result in tough competition.

Mr Makhode, in response to the transport matter, indicated that there were tractors, wheelers and other equipment at the site that had all been provided by the DST. Following the Minister of Science and Technology’s visit to the site in September (2015), there were preparations in place to expand the project and in so doing, increase the land size from 45 hectares to 100 hectares, and the request to increase transportation would thus ensue from the expansion.  Moreover, a number of strikes had been made with regard to that project. The DST was currently working with the South African Essential Oil Business Incubator (SEOBI), which was an entity of the Department of Trade and Industry (DTI), and the intention was to commercialise. The role of the DST in this was to execute R&D and to introduce other partners once the need for commercialisation had been established. Partners would include the Mopane District Municipality, to ensure that it was integrated into its IDP so that there was integration with the project.

Dr Mjwara built on his previous response by adding that the DST was seeking avenues towards inclusive innovation and their task at hand was converting prototypes and pilots into full business opportunities. There was no solid plan currently in place to facilitate the actions, but models would be constructed to consider managing the possible risks. Possible solutions included partnering with other businesses as well as incubating certain businesses into a new set of businesses in order to ensure that innovations were not sabotaged.

The Chairperson concluded that Members agreed with the presentation and comments made by the Department.

The meeting was adjourned.

 

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