Department of Science & Technology, NACI, CSIR, SANSA, NRF & TIA on their 2016 Annual Performance Plan

Science and Technology

13 April 2016
Chairperson: Mr B Goqwana (ANC)
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Meeting Summary

The Department of Science and Technology (DST), National Advisory Council on Innovation (NACI), Council for Scientific and Industrial Research  (CSIR), South African National Space Agency (SANSA), National Research Foundation (NRF) and Technology Innovation Agency (TIA) presented their Annual Performance Plans to the Committee.

DST mentioned its plans to improve the research and development tax incentive in an attempt to encourage the private sector to increase investment on research and development. It had been able to achieve 63% of its targets in the 3rd quarter, although it had been hindered in achievement by process and administration delays, often due to others who fed into the work of the Department. The DST was, like many other institutions in the science field, still faced with challenges of transformation at the post-graduate level, and there are still very few black and women getting PhDs. The Department was very happy to be awarded a stabilised budget, given the national budget cuts. Members asked questions about plans to address transformation and to promote local innovation. Members also asked about the use of consultants, selection criteria for the Next Generation programme, and how to alter the fact that South Africa is a net importer of technology, as well as the impact of the exchange rate, and whether any aspect of the budget would need to be sacrificed.

The National Advisory Council on Innovation (NACI) highlighted that it has been able to address transformation issues but there is still more work to be done in terms of gender equality. There are other issues that the Department still needs to address challenges like the uptake of locally developed technologies by government, the expansion and transformation of human resources for STI and the provision and maintenance of state-of-the-art STI infrastructure. Members asked about the relationship with other institutions and the impact of its advice.

The Council for Scientific and Industrial Research said that the entity is steadily growing in size and that the Council is happy that it will remain financially stable. However, the current economic downturn will have effects of reducing income, licence and royalty income in particular. The innovations were described, and the CSIR would partner with other departments in launching and marketing these products. CSIR was also faced with challenges of transformation and gender equity because there still very few black and women professionals. Members then asked questions about transformation and plans to market the new products. They asked if CSIR would ensure that competitors or other industries would respond well, whether it had business with other African and overseas partners, and the source of its funding, and also enquired about the impact of market-ready products on the Technology Innovation Agency. The relationship between the two was explained, as also its work with other departments who would be invited to launches of new products.

The South African National Space Agency (SANSA) noted that the Agency had had only 0.5% increase in its budget and this has resulted in it having to reduce some of its targets so that it can focus more of its funds on fulfilling its mandate. Transformation is still a big issue because there is a shortage of personnel especially from previously disadvantaged groups. SANSA is planning to address this issue by making use of its bursary and internship programmes to attract and select students. Gender inequality in space studies is a problem experienced by all countries, but SANSA was very happy that there are promising signs from the Agency’s programmes in addressing these issues. Members asked why salaries were increasing above inflation although growth in contract income was not keeping pace, and SANSA explained the difficulty with the long life span of satellites and projects. They asked about the risks and how the funding was balanced. They also queried how far the plans were for sending more scientists into space.

The National Research Foundation highlighted its partnership with universities to help students from previously disadvantaged backgrounds to study further and obtain PhDs. In addition, it has introduced a project where learners can engage and be taught science in different African languages. The entity is also making use of its next generation researchers programme to address transformation and gender inequality. Members commended the teaching initiatives, asked how NRF could track students and its selection criteria, as well as whether it funded students from other African countries also.

Technology Innovation Agency (TIA) has been providing technical support to small and medium entities to help them because more competitive. A majority of these businesses are owned by previously disadvantaged individuals and the Agency is looking at increasing that number in order to tackle the issue of transformation. It was looking specifically at its seed fund, and placing more emphasis on better data collection and tracking of projects. Currently 2 200 small and medium enterprises were receiving technology assistance, of whom 63% of the assisted small and medium entities are owned by previously disadvantaged individuals. Members asked why the number of innovations was growing but the number of businesses supported was projected to stay the same, and asked what type of support was offered.

Meeting report

Chairperson’s Opening Remarks
The Chairperson commented that mathematics produce literal thinkers, technology is the innovation that is done by human beings. The Department of Science and Technology (DST or the Department) talks about human capital development to improve the economy and is particularly important. Government must broaden maths and technology to involve everyone, and to change the perceptions and fears about it. Research and Development (R&D) is currently seen as a responsibility of government only. The private sector seems to not be getting involved, probably because it has discovered that costs outweighs the benefits. However, R&D should be the responsibility of both government and the private sector because at the end of the day the whole economy benefits.

Department of Science and Technology 3rd quarter performance, 2016 Annual Performance Plan briefing
Dr Phil Mjwara, Director General, Department of Science and Technology noted that one of the most important developments was that the Department was looking into improving the R&D tax incentive which is aimed at encouraging businesses to invest in science and technology research and development. In addition, as part of the Mining Phakisa, the Department is also planning to allocate around R7 million to R9 million to support R&D in mining.

The Department is still faced with a challenge of transformation at a post-graduate level and has been conducting research to understand what the Department can do. The Department has also been able to improve its infrastructure through the acquisition of a new high performance computer system. In the third quarter, the Department had managed to achieve 63% of its targets and the Department’s internship programme has been the most successful. The reason for not achieving the other targets was due to process delays, administration delays and lastly ineffectiveness of the implementers with whom the Department worked; administration and process comprised about 70% of more than a third of the DST targets. He concluded by saying the Department is very happy to have a stabilised budget given the national fiscal austerity measures announced by the Minister of Finance.

The Chairperson asked how much innovation was being imported and exported, especially under the current economic downturn. He also enquired what impact the Department of Science and Technology was having on the economy in terms addressing the inequalities in our society.

Dr Phil Mjwara replied that the Department is definitely making an impact, and whilst at the moment there is no model to quantify the impact of the Department’s work on society, the Department is looking to develop such a model. South Africa is still a net importer of innovation.

Mr M Kekana (ANC) requested clarity on the usage of consultants.

Dr Phil Mjwara replied that the Department is currently making use of just below 20 consultants.

Mr N Koornhof (ANC) asked the selection criteria for the next generation programme.

Dr Phil Mjwara replied that the programme is in support of the Department of Higher Education and Training, and is targeting black individuals and young women. The role of the DST is to provide funding, and the selection criteria will also be decided by the Department.

Dr A Lotriet (DA) said she wanted to know how to change the fact that South Africa was a net importer of technology. She asked the effect of the exchange rate on the work of the Department.

Dr Mjwara replied that there is a 15-year strategy plan on improving import-export of technology but it will take time to get to a point where South Africa is a net exporter of technology. The Department had been asked by the Cabinet to develop a framework where local and cheaper technology with the same performance will be used which should promote local innovation.

Ms L Maseko (ANC) commented that people who come up with new innovations need to be recognised. She then asked what aspect of the budget the Department would want to sacrifice in order to keep the budget intact. Secondly she asked why the public participation programme was set to take place in December, when students were on holiday.

Mr Tommy Makhode, Chief Director: Communication, DST,  replied that the programme was actually planned to take in place in October.

Ms J Terblanche (DA) expressed her disappointment on the delays that resulted in targets not being met, saying it was unacceptable for serious targets not to be achieved simply because the Department could not get a signature.

Dr Mjwara responded that the Department understands the concerns and will make sure that it learns from these mistakes.

National Advisory Council on Innovation (NACI) Annual Performance Plan and budget briefing
Dr Mlungisi Cele, Chief Executive Officer, NACI, firstly wanted to comment on transformation and said that in 2013, South African universities awarded more doctoral degrees to Africans than to white students (461 Africans compared to 452 whites). This represents a significant transition point and a key milestone in reducing inequality. However, there is still more transformation that needs to be addressed in terms of gender.

Since the adoption of the White Paper on Science and Technology, the National Science and Innovation (NSI) initiative has made progress in a number of areas. However, there are challenges still need to be addressed. These challenges include the uptake of locally developed technologies by government, the expansion and transformation of human resources for Science, Technology and Innovation (STI) and the provision and maintenance of state-of-the-art STI infrastructure.

Dr Mlungisi Cele said that the NACI does not get funds directly from the National Treasury but from DST, who decide how much to allocate to NACI. The total estimated budget for 2016/2017 is R18.967 million, comprising compensation of employees (R10 432 000) and goods and services (R8 535 000).

Mr C Mothale (ANC) asked about the relationship between the institutions, and what is the impact of NACI’s advice.

Mr Dhesigen Naidoo, Council Member, NACI, replied that the Minister is very specific on what she wants from NACI. Secondly NACI is made up of independent members from different councils, and NACI's advice to the DST had a definite impact, and that would be seen in how the advice was filtered into the policies.

Council for Scientific and Industrial Research (CSIR) 2016 Annual Performance Plan and budget briefing
Dr Sibusiso Sibisi, Chief Executive Officer, CSIR, began his presentation by saying that the financial budget indicates that the CSIR will remain financially sustainable but the current economic downturn will have effects of reducing royalty and licence income. The size of CSIR is steadily going up and the Council has undertaken new innovations and interventions through coming up with new market ready products, including Phepisa skin care products.

The Council has made research and development contributions to the National Development Plan, with the economy and employment being the focus areas.

Dr Sibusiso said CSIR is geared up to support the national effort to promote industrialisation and it is doing so by offering technical assistance to small and medium enterprises of which the majority are black owned businesses.

Amongst other achievements, CSIR has come up with a water monitoring system and recommendations that will assist the city of Umhlathuze to secure future water supply.

Dr Sibusiso Sibisi highlighted that the one challenge that CSIR is faced with, and is in the process of addressing, is the issue of transformation, as there are still very few black professionals and women.

The Chairperson asked how the CSIR and the science community at large would make sure that competitors or industries responded well to the introduction of the new products. He also asked if CSIR would consider marketing its products to other markets.

Mr Laurens Cloete, Executive Director, CSIR,  replied that the entity cannot hold back on innovation simply because there may not be a good response, or because someone else might do it. He said that innovation is a continuous process that will keep all parties on their toes.

Mr Koornhof asked whether CSIR has other businesses, from African countries or other continents

Mr Chris Sturdy, Chief Financial Officer, CSIR, replied that 73% of finance income comes from contracts and 12% of that is from international and African businesses. He added that 12% is small and is mostly from the oil producing countries that are currently going through tough economic times, so that was likely to be a further challenge. The CSIR will need to look into diversifying.

Ms Lotriet asked whether the innovation of market ready products does not interfere with the work of Technology Innovation Agency.

Dr Molefi Motuku, Group Executive: R&D, CSIR, replied that CSIR does the actual work of coming up with products and Technology Innovation Agency is responsible for finding funds. CSIR tests the claims of the product and assists with making different ranges of products, and sometimes the two entities do partner together.

Ms L Maseko (ANC) wanted to know whether CSIR invited the Department of Trade and Industry and the Department of Small Business Development to the launch of their products. She requested an insight on the marketability of these products, based on their experience. She asked if there is any collaboration with the Department of Telecommunications.

Dr Motuku replied that the two departments would indeed be invited to the launches as it was recognised that the products had to get into the market.

South African National Space Agency (SANSA) 2016  Annual Performance Plan and budget briefing
Dr Sandile Malinga, Chief Executive Officer, SANSA said given the financial constraints and the 0.5% increase in its grant, the SANSA had had to scale down some of the 2016/17 targets. The Space Operations Programme activities generate large foreign revenue. The value of the programme activities is related to its self-funding ability. Therefore, the level of income generated is important.

The targeted revenue to be generated for 2016/17 was R58 million, an increase of R3 million from the 2014/15 baseline of R55 million. The satellite build programme has an allocation of R230 million over the medium term. About 96% of the programme costs are towards the satellite build programme. Funding for the continuation of the programme is still under discussion with the Department of Science and Technology.

Dr Malinga also highlighted that South Africa has a shortage of skilled personnel in the space engineering arena, particularly from amongst previously disadvantaged individuals. In addition, gender equity is another area of concern that the Agency is trying to address. Through the bursary programme and internship programme, SANSA aims to address these transformation issues by strategically using the satellite build programme to select candidates from previously disadvantaged backgrounds, and women.

Mr N Koornhof (ANC) asked why SANSA does not foresee growth in contract income above inflation but salaries are increasing above the inflation, and enquired if this was linked to employment of more staff?

Dr Malinga responded that contract income depends on a lot of things and due to the life span of satellites being very long it is difficult to foresee growth, especially now that the economy is weak. The launch support revenue is also excluded from estimates, as it is difficult to estimate the probability of the launches happening, as well as the success of the launches

Dr Lotriet asked how much risk is involved in the satellite building process.

Dr Sandile Malinga replied that around two thirds of the funding goes to revitalising capabilities and that this was where there was risk.

Ms Maseko asked what strategies SANSA had to address the imbalances regarding the staff and student intake, and she also asked what was happening into scientists going into space.

Dr Malinga said that imbalances in equity employment in the science fields was a worldwide problem especially in term of gender inequality. This is an issue that will need funding, but there are promising signs from the programmes. The real challenge lies with the fact that there are still only relatively few  people who tend to choose to study the physical sciences, especially amongst women. In relation to the space venture, there had been a request for funding and scholarship and that had not yet been attended to.

National Research Foundation (NRF) 2016 Annual Performance Plan and budget briefing
Dr Molapo Qhobela, Chief Executive Officer, National Research Foundation, reiterated this organisation's continued commitment towards a representative science and technology workforce, and said that this was evident in the almost 200% increase in its support of black and female researchers entering the system over the past ten years. The NRF had increased its investment to the next-generation researchers programme, and the support for next-generation researchers from designated groups had been steadily increasing.

Dr Qhobela also mentioned that NRF had partnered with some of the universities who had a majority of black students, like University of Western Cape and Wits, in order to help students, especially those from previously disadvantaged backgrounds to pursue post graduate studies. He noted that the NRF had supported 75% black and 57% female students at honours level. At Master’s level, the NRF supported 59% black and 52% female students, while at Doctoral level the data reflected 57% and 51% black and female students respectively. The NRF had introduced a pilot project where science was being taught and explained in different African languages, in order to increase knowledge and spark interests in learners.

The National Treasury allocations had experienced slow growth, and the increase for 2016/17 is 0.5% only. In comparative terms, this represented only a portion of the income, with contracts accounting for another 25% of income and 4% of income being generated through sales, services and interest.

Dr Lotriet thanked the NRF for the excellent report and commended NRF on the introduction of science teaching in different African languages. She then asked whether, since most of the budget is spent on post-graduates, there was any way to track these students to ensure that they would get involved and stay in the country. She asked about the selection criteria for students at post graduate level.

Dr Qhobela replied that there is a mechanism of tracking, but it is still new. The NRF is also in collaboration with the Department of Higher Education and Training, which has a system in place that shows details of the students.

Mr Koornhof asked whether the NRF funds students from other African countries.

Dr Molapo Qhobela replied that the NRF bursary funds both South African students and other students from Africa.

Mr Mothale congratulated the CEO on his appointment and then asked why Afrikaans is not on the list of the African languages, when it is spoken by the majority of South Africans.

Technology Innovation Agency (TIA) 2016 Annual Performance Plan and budget briefing
Mr Barlow Manilal, Chief Executive Officer, TIA, said that TIA made appropriate adjustments to the budget to accommodate the reduction in its grant allocation due to fiscal austerity measures. In addition, significant emphasis was placed on attracting other sources of funding to continue with planned projects and programmes. In addressing issues of transformation, TIA planned to target a selection of internship candidates, which would include black persons and women. TIA had a strategic goal to use knowledge for economic development, and through this it has been able to improve the performance of small and medium entities, through technology interventions.

TIA is looking at improving the Seed Fund programme this year and greater emphasis would be placed on improved data collection in regard to the performance and progression of projects, so that they can be tracked more effectively.

Mr Barlow also highlighted that there are currently 2 200 small and medium enterprises receiving technology assistance, which should enable the businesses to be more competitive. 63% of the assisted small and medium entities are owned by previously disadvantaged individuals, and this percentage is expected to increase to 67% in 2018/2019.

Ms Terblanche said the number of innovations is growing while the number of small and medium enterprises receiving technical support is the same. She wondered why, given the projected increase in budget and the kind of experience TIA had, it was not forecasting any increase in the number of entities supported.

Ms Maseko asked what kind of support was being offered to the entities.

Mr Manilal said TIA had picked its strategic projects based on its income, capacity and resources, and said that the TIA had other programmes and other key performance indicators that it wanted to optimise on. It did not want to over-promise or under-deliver, but it would certainly be looking to those considerations also.

The meeting was adjourned.

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